VZCZCXRO5250
RR RUEHRG
DE RUEHBR #2606/01 3481841
ZNR UUUUU ZZH
R 141841Z DEC 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 7650
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 3554
RUEHRG/AMCONSUL RECIFE 6019
RUEHSO/AMCONSUL SAO PAULO 8864
RUEHBU/AMEMBASSY BUENOS AIRES 4478
RUEHAC/AMEMBASSY ASUNCION 5845
RUEHMN/AMEMBASSY MONTEVIDEO 6653
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 002606 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR:SCRONIN/MSULLIVAN 
USDOC FOR 3134/USFCS/OIO/WH/SHUPKA 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
STATE FOR EB/TPP/BTA and WHA 
 
E.O. 12958:  N/A 
TAGS: ETRD ECON BR
SUBJECT: BRAZIL - REGULATORY AGENCY FORGING AHEAD WITH NEW 
REQUIREMENTS FOR MEDICAL DEVICE REGISTRATION 
 
REF: BRASILIA 2589 
 
¶1.  (SBU) Summary:  Emboffs met December 12 with representatives of 
Brazil's National Sanitary Vigilance Agency (ANVISA, an FDA-like 
agency) to clarify the scope of new requirements for commercial and 
pricing information for approval of medical device sales and urge 
that the GoB take into account industry concerns over the 
implementation of the measure (reftel).  Economic and Regulatory 
Issues Department Director Pedro Bernardo and International 
Relations Director Rogerio Ferreira argued that the new regulation 
was merely the application to medical devices of the requirements 
for provision of commercial information as part of the ANVISA 
licensing process that were introduced in 2003 by law 10742; these 
requirements already applied to pharmaceuticals.  Bernardo stated 
that both the new regulations and law 10742 only require provision 
of pricing data for licensing approval and do not give ANVISA any 
power over these pricing decisions.  Bernardo stated that the 
regulations apply equally to Brazilian and imported products.  He 
dismissed industry concerns that anti-trust considerations might 
prohibit provision of pricing data.  Bernardo assured Emboffs that 
ANVISA would protect companies' proprietary commercial strategy 
information, but would share with other GoB agencies the pricing 
information provided.  End Summary. 
 
¶2. (U) Emboffs met, at our request, with ANVISA reps Bernardo and 
Ferreira to urge that industry concerns over a new regulation 
(185/2006) be taken into account, as well as to clarify the 
regulation's provisions.  In order to obtain ANVISA approval for 
registering or re-registering medical devices, the new regulation 
requires companies to provide commercial/pricing data on the 
product.  Companies are required to provide 1) the intended price 
for the product on the Brazilian market; 2) the company's estimates 
of the number of patients that would use the product; 3) factory 
price and distribution margins; 4) expected sales and marketing 
expenses; 5) a list of substitute or similar products and their 
prices; and, 6) if the product is sold in any of ten specified 
countries (Portugal, France, U.S., Germany, Australia, Canada, 
Spain, Italy, Japan and the United Kingdom) then price at which it 
sold in those markets must be submitted, along with supporting 
documentation. 
 
¶3. (U) Bernardo argued that the new regulation was simply the next 
step in the process of regulating law 10742 of 2003.  This law, he 
said, requires that commercial and pricing data be provided in order 
to register pharmaceuticals and medical devices.  ANVISA began the 
process by requiring the same information for pharmaceuticals, 
which, he affirmed, the companies had been providing without 
incident.  It simply took ANVISA some time to grapple with how to 
approach the less standardized medical devices sector.  Bernardo 
said ANVISA and the Ministry of Health had held extensive 
discussions with government institutions, health insurance companies 
and the industry to understand the market of medical devices. 
After talking to industry and government, in December 2005, ANVISA 
put the resolution 185/2006 for public comment until February 2006. 
In November 2006 the resolution was passed and it goes into effect 
on December 13. 
 
¶4. (U) According to Bernardo, ANVISA consultations with other 
institutions pointed up a number of information problems in the 
sector.  The federal agencies responsible for the federal health 
system (SUS) and private health insurance companies stated that the 
costs of medical devices have been a large factor in increasing the 
costs of their operations.  There also was considerable confusion 
over pricing of devices and which devices are substitutes, Bernardo 
affirmed.  He alleged that they found in one case that the same 
basic product has sixty different prices on the market from 
different providers. 
 
¶5. (U) ANVISA and Ministry of Health decided to apply the pricing 
data requirements to about 5 percent of the medical devices on the 
market, according to Bernardo.  The products chosen are the ones 
that have shown consistent price increases over the last five years 
for SUS and health insurers.  Health insurers and government are 
responsible for 80 percent of the demand for these products, 
Bernardo stated. ANVISA stated that current information is 
asymmetric, making it difficult for customs and ANVISA to classify 
products.  Government also faces difficulties in correctly taxing 
these products, Bernardo alleged.  The products listed are for: 
cardiovascular procedures; orthopedic procedures; clinical analysis 
 
BRASILIA 00002606  002 OF 002 
 
 
(laboratory procedures); kidney therapy; ophthalmological 
procedures; hemotherapy procedures; and otorhinolaryngologist 
procedures. 
 
¶6. (U) Bernardo stated that ANVISA will use the information received 
to put together a database and create a standards nomenclature to 
simplify the process of customs processing and product registration 
with ANVISA.  Government will also use the information to correctly 
tax the products.  ANVISA will also use the information collected to 
provide price and quality comparisons, allowing government bodies 
responsible for procurement to make better decisions.  Bernardo 
affirmed that pricing information is public information and will be 
released to entities with access to its database, but companies' 
proprietary marketing strategy information would be kept 
confidential. 
 
SIPDIS 
 
¶7. (SBU) Emboffs raised a series of concerns that industry has put 
forward about the measure, including: 1) the difficulty of gathering 
much of the information requested; 2) anti-trust considerations as 
the regulation requires companies to provide pricing data on 
competing products; 3) that the regulation would serve as an 
additional obstacle to getting devices licensed, and thus would 
reduce Brazilian consumers' access to the latest innovative 
technologies; 4) the impression that this regulation creates that 
Brazil is headed towards price controls for these devices; and, 5) 
whether the regulation applies equally to imported and domestic 
devices. 
 
¶8. (SBU) In dismissing concerns over anti-trust law or that industry 
would have difficulty providing the data, Bernardo argued that the 
pharmaceutical industry has been providing similar data without 
incident for over a year.  The new requirements were not onerous, he 
affirmed, and thus would not limit new product registrations. 
Moreover, the law upon which the new regulation is based does not 
allow for price controls on medical devices.  It would take new 
legislation passed by Congress to introduce such controls.  Finally, 
the regulation applies equally to imported and domestic products, so 
there is no national treatment issue, Bernardo affirmed. 
 
¶9. (SBU) Emboffs requested an advance copy of the form that 
companies will have to fill out.  The form is now also available on 
the ANVISA internet site (www.anvisa.gov.br), along with an 
instruction manual explaining how to fill out the form.  Companies 
may be required to submit supporting documentation in some cases. 
After the resolution goes into effect on December 13, there will be 
a sixty-day phase in period for companies to begin complying with 
the resolution.  Bernardo implied that, were there clearly serious 
and justified difficulties in meeting the new requirements during 
this period, ANVISA might tweak the procedures or requirements.  But 
it would be forging ahead with implementation, he said. 
 
10 (SBU) Comment:  In our own review of the text of law 10742, upon 
which Bernardo said this measure was based, we did not find specific 
mention medical devices (as opposed to pharmaceuticals).  That does 
not necessarily mean that the new regulation is without legal basis 
in other legislation.  It does suggest, however, that ANVISA's 
ultimate intent is controlling costs in the public health system, as 
law 10742 was clearly aimed at reducing pharmaceutical prices. 
 
SOBEL