Drugmakers going into emerging markets are finding that what looks clear on paper may not be so in practice.
That's been industry's experience with the Brazilian National Health Surveillance Agency's (ANVISA) drug regulatory path, Benny Spiewak, senior counsel with Zancaner Costa, Bastos e Spiewak Advogados, told BioWorld Today.
On the surface, ANVISA's path looks to be on par with that of the FDA's. But when it comes to implementation, the similarities begin to fade due to the underlying rationale that drives the two agencies.
While the FDA takes a pro-safety, pro-health approach, ANVISA tends to look at the bottom line. It's a European Union model "with a tropical twist," said Spiewak, who helps life sciences companies navigate the Brazilian system.
He said he hoped that a Food and Drug Law Institute (FDLI) conference held in Sao Paulo this week would be the beginning of a new round of communication between the FDA and ANVISA that will address their regulatory differences so their paper similarities will hold true in practice.
Price controls are one of the biggest challenges for companies going into Brazil, as they have to get the price of their drugs approved before getting marketing authorization. Since the government is the most important buyer of medicines in the country, it imposes a price cap that represents a discount of up to 40 percent. "This is for starters," Spiewak said. Even with the discounts, not every new drug will be covered by the government's universal health care system.
In addition to the pricing structure, drugmakers can face a number of regulatory hurdles in Brazil. For one thing, the government seems to favor generic drugs and has no clear, straightforward policy for innovative drugs, Spiewak said. As a result, Brazil isn't known as a global launching point for new drugs. Other than perhaps a few new drugs from local companies, Spiewak couldn't think of any new drugs that were approved first in Brazil.
Another challenge is that Brazil's regulatory path is time-consuming and the level of transparency isn't as high as it could be. On average, the review time is 18 months to 24 months, Spiewak said, adding that there's no accelerated approval for unmet needs. Instead, Brazil views all drugs, except biologics, as the same.
Given the incentives for generics, Brazil also has a high level of competition that could lead to cutting corners on safety. For instance, a complex drug, such as a synthetic protein, has the same regulatory generic thresholds as an aspirin. "That's a bit scary," Spiewak said.
One of the topics at this week's FDLI conference was how to best regulate drugs that are more complex than traditional small molecules and even some biologics, J. Michael Nicholas, senior director of life cycle initiatives at Teva Pharmaceuticals Inc., told BioWorld Today.
How complex drugs are regulated makes a difference when it comes to follow-ons. In places such as Australia, Canada, Chile, Europe and Mexico, they're treated more like biologics, so clinical trials are required for approval of follow-ons. The FDA, however, treats proteins like small molecules, so trials aren't generally required for generic versions.
Whether they're biologic or synthetic like Teva's multiple sclerosis drug Copaxone (glatiramer acetate injection), proteins shouldn't be lumped in with small molecules, said Nicholas, who addressed the issue at the conference. Because the composition of those drugs is highly dependent on the manufacturing process, safety issues could arise that wouldn't be detected by bioequivalence testing, he added.
Those issues could increase in the future as more synthetic proteins are expected to be developed. And generally, those drugs are intended to treat serious diseases. Until the drugs are fully understood, "it makes sense to err on the side of caution" and require clinical trials for the follow-ons, Nicholas said.
The Draw of Brazil
Despite the regulatory challenges and unanswered questions, Brazil has become the No. 1 emerging market of choice for many drugmakers, Spiewak said, citing a recent survey in which 85 percent of biopharma executives indicated they were interested in the Brazilian market over other emerging countries.
He chalked that preference up to Brazil's diverse population of nearly 200 million people and the country's position as a gateway to other emerging economies, including the rest of Latin America, which is coming into its own as an important geographic focus for drug companies.
By 2015, Deutsche Bank estimated Latin America will have four of the top 20 biopharma markets. Most countries in the region are expected to grow their markets by more than 10 percent annually from 2011 to 2015 compared with less than 3 percent for the U.S. and 1 percent to 4 percent for Western Europe. (See BioWorld Insight, June 4, 2012, and July 2, 2012.)
Another thing Brazil has going for it is its economy. When it comes to gross domestic product (GDP) based on purchasing power, Brazil ranks second among the four BRIC countries (Brazil, Russia, India and China). With a 2011 per-capita GDP of nearly $2.5 trillion, Brazil was No. 75 among the world economies, according to the World Bank. Russia was No. 45, China ranked 94th and India came in at 125.
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