Read the Conversation
EF: Could you tell us about you, your role at CMED, and what your main priorities are for 2024?
DMC: I have a degree in biology, a master’s, and a Ph.D. in molecular biology. I've been working at Anvisa as a public servant since 2006, dedicating most of my time here to the area of medicine. I've also worked in other regulatory areas such as medical devices, cosmetics, importation, and pharmacovigilance, but most of my time here at Anvisa has been dedicated to the area of medicine registration. Since August of last year, I have been serving as the executive secretary of the Drug Market Regulation Chamber, which is CMED. At CMED, Anvisa acts as the executive secretary of the Chamber. It is an interministerial chamber formed by five ministries, and we serve as the executive secretariat, meaning we implement all decisions and deliberations of the Technical Executive Committee (CTE), which is the technical body of CMED, as well as the decisions of the Chamber’s council of ministers.
Regarding our priorities for 2024, the CTE of CMED has a strategic plan with a bold goal to update CMED’s regulatory framework. Several norms are under review, and this information is available on our website to ensure transparency and allow society to follow the review process of CMED’s regulatory procedures.
The main topics we are working on include, first and foremost, the revision of Resolution 2 of 2004, which I refer to as the “pricing bible.” It outlines all the criteria for pricing medications in Brazil. This resolution is now 20 years old, and our pharmaceutical market has evolved significantly since 2004, when it was primarily composed of synthetic and generic medications. Today, we have advanced therapies and biological medications, so there is an urgent need to revise Resolution 2 of 2004. This is one of the CTE's top priority projects.
In addition to revising Resolution 2 of 2004, we are working on several topics related to pricing. One of these is the pricing of incremental innovation medications. These are medications registered by Anvisa that represent some improvement or change to an existing medication, such as a new dosage form or a new combination. We will establish specific pricing criteria for those, which has been a significant request from the productive sector in Brazil, as the lack of criteria for pricing incremental innovation may impact investment in innovation in our country. The intention of the norm is to establish specific criteria for pricing these incremental innovation products, making this another priority project for 2024.
The CTE is also working on defining pricing criteria for advanced therapy products, which include gene therapies and are not currently covered under Resolution 2 of 2004. Up until now, we have priced six advanced therapy products, all classified as exceptional cases because our norms lack pricing criteria for this type of medication. Therefore, the CTE is developing a regulatory proposal that outlines the criteria for pricing advanced therapy products.
Lastly, in terms of pricing, we are addressing non-new biological products. These are currently priced under Communication No. 9 of 2016, and we aim to establish normative criteria for pricing non-new biological products and biosimilars. These are our main pricing objectives for 2024.
Additionally, we are also working on updating CMED's internal regulations, specifically Resolution No. 3, which is quite advanced. This is another priority project for 2024, and we aim to publish the updated internal regulations.
The last two projects in CTE's strategic plan involve defining a norm that addresses the Price Adequacy Coefficient (CAP) and updating Resolution 2 of 2018. The CAP is a mandatory discount applied to public medication purchases. All medications destined for purchase by government entities or bought due to a court order must have this discount, which is currently 21.53%. A CTE group is working on updating the criteria for applying this mandatory discount.
We are also updating Resolution 2 of 2018, which deals with penalties for market violations. These are the topics we are working on simultaneously to attempt a comprehensive update of CMED's regulatory framework.
EF: On the topic of new scientific discoveries, such as advances in rare diseases and new vaccine technologies, when will these new therapies arrive in Brazil, and how will a favorable field for innovation be created in the country with the help of CMED?
DMC: That's our big challenge - balancing the needs of the SUS, the largest public healthcare system in the world while creating an environment where new technologies can flourish. How can we ensure that medication prices allow the industry to bring them to Brazil? The industry needs to make a profit, and we need to recognize that. On the other hand, we need medications that ensure the sustainability of the health system, whether public or private. How do we ensure the health systems' sustainability?
When we talk about innovation, we have incremental innovation, which is an improvement. The concept of innovation from the OECD itself defines it as an improvement of an existing product or process. I see incremental innovation as a crucial step for the national industry to advance towards radical innovation, which is not yet a reality for the Brazilian industry but will certainly become one. Innovation requires greater interaction between our industry, academia, and government. No country can innovate without this triple helix: academia, government, and industry.
In terms of incremental innovation, CMED aims to establish criteria to encourage the national industry to invest in innovation, even if it is not radical innovation. This step is important to bring more productive technology to Brazil and fulfill Goal 2 of the New Industry Brazil program, increasing the sustainability of our health system by having 70% of the necessary inputs manufactured domestically.
Regarding radical innovation and advanced therapies, how do we ensure this innovation? The world is discussing how to price advanced therapies, but there is no established formula yet. Many countries discuss risk-sharing tools, such as staggered payments as results are achieved, so the health system doesn't immediately pay the total value but does so gradually as clinical outcomes are reached. I believe our health system will work on a type of risk-sharing strategy to facilitate access to these high-cost products.
EF: This requires improved collaboration and cooperation between the public and private sectors. As a member of these sectors, what advice would you give to foster better collaboration, and what other benefits come from encouraging public-private partnerships in Brazil?
DMC: To foster this important public-private partnership, which we know is crucial for advancing innovation, we need robust policies and a clear and predictable regulatory and legal framework. This is an area where Brazil still needs to improve, providing the industrial sector with predictability so they can invest according to rules that offer the necessary legal security for that investment. I would say that to improve public-private relations, we need solid and predictable regulatory and legal frameworks and transparency. Strengthening dialogue is essential to provide the legal security needed not just for investors but also for regulators, as health system managers also require legal security and predictability in decision-making.
I think this is one of the significant issues in our country. Despite having a well-defined regulatory framework, we see very productive development partnerships, which should be country policies rather than government policies, that have gone through various phases that hinder continuity. This impacts private sector investment decisions due to uncertainty about the continuity of such programs.
EF: On the topic of the new industrialization plan in Brazil, last week, we talked with Márcio Elias Rosa about the mission to foster the best health system. What are your expectations for this plan, and how can it further stimulate the country's pharmaceutical sector?
DMC: When we talk about the major goals of the New Industry Brazil (NIB) program, which highlights the importance of sustainability and innovation, we see that sustainability is itself industrialization. To achieve sustainability and produce the necessary inputs and finished products domestically for our country's health, industrialization is the critical component. Our industry must be capable of producing these inputs. So, as CMED, we need to provide predictability and a regulatory framework that allows investors to make decisions, knowing, or at least having a good idea of, the product’s final price.
The process of developing a medication is extremely long, even for incremental innovation. We see Anvisa's queues today with two years of waiting to register a new medication. It goes through the research and development phase, then the registration phase, and finally the pricing phase. By the time it reaches the pricing stage, a significant investment has already been made. At the beginning of the project, the investor or producer should know the final price to be viable for supplying the product to the population. Thus, CMED needs to establish clear rules that consider all specificities. Today, Resolution 2 is an excellent resolution for most pricing issues. For generic or new synthetic drugs, our rules are aligned with other countries and appropriate for pricing these products.
However, when talking about incremental or radical innovation, considering products for rare diseases or gene therapies, specificities maybe not yet covered. Predictability from the development process's start is essential. Therefore, I see CMED’s role in the NIB program as establishing updated rules aligned with today’s pharmaceutical market, providing the necessary predictability for the sector.
I view the program positively, and I believe it will perform well once all the pieces are in place. Innovation is an ecosystem; it will not be driven solely by the Ministry of Health or the Ministry of Development, Industry, and Trade. It involves patents, clinical studies, academia, pricing, and registration. This ecosystem must be well-coordinated to bring more industrialization and sustainability to our health inputs production.
EF: What is CMED's perspective on incorporating AI, device interoperability, and integrating new technologies into regulatory practices?
DMC: I think artificial intelligence can significantly optimize our processes. Talking about machine learning, for example, we handle large volumes of processes, not just pricing dossiers, but we also receive complaints at CMED. Any citizen who goes to a pharmacy and encounters a price above the established one can file a complaint with us. It’s like Iguaçu Falls emptying into a sink, in terms of human resources we have to analyze these complaints. I imagine that machine learning could greatly optimize certain stages of this process, allowing us to focus our human resources on tasks that truly require them. Tasks that are repetitive or could be performed by AI would save human effort, enabling the team to focus on updating the regulatory framework, something that must be done by humans. Machine learning would also be extremely relevant for CMED's work processes. However, whenever I discuss AI, I like to emphasize that human interaction with technology will always be necessary.
EF: Given personnel shortages, how can we attract more people to work in the sector? How can it be made more attractive?
DMC: In the public sector, we face a significant bottleneck: we need civil service examinations to have staff effectively working, for example, at Anvisa. Considering the spending cap, it has been very challenging to restore the necessary human resources to carry out our activities. We are estimated to have a deficit of over 500 staff members in order to restore our workforce. It’s a highly attractive area displayed by Anvisa’s recent civil service examination with substantial competition. The salaries are also appealing, though we face the limitation of needing financial resources for civil service examinations to increase the staff.
EF: Why is a dollar invested in Brazil worth more than a dollar invested elsewhere?
DMC: Because of the unified health system. SUS makes Brazil an extremely attractive country for any health investor. It guarantees universal, equitable, and free access to any citizen. Brazil is a significant purchaser of pharmaceuticals and has the largest pharmaceutical market in Latin America which oscillates between the fifth and sixth largest in the world.
If I may, I’d like to share some data from our pharmaceutical market yearbook, which will be published later this year and includes 2023 data. In 2023, there were 220 profitable companies, more than 268 billion dollars in revenue, over 4,799 products marketed, nearly 2,000 active pharmaceutical ingredients marketed, and 6.2 billion medication packages marketed. So, we see it's a very large market with great potential for growth, provided there is investment in research and development. This will certainly lead to job creation. It’s a cycle that will yield economic and social benefits for the country. Investment in innovation generates these benefits. This is clear even in the UN Sustainable Development Goals. Innovation is prominently featured, and investment in health brings positive outcomes for the country.
EF: Do you have a final message for the readers?
DMC: What I often hear at events and in conversations is the need for collaboration between sectors so our industry can advance, allowing us to reap the benefits. These benefits, however, are not immediate. Often, we think a rule change, like in drug pricing, will bring results the next day, but it’s a development process. We recently approved a law that was highly fought for to advance clinical research, bringing significant economic and social results to the country. This change will become visible in a few years. Collaboration between all sectors is fundamental for improving our health indices.
