Just a few days after the announcement of the new strategy for the Industrial-Economic Health Complex (Ceis) by the Brazilian government (check out our special material on the subject here), the Federal Audit Court (TCU) decided that the Ministry of Health (MoH) must not celebrate new productive development partnerships (PDPs) until measures are adopted to evaluate technological transfers and objective criteria for the selection of private partners.

The PDP is a type of government partnership that aims to establish cooperation between public and private laboratories for the development, training and transfer of technologies considered strategic for the Unified Health System (SUS).

According to previous announcements made by the MoH, the current PDP framework is being reviewed and a new draft should be put to public consultation soon.

Since 2017, the TCU’s Specialized Health Audit Unit (AudSaúde) has been supervising the progress of the 88 PDPs (85 for medicines and 3 for health-related products) and had already issued recommendations to the MoH for the regulatory framework applicable to partnerships (TCU Judgment 730/17) to be improved.

However, in view of the authority’s inertia, the control body published a new decision (TCU Judgment 2.015/23) with the following

non-extendable determinations:

  • within 60 days, the MoH must provide a schedule for the definition and implementation of the criteria and methodologies that must be observed to determine the technology transfer (know how) pricing. On this topic, the MoH reported that the Brazilian Institute of Applied Economic Research (Ipea) was hired to prepare a study on the subject;
  • within the same period, public laboratories must also be informed about the need to conduct a selection or pre-qualification process of the private partner, adequately justifying when its realization is not feasible;
  • within 180 days of the publication of a new interministerial normative act on partnership modalities – mainly PDPs, technological orders and compensation measures – the MoH must include the verification of compliance with the principles of public law among the criteria for approval of PDPs – in particular those of publicity, legality and morality. A draft of new regulation on the subject is already being made jointly by the MoH, the Ministry of Economy (ME) and the Ministry of Science, Technology and Innovations (MCTI); and
  • in the same period, the PDP regulatory framework and the internal regulations of the Technical Evaluation Commission (CTA) and the Deliberative Committee (CD) should be reformulated, establishing:
    • objective parameters for the analysis of project proposals and the assignment of grades to proposals;
    • criteria for the division of responsibilities of public laboratories – when more than one PDP project proposal for the same product is approved; and
    • the need for the CTA to reanalyze proposals related to the same drug and tie-breaking criteria and to readjust market percentages.

It was recommended to the MoH that no new PDPs be concluded until the definition of objective mechanisms to evaluate the completion and effectiveness of the transfer of technologies object of partnership. The MoH was also recommended to:

  • establish criteria for evaluation, definition and periodic re-evaluation of products deemed strategic to the public health system (“SUS”) and eligible for partnerships. In addition, future normative rules should mention products that are no longer relevant to the CIS and have been the subject of previous PDPs;
  • define criteria for obtaining reference prices for acquisitions made after the PDP is in force, including:
    • studies that demonstrate the economic impact of technology transfer, as well as the benefits achieved with PDP;
    • cost of the active pharmaceutical input (API) produced in Brazil and comparative with values practiced in the international market; and
    • need for the API national production.
  • include forecast of the changes in the demand percentages previously defined for a specifc product, considering the following criteria:
    • evaluation of the change in the demand percentages defined in previous PDP selection processes needs to be evaluated by the Secretariat of Science, Technology and Strategic Inputs (SCTIE / MS) and the CTA and deliberated within the scope of the DC;
    • conduction of a joint and detailed assessment of the impact of the new percentages on the forecast of prices broken down in the previously approved projects, since the prices established there consider not only the costs of the products manufactured, but also the technological contribution associated with internalization; and
    • whenever the modification of the public laboratory contemplated in the original selection process proves necessary, the opening of a process for the selection of new projects should be foreseen. This process should follow the ordinary route, with wide publicity and the possibility of participation of any public laboratory of the CIS that shows interest in the partnership. In addition, in these cases, when the annual publication of the SUS Strategic list of products occurs, it should be discriminated, among those that have already been the objects of previous PDPs, those that, justifiably, will have changed the demand percentages originally defined.
  • establish the need for MoH’s Secretary of Science, Technology and Innovation to evaluate clauses of tech transfer contracts executed between the public laboratory and the private partner;
  • define deadlines for: the performance of the technical team of the MoH’s Secretary of Science, Technology and Innovation in the scope of the extinction of projects; CTA and CD deliberations; analysis of follow-up reports; and conducting technical visits;
  • establish a maximum deadline for the inclusion of public laboratory facilities in the sanitary registration of the product and use of locally produced pharmaceutical input; and
  • define deadlines, procedures and standard documentation to be used to prove the technology transfer to the public laboratory.

It was also indicated to the MoH to increase the transparency of the acts related to the PDPs, with the disclosure of suspension dates, change of phase of each partnership, composition of the DC, history of the composition of the CTA and the CD, calendar, agenda and periodicity of the meetings of the evaluation and deliberation committees of the PDP.

In addition, comparative spreadsheets should be presented with the price of acquisitions of strategic products made by the MoH. The spreadsheets must include at least the last acquisition made before the PDP came into force, all acquisitions made during its term and the first five acquisitions made after the end of the PDP phase.

The practice of Life Sciences & Health can provide more information on the topic.