Brazil—The Largest Market in Latin America
Brazil was originally seen as one of the world’s strongest emerging markets when appointed the host country for the 2014 FIFA World Cup and the 2016 Olympic Summer Games. Unfortunately, the upward rise and growth of Brazil has been challenged since 2013 by increasing unemployment rates, rising inflation, and an economic recession. We examine this market, the largest in Latin America.
HTA QUARTERLY | LATE SUMMER 2017
Looking at You, Brazil—The Largest Market in Latin America
Brazil was originally seen as one of the world’s strongest emerging markets, and the most robust market of South America, when appointed the host country for the 2014 FIFA World Cup and the 2016 Olympic Summer Games. Unfortunately, the upward rise and growth of Brazil has been challenged since 2013 by increasing unemployment rates, rising inflation, and an economic recession. The impeachment of President Dilma in May 2016 was also a consequence of economic instability.1
Brazil is composed of 26 states and 1 federal district. As of 2015, the population was 207.8 million, and gross domestic product (GDP) totaled $1.8 trillion (in US dollars).2 According to 2014 statistics, the life expectancy among the Brazilian population was 74.7 years.2 Health expenditures are approximately 8.3% of the GDP (2014)1—comparable to health expenditures of the United Kingdom (UK) and Australia, while ahead of those of China (5%) and India (4%).3
Structure of the Healthcare System
Approximately three-quarters of Brazil’s population relies on free public healthcare through Brazil’s Unified Health System (Sistema Único de Saúde [SUS]), while one-quarter of the population is enrolled in private healthcare (although many use the public system simultaneously). The idea of free public healthcare is a bit convoluted, as healthcare plans covered under the SUS are split between public and private providers. It is customary that most in-patient services (or hospitals) are privately owned while outpatient services are publicly run.4 The SUS is the largest public health system in the world4 and is funded through federal and local taxations as well as through employer and employee contributions.5 Consequently, the SUS suffers from capacity issues; system users complain about lengthy waiting times,5 confirmed by the country’s estimated 2.5 hospital beds per 1,000 persons, which are unevenly distributed across the country.6
Agência Nacional de Saúde Suplementar (ANS), a national regulatory agency linked to Brazil’s Ministry of Health, is in charge of the country’s private health plan sector. Along with the influence of ANS, the inpatient or hospital segment also has strategic power in Brazil’s healthcare system. A law approved by the Federal Chamber of Deputies in December 2014 allows Brazilian hospitals to accept foreign investments.4 Agência Nacional de Vigilância Sanitária (ANVISA), founded in 1999 as part of the Ministry of Health, coordinates the regulatory approval of medicines and devices. Câmara de Regulação do Mercado de Medicamentos (CMED) is the office of ANVISA responsible for establishing and adjusting prices of health technologies.
In 2014, in an attempt to regulate prices of pharmaceutical products, CMED fixed the average price increase of medicines to a maximum of 3.35%, the lowest price increase ever approved in Brazil.7 There are 3 drug categories defined according to the profile of product competition. Price adjustments are allowed on these 3 levels from 1.02% to 5.68%. The largest percentage price increase is designed for drugs with greater market competition (eg, drugs with greater generic competition are generally more affordable and are, therefore, given a higher percentage price increase), while the smallest percentage price increase is intended for products with medium and low levels of market competition (as these are commonly the most expensive products).7 Interestingly, over 40% of the medicines fall under the low competition category. Innovative patented drugs can be bucketed within 2 categories (category I or II) depending on their ability to demonstrate superiority of efficacy, safety improvement, or cost reduction over comparators. Prices are based on the lowest international price of a basket of several countries (Australia, Canada, Spain, USA, UK, France, Greece, Italy, New Zealand, and Portugal),8 and the most important criterion seems to be the clinical efficacy.9
HTA: Reimbursement of Pharmaceuticals
Health technology assessment (HTA) is a popular buzzword these days in the realm of market access. While the prominent HTA players have been Canada and the European Union (EU) 5 (France, Germany, Italy, Spain, and the UK), these types of reimbursement decisions are becoming more popular in emerging markets such as Brazil and Latin America. The first ISPOR conference in Latin America was in September 2007 in Cartagena, Columbia, and the conference has occurred on a biennial basis ever since. In the last decade, HTA organizations in Latin America have continued to evolve as key stakeholders in the healthcare decision-making continuum.
In Brazil, HTA processes began in 2000 and were led by the Secretariat of Health Care Provision (SAS, Secretaria de Atenção à Saúde), part of the Brazilian Ministry of Health (MS, Ministério da Saúde). A more formalized HTA process was established in December 2011, according to Law 12.401, with the initiation of the National Committee for Incorporation of Technologies (CONITEC, Comissão Nacional de Incorporação de Tecnologias ) in the Unified Health System (SUS).10 The goal of CONITEC is to provide rational recommendations, via a scientific evidence-based approach, on the incorporation, alteration, or exclusion of health technologies in the National Medicines List (RENAME, Relação Nacional de Medicamentos Essenciais). Manufacturers requesting coverage of technologies need to present evidence in the form of clinical (efficacy, safety, systematic reviews, meta-analysis, etc) and economic (budget impact, cost-effectiveness) studies. CONITEC meets monthly during 2-day sessions.
Key Learnings for Manufacturers
The advantage of establishing Brazil as the trendsetter in Latin America is that its HTA process and the recommendations provided by CONITEC are publicly available on the CONITEC website. The website is easily searchable and provides recommendations from 2011 to 2017. The CONITEC recommendations often include information that is presented in NICE (National Institute for Health and Care Excellence) assessments (UK). Manufacturers might benefit from optimizing the launch sequence of their products to attempt to obtain the best price in Brazil since international price referencing is utilized for innovative, patented, novel therapies.
Although recommendations are easily accessible to the public, the reasons for exclusion of the health technology on the National Medicines List or reasons for negative decisions on reimbursement are often ambiguous and left unclear. The intricacies between public and private health services, and the national, regional, and local levels, pose as challenges to obtaining market access in the country. Manufacturers should also be prepared for long timelines. In addition to reimbursement, health technologies have to receive regulatory approval from ANVISA prior to CONITEC review, which takes, on average, 449 days vs 186 days for the Food and Drug Administration (FDA) in the United States.11