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### Viewing cable 05BRASILIA2143, STAFFDEL O'KEEFE EXAMINES PHARMACEUTICAL REGULATORY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05BRASILIA2143 | 2005-08-11 19:55 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Brasilia

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 03 BRASILIA 002143

    SIPDIS

    SENSITIVE

    H PASS
    HHS FOR VGIDI
    FDA FOR CGAYLORD
    PMEEKS AT OES/STC
    STATE PASS USTR
    NSC FOR CRONIN
    AID FOR LAC/SA

    E.O. 12958: N/A
    TAGS: ETRD SOCI TBIO KIPR IPR
    SUBJECT: STAFFDEL O'KEEFE EXAMINES PHARMACEUTICAL REGULATORY
    ISSUES

    This cable was co-drafted by AmEmbassy Brasilia and
    AmConsulate Sao Paulo.

    ¶1. (SBU) Summary and Introduction.  House Energy and Natural
    Resource Committee Counsel Colleen O'Keefe and Chris Knauer
    visited Brazil June 27 to July 2 to look at the degree to
    which local drug companies were producing substandard
    medicines - which eventually might find their way into the
    U.S.  The two counsel, accompanied by industry reps and
    Embassy/Consulate staffers, met with Brazilian regulatory
    authorities, government officials, current and former
    federal deputies, scientists, victims of substandard
    medicines, prosecutors and pharmaceutical production
    facility staff.  Staffdel focused in particular on a class
    of drugs labeled "similars," which are like generics but are
    not in all cases tested for bio-equivalence.  Officials at
    ANVISA (the Brazilian version of the FDA) admitted that only
    by 2014 would producers of similar drugs be required to test
    their products, but even then the required tests would only
    be a fraction of what the FDA requires.  The current (and
    former) Federal Deputies that Staffdel spoke with agreed
    that the situation was less than ideal, but felt that only a
    consensus solution (involving large and small "similars"
    producers, consumers, and government) would move the ball
    forward.  They did not anticipate major changes to the
    prevailing regulatory system in the short-term.  End Summary
    and Introduction.

    Background
    ----------

    ¶2. (U) In 1999, Brazilian law authorized the production of
    generic drugs (i.e., pharmaceuticals which copy the formulae
    of reference medicines).  Generic products must undergo bio-
    equivalence tests prior to being authorized for use, and are
    sold under the name of the product's principal active
    ingredient.  The 1999 law, however, did not extinguish the
    existence of the country's pre-1999 category of home-grown
    low-cost medicines, called "similars," i.e., similar to
    reference drugs.

    ¶3. (U) Similars sprouted in Brazil during the 1950s, a time
    when the Brazilian government did not recognize
    international pharmaceutical patents.  Similars account for
    nearly 40 percent of the local pharmaceutical market and
    sell for up to ten percent less than the corresponding
    reference drug.  They are sold under their own brand name,
    and prior to November 2003 were not required to undergo any
    bioequivalence tests at all.  While testing requirements are
    gradually being phased in, only in 2014 will all similars be
    obliged to undergo tests prior to their sale.  Of the 17,000
    drugs --  and 32,000 different variations of drugs/dosages -
    registered with ANVISA, a large percentage fall into the
    category of similars.  Among the firms producing similars
    are the 17 state-owned pharmaceutical manufacturing
    companies in Brazil.   The Brazilian government is also a
    purchaser of similars as well (overall, it buys 51% of drugs
    sold in the country).

    Ineffective Medicines
    ---------------------

    ¶4. (SBU) Local Brazilian attorneys briefed staffdel on the
    problems caused by substandard similar medicines which may
    be ineffective, have no effect at all (placebo), or worse be
    harmful to those taking the drug.  Since many similars are
    used for chronic conditions, a causal link is often
    difficult to establish.  They pointed out that containing
    the same active ingredient does not mean the similar is as
    effective as the reference drug, which may have a completely
    different molecular structure.    An illustrative example
    these interlocutors offered was that of carbon:  diamonds
    and coal have the same chemical formula but that does not
    mean that would have the same effect on the body.  They
    argued that bioequivalency testing is essential.  However,
    only a fraction of similar medicines in Brazil have been
    subject to bioequivalency testing and it is not possible for
    consumers to determine which have undergone testing and
    which have not.
    ¶5. (SBU) Yet another problem these attorneys identified was
    the issue of the quality of the active ingredients in
    similar drugs.  Often the active ingredients contained in
    such drugs are produced in labs, perhaps in India or China,
    which are not subject to strict quality control standards.
    Indeed, a February article from Veja magazine, Brazil's
    equivalent of "Time," noted that Aventis Pharma was in the
    midst of three years of litigation in an effort to get a
    similar drug with unclear lineage (and competing with one of
    the company's own products) withdrawn from the market.

    ¶6. (SBU) Local attorneys introduced Staffdel to the
    surviving family members of two victims of an ineffective
    similar drug (Celobar).  According to these attorneys,
    ANVISA had approved Celobar - which contains the active
    ingredient barium sulfate - but later recalled the product
    after it was deemed unsafe for consumption.  However,
    notwithstanding the recall, they said, Celobar can still be
    purchased from many pharmacies in the country.  Overall, 23
    deaths have been attributed to the drug so far.

    Overburdened Regulators
    -----------------------

    ¶7. (SBU) In a frank and open meeting with staffdel, ANVISA
    drug regulator Dr. Davi Romel outlined some of the hurdles
    ANVISA faces in bringing order to the chaotic Brazilian
    pharmaceutical market.  The situation involving similars, he
    stated, had already been dealt with legislatively and was
    gradually coming under control.  (Comment:  this was a
    statement with which other commentators did not agree.  End
    Comment.)  Romel said that in November 2004 the production
    of 30 similar drugs had been cancelled and another 100
    temporarily taken off the market.  He thought that the
    biggest problem ANVISA faces is the sheer number of local
    drug manufacturers, many of which are small and medium-sized
    firms which do not have rigorous quality control standards.
    While ANVISA seeks to improve industry quality through
    yearly inspections, he admitted that the agency lacks the
    FDA's decades-long regulatory tradition.

    ¶8. (SBU) During the past few years the number of local
    companies in the field had dropped from 380 to 250, he
    noted, adding that in the end it would need to decline even
    more as eventually this would be an industry in which "only
    the big guys could play."  As the number of firms (and jobs)
    shrank, he continued, ANVISA faced increasing pressure to
    ease up on its regulatory oversight.  An even bigger
    problem, Romel felt, was the existence of 6,000 compound-
    producing pharmacists, comparable to the by-gone
    apothecaries in the U.S., who manufactured medicines in
    their backrooms.  These apothecary-manufactured drugs were
    often sold in low-cost pharmacies which cater to the poor.
    The conceptual problem that Brazil faced as a whole, Romel
    commented, was that often the issue of quality health care
    was equated with access to affordable medicines, with
    questions such as safety of medicines often taking a back
    seat.  While ANVISA could set standards, he declared, actual
    enforcement of its dictates fell to state law enforcement
    authorities, many of which were overburdened and
    understaffed.

    Comments from a Former Brazilian Congressman
    --------------------------------------------

    ¶9. (SBU) StaffDel also met with former Congressman Vicente
    Caropreso (PSDB) (please protect) from Santa Catarina state.
    Caropreso is a neurosurgeon and was one of the leaders in
    Congress that fought for the institution of generics in
    Brazil in the late 1990s.  At June 28 dinner, he opined that
    the 2014 deadline for similares to meet generic standards
    was too distant and alleged that corruption and deal making
    between the similar companies and ANVISA was keeping the
    industry alive.  When asked what should be done about
    similares, Caropreso said that the government should
    concentrate its efforts on monitoring the production,
    distribution and sale of all drugs.  Tighter
    controls/standards, he felt, would naturally push out the
    similar producers and make room for legitimate generic drugs
    as a safer alternative.

    Changing a Culture
    ------------------

    ¶10. (SBU) Finally, StaffDel met with members of the
    Brazilian Bar Association (OAB) and a professor of pharmacy
    from the University of Sao Paulo (USP).  OAB members stated
    that they have launched a public awareness campaign in Santa
    Catarina State focusing on the distribution of pamphlets to
    physicians and citizens explaining the dangers of similares.
    In response, similar producers in Santa Catarina have
    accused the OAB of attacking national industry in support of
    "large, exploitative multinational drug companies."
    Meanwhile, in staffdel's conversations with Professor
    Yasaka, Vice-President of the Sao Paulo Pharmaceutical
    Society, the latter noted that he has done extensive
    research on the effectiveness and safety of similar drugs --
    and as a result has become one of their strongest opponents.
    Both Yasaka and OAB members echoed Caropreso's view that
    there is widespread corruption within the industry.

    ¶11. (U) Staffdel O'Keefe has cleared this cable.

    LINEHAN

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