STAFFDEL O'KEEFE EXAMINES PHARMACEUTICAL REGULATORY

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