Medical Technology Industry Comments on Anvisa's Proposal to Require Specific Economic Data
Introduction
Industry recognizes the sovereign right of every government to regulate to promote the health and safety of its people. We commend the Brazilian government's efforts to protect patient health. We support regulations that improve the safety and efficacy of medical technology.
The regulations proposed by ANVISA, as written, will not achieve these objectives. Requiring a vast amount of economic data as a condition for registration - a process that is intended to ensure safety and efficacy -- will negatively affect patient access to medical technology and disrupt the Brazilian health care market. Innovative medical technologies will be delayed or withdrawn from the market. Patients will not receive the care they deserve.
Industry Views
Economic Data Irrelevant
ANVISA's mission is to regulate for the safety and efficacy of medical technology. Safety and efficacy are determined by scientific data. Registration in Brazil has been provided on that basis.
The submission of economic data is not relevant to ANVISA's mission. Safety and efficacy are not determined by economic information.
Patient Access To Innovative Medical Technology Impeded
Even if companies could provide the data ANVISA proposes to require - which is unlikely (see below) - tying registration, and hence market entry, to pricing data delays patient access to innovative medical products. ANVISA would not only have to analyze the registration application for information on safety and efficacy, but also have to ensure that the voluminous data required was provided. This can only result in delays, as ANVISA would try to determine whether each application for the many medical technology products seeking registration or re-registration fulfilled its requirements.
If the penalty for failing to provide some or all of the information would be denial of registration, the process of market entry would be delayed or prevented. Companies would either have to convince ANVISA that the data are not available or would simply withdraw from the market, which would ultimately harm patient access to life-saving medical technologies.
In the longer term, Brazilian patients would increasingly experience less medical technology innovation. Academic researchers have, for instance, demonstrated empirically that direct and indirect price controls result in the delays in new prescription drugs. Price and reimbursement controls have also had a significant negative impact on the level of research and development expenditures over time.
Brazil is known to provide one of the highest standards of medical care for its patients, with its highly trained physicians and medical staff. This regulation would have a negative impact on medical technology R&D in Brazil, as the information gleaned from obtaining the most innovative products slowed - similar to the effect Brazil's "informatics policy" had in the 1980s on hindering the development of computer technology. This lack of innovative products available to patients throughout the rest of the world would deny Brazilian patients access to the latest state-of-the-art medical treatments and would run the risk of setting Brazil's health care system behind the standard level of medical care available worldwide.
Industry's concern about the prospect of patient access to innovative medical technology should not be minimized. ANVISA's proposal is without precedent. No other country in the world requires submission of pricing information in order to obtain regulatory approval. Those countries that provide for government reimbursement of some or all medical technologies separate regulatory registration or approval from reimbursement decisions.
Antitrust Considerations
ANVISA's proposal would require companies to provide the prices for their products in other countries, the prices that the company intends to charge in Brazil, and the prices of "substitute" products. Companies would not be able to comply with these requirements for several reasons. First, companies are unlikely to have information about their competitors' products because this information is not made publicly available, and U.S. (and other countries') antitrust laws prohibit a company from obtaining price information from a competitor. Any effort to obtain prices from a competitor would subject the companies involved to charges of collusion. In addition, the company's own pricing decisions are typically the prerogative of the marketing company, not the parent corporation. In these cases, country-specific pricing practices will be decentralized and prices will be difficult to obtain. In addition to these considerations, information about prices that companies intend to charge is very sensitive. If this information were made public, it could be extremely harmful to the companies involved as well as to the competitive process.
ANVISA Proposal Hindrance to Trade
The proposed ANVISA regulation acts as a restraint on trade by requiring companies to submit pricing information as a condition for entry into the Brazilian market. This is an unreasonable requirement that defies the spirit, if not the letter of the WTO Technical Barriers to Trade Agreement. The proposed regulation clearly is not the least restrictive way to regulate medical devices. In fact, it is much more restrictive than necessary to fulfill Brazil's legitimate objective of providing safe and effective medical technology to patients.
Foreign Reference Pricing Distorts Markets
The purpose of ANVISA's proposed regulation is unclear. If the purpose is price monitoring, the objective of such an exercise is unknown.
If the Brazilian Government plans to introduce some sort of price limitations or controls, patient access to medical technology could be further hindered. While the medical technology industry has experienced efforts in some other countries to use foreign prices as a reference for internal price setting, Brazil is proposing the most far-reaching regulation the industry has seen globally. Industry has consistently fought the use of foreign reference pricing in global markets as a distortion of market based pricing. Industry believes market forces based on competition should establish prices in the health care marketplace.
Foreign prices are not a good pricing indicator because they ignore both the costs of doing business in a country, such as distribution costs, labor costs, etc., and the unique aspects of a country's health care system that affect pricing, such as average lengths of hospital stay, physician fees, etc. The use of reference pricing also ignores manufacturer investment in the continual research and development necessary to achieve the latest improvements in state-of-the-art medical technology.
Data Not Available
Companies are not likely to be able to provide the data that ANVISA is seeking for several reasons:
First, price data between buyer and seller in a country is subject to confidentiality provisions in each contract. Companies cannot provide such data without violating contracts and expending considerable resources in primary data collection and validation.
Second, prices of medical technology, as distinct from pharmaceuticals, are difficult to obtain. Manufactures sell a wide variety of products within each category. The terms, conditions, and products vary substantially in the various markets - greatly complicating the collection and matching of relevant product prices. Even if such prices were available in other countries, they would not indicate an appropriate comparison with prices or selling conditions in Brazil.
Third, ANVISA is proposing to require that each company collect, compile and provide thousands of data points from its subsidiaries all over the world. No company maintains this type of information. The cost of compliance would be very high, which would either be passed on to patients or discourage market participation.
Fourth, because of the unprecedented nature of ANVISA's data requirements, some companies may determine that compliance would be too costly in terms of their global operations. If data were provided to Brazil, other countries may demand similar data. Costs would escalate.
Handling of Data and Use Unclear
The Ministry of Health has traditionally handled Brazilian pricing and reimbursement matters. Ultimately, this regulation allows ANVISA to control the entry of new technology into the market for reasons other than the safety and efficacy of a product.
Moreover, the voluminous amount of information ANVISA is requesting from nine different countries on all products listed in Annex I and their substitutes would require a substantial amount of government resources to compile and analyze. Moreover, there is no assurance that particular devices will be available uniformly in these markets. The Brazilian Government would have to devote a significant amount of resources for this labor-intensive project. Additionally, no criteria have been established for how the data will be processed and handled administratively.
Of even more concern is the proprietary nature of the data requested. Unpublished data on a company's prices in foreign markets belongs to the individual company and is highly sensitive, competitive, proprietary information. Companies do not share this information, particularly without provisions to ensure confidentiality. ANVISA has given no assurance of , and provided no mechanism for, preserving confidentiality of each company's data.
Conclusion
The medical technology industry strongly opposes ANVISA's proposed regulation because implementation of this regulation would impede patient access to innovative medical technology and distort the Brazilian market for these products.
At the same time, the medical technology industry understands that governments and patients are concerned about rising costs. Our industry stands ready to work with the Brazilian Government on appropriate means of addressing these concerns. We would welcome an open and transparent process to provide our views to the relevant authorities.
|