Cablegate: Brazilian Regulatory Agency Contemplates Increasing

VZCZCXRO2068
RR RUEHRG
DE RUEHBR #2589 3452033
ZNR UUUUU ZZH
R 112033Z DEC 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 7634
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 3545
RUEHRG/AMCONSUL RECIFE 6013
RUEHSO/AMCONSUL SAO PAULO 8853
RUEHBU/AMEMBASSY BUENOS AIRES 4477
RUEHAC/AMEMBASSY ASUNCION 5844
RUEHMN/AMEMBASSY MONTEVIDEO 6652
RUCPDOC/USDOC WASHDC

UNCLAS BRASILIA 002589

SIPDIS

SENSITIVE
SIPDIS

STATE PASS USTR:SCRONIN/MSULLIVAN
USDOC FOR 3134/USFCS/OIO/WH/SHUPKA
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
FOR EB/TPP/BTA and WHA

E.O. 12958: N/A
TAGS: ETRD ECON BR
SUBJECT: Brazilian Regulatory Agency Contemplates Increasing
Barriers to Imported Medical Devices

1. (SBU) Summary. ANVISA, Brazil's FDA-equivalent, has published
new regulations which require importers of medical devices to
provide the agency with detailed foreign economic pricing data,
along with it product registration or re-registration dossier, as a
condition for market access. Companies will have to comply with
this new requirement as of December 13. At the urging of U.S.
exporters, Embassy officers have weighed in with ANVISA in an
attempt to delay or modify this requirement - but to no avail.
Given the inherent difficulties in providing such a complex package
of data, we worry that this new regulation will hinder U.S. exports
of medical devices to Brazil. According to USDOC statistics, in
2005 U.S. medical device and diagnostic manufacturers exported over
US$ 400 million in products to Brazil. End Summary.

2. (SBU) On December 22, 2005 ANVISA first proposed a new
technical regulation requiring the provision of economic (i.e.,
pricing) information when importers apply to register or reregister
medical devices in Brazil. (Once a product is registered, it may
remain on the market for five years.) During the public comment
process, U.S. and Brazilian companies objected to the new
regulation. Five Brazilian industry associations voiced their
concerns to both ANVISA and the Ministry of Health.
Notwithstanding their pleas, ANVISA has moved forward to finalize
the decree. As of December 13, 2006, the regulation becomes
effective and medical and diagnostic companies will be required to
provide: 1) prices in ten other countries (Australia, Canada,
Spain, USA, France, Germany, UK, Italy, Japan, and Portugal), 2) the
potential number of patients that will use the product, 3) the
contemplated price in Brazil, 4) the factory price and Brazilian
distribution margins, 5) expected sales and publicity expenses, and
6) a list of substitute products, along with their prices.

3. (SBU) U.S. exporters view these requirements as impractical.
Specifically, they note that: a) some of the requested data may not
be available, b) even if it is, anti-trust considerations might
prevent them from providing foreign prices, c) given differing
national cost structures, foreign prices are not a good indicator,
d) ANVISA has provided them with no assurances of data
confidentiality, and e) ultimately this regulation could impede

SIPDIS
patient access to innovative medical technology.

4. (SBU) Comment. Concerned about the soaring cost of medical
care, the Brazilians likely believe that they will be able to
jawbone importers into lowering prices for their products if the GOB
has foreign reference prices in hand. Indeed, we've seen this type
of behavior before. In 2005, the Ministry of Health used the threat
of compulsory licensing to get two U.S. manufacturers to reduce
their prices on key imported anti-aids pharmaceuticals.
(Negotiations with a third U.S. pharmaceutical maker are still
ongoing.) To make our case, Embassy plans to discreetly approach
health sector policymakers in an effort to change some minds. Given
Brazilian sensitivities to the thought of "foreign interference" a
high-profile lobbying campaign would very likely prove ineffective.
Accordingly, Embassy believes that a more low-key approach might
yield greater results.

WILLIAMSON

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