Brazilian Pharmaceutical Patents: The End of ANVISA'S Controversial Prior Consent

ANVISA’S prior consent became an issue when such requirement was incorporated into the Brazilian IP Law in 2001, causing disagreements between ANVISA and the Brazilian PTO, primarily over ANVISA's power to reject a patent application, which it retained until 2017. As a result, for over fifteen years, it was common practice to receive a double patentability requirement analysis: one from the Brazilian PTO, and another from ANVISA, creating divergent opinions between these institutions, which resulted in legal uncertainty for pharmaceutical applicants. During this period of time, the main controversy was that ANVISA issued patentability and formal findings during the examination process of patent applications, occasionally differing from those previously issued by the Brazilian PTO. This resulted in ANVISA refusing applications that were previously accepted by the Brazilian PTO. None of ANVISA’s denials were based on concerns about public health, which meant they were based on formality grounds, which was out of scope of the agency’s powers.

Similarly to various developing countries, Brazil did not allow pharmaceutical products to be patented before 1994. The objective of this restriction was to strengthen the national pharmaceutical industry by reducing imports, diminishing international expertise. However, this situation changed when Brazil entered the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which stated that pharmaceutical patents needed to be granted to applicants from countries that were members of TRIPS. As a result, the current Brazilian IP Law, which was issued in 1996 to comply with this commitment, was largely enacted to align the Brazilian Intellectual Property framework with the TRIPS Agreement. However, due to the lack of research funding, the national pharmaceutical industry did not develop as expected by the Brazilian government. Therefore, when the new Brazilian IP Law came into force, the Brazilian pharmaceutical industry was unable to compete with foreign laboratories, further complicating the implementation of the generic drugs health policy. Nevertheless, trying to strike a balance between pharmaceutical Intellectual Property rights and access to medications, in 2001 the Brazilian government decided to incline towards a position in favor of public health. As such, the Brazilian government adopted prior consent as part of its commitment to promoting a public health agenda, and therefore, Brazil’s Intellectual Property legislation changed as part of the country's ongoing efforts to address its newly self-imposed responsibility to protect pharmaceutical Intellectual Property rights. As a consequence of the above-referenced change in regime, Law No. 10,196 was issued on February 14, 2001, adding Article 229-C to the Brazilian IP Law. This article stated that any pharmaceutical patent application needed to receive ANVISA's consent before being allowed and granted:

“Article 229-C - The grant of patents for pharmaceutical products and processes will depend on prior consent from the National Agency for Sanitary Surveillance [ANVISA].”

Although the drafting of the above referenced provision seemed to be concise, article 229-C was imprecise as it did not specify how to obtain "prior consent". As well, the article didn’t mention whether ANVISA was authorized to analyze patentability requirements. Due to the article’s lack of clarity, and even though ANVISA was founded with the goal of "promoting public health protection through sanitary control of the production and commercialization of products and services", the agency started getting involved with patentability requirements, which was out of the agency’s scope. As a result, many legislative reviews were conducted throughout the years in an attempt to define ANVISA's function during the prior consent stage. After almost 10 years, the first amendment was finally enacted. ANVISA adopted a procedure for examining applications for prior consent through Resolution-RDC 45/2008 (dated June 23, 2008) which, instead of targeting public health issues, stated that the agency would investigate the patentability legal requirements and issue office actions requiring applicants to submit documents, clarifications, and amendments. As expected, such resolution sparked debate, escalating the polarization between supporters and opponents of the prior consent rule. This resulted in the Attorney General's Office intervention, which issued Opinion No. 337 on July 1, 2011, ratifying that ANVISA needed to limit its evaluation of patent applications to public health for prior consent purposes. ANVISA made changes mainly to comply with the Attorney General's ruling and issued Resolution RDC21/2013, modifying the pharmaceutical patent examination process and revoking Resolution RDC45/2008. The above action from ANVISA, established a new workflow for pharmaceutical patent applications, and ANVISA could deny prior consent only if the patent application was seeking protection of an invention prohibited in Brazil or that posed a risk to public health. Notwithstanding the Attorney General's Office advice, ANVISA continued denying prior consent for pharmaceutical patents that were relevant to government policies. After continued discussions regarding each agency’s competence in the process, they finally reached an agreement in 2017 through Joint Ordinance No. 1/2017, setting forth the competence and attributions of each institution. Such joint ordinance stated that ANVISA's competence in the process was to analyze whether the subject matter of a patent application was contrary or represented a risk to public health and the Brazilian PTO's competence was to analyze patentability requirements of the subject matter. This ordinance stated that if a product or process was found to pose a "health risk," ANVISA would deny prior consent and would return the application to the Brazilian PTO for further prosecution. At this point, the Brazilian PTO would issue a formal rejection of the application. In addition, a new approach was implemented to examine patent applications claiming pharmaceutical products and processes of public interest under the Brazilian Government's drug policies. According to the text of the ordinance, ANVISA would examine such applications and prepare a "technical opinion" for the Brazilian PTO, which would have the authority to grant or reject the patent application. This ordinance clarified that ANVISA did not have the authority to reject a patent, and its opinion was only a complement to the Brazilian’s PTO technical examination. In November 2020, ANVISA published four guidelines for the evaluation of prior consent of pharmaceutical patent applications. The purpose of such guidelines was to provide a consistent and transparent procedure regarding ANVISA's scope of action:

i. identification of patent applications for pharmaceutical products and processes under prior consent; ii. health risk analysis in patent applications for pharmaceutical products and processes under prior consent; iii. identification and analysis of patent applications for pharmaceutical products and processes subject to prior consent and subject to the offer of subsidies to the Brazilian PTO patentability examination, and iv. patentability examination in the prior consent of patent applications for pharmaceutical products and processes.

Provisional Measure No. 1,040, dated March 29, 2021 (PM No. 1,040/2021), proposed deleting art. 229-C of the IP Law. This provisional measure outlined legislative proposals in a variety of areas to improve Brazil's business environment and assist the country in improving its ranking in the World Bank's "Doing Business" index, including facilitating international trade. It was mainly argued that this provision imposed bureaucracy in the process of assessing patents in the pharmaceutical field. Supporters suggested that by removing art. 229-C, the connection between the Brazilian PTO and ANVISA would be reconciled, saving up to two years in the process of assessing such patents. Finally, Provisional Measure 1,040/2021, which also aimed to establish a new legal framework for doing business in Brazil, was approved on August 27, 2021, culminating in Law 14,195/21, which came into force on August 27, 2021. From August 27, 2021, pharmaceutical patent applications are no longer subject to ANVISA´s prior consent, bringing, more legal certainty and efficiency in the prosecution of pharmaceutical patent applications in Brazil. It is expected that this new Law will bring a substantial impact on the prosecution of patent applications in Brazil, as they will no longer be forwarded to ANVISA, minimizing substantive examination processes and potentially reducing the average time to receive a final decision on patentability.

Brazil is Latin America's largest pharmaceutical market, ranking seventh in pharmaceutical revenue among the world's 20 major economies, and it’s projected to become the 5th by 2023. According to national market figures, the pharmaceutical sector in Brazil produced R$ 66.07 (US$12.12) billion in sales between August 2020 and July 2021, a 14.69% increase from the previous year. There is no doubt that Brazil has great potential for international pharmaceutical companies, as market growth for technological drugs is increasing due to the high number of chronic diseases in Brazil, which will continue creating high demand for these products. Despite this potential, the provisions of Article 229-C, which required ANVISA's prior consent, resulted in a battle between ANVISA and the Brazilian PTO which created legal uncertainty and damaged growth. After more than two decades of controversies, pharmaceutical patent applications in Brazil are no longer subject to ANVISA prior consent, offering additional legal certainty to the prosecution of these patent applications and potentially creating a more efficient patent granting procedure. It cannot be overstated that this was one of the most sought decisions regarding patent prosecution in Brazil and it came at the forefront of actions taken by the Brazilian PTO to improve the protection of Intellectual Property rights in the country while stimulating the Brazilian economy through innovation. As a result of these recent developments, the Brazilian PTO has risen from 41st place in 2018 to 6th place in 2021, according to the fifth edition of WTR's IP Office Innovation Ranking. It is expected that this measure, which is consistent with the Brazilian PTO's plans to reduce the examination backlog, will benefit applicants even more and encourage new patent application filings in Brazil.