Medical device manufacturers and pharmaceutical providers, alike, have discovered a wealth of options in Latin America. Since the late 1990s, the rapidly growing market has facilitated new regulations. As industry standards evolve, countries have developed increasingly stringent standards. The trends continue, and the Latin American regulatory environment continues to enforce requirements on both a country and region-specific basis.
Latin American Pharmaceutical Track-and-Trace Systems
Both track-and-trace and serialization methods propose secure regulation as Latin America’s pharmaceutical market grows. 2013’s federal regulator, ANVISA, published a guidance compliance form revealing Brazil’s track-and-trace pharmaceutical supply chain system, stated to impact Latin America in 2016.
Modern pharmaceutical manufacturers are required to implement and adapt preexisting production equipment, monitoring the productive chain’s every step. Likely, safety and transparency will be heightened. However, such regulatory changes may pose difficulties to new and expanding companies. The following sections outline the best modern practices to promote a cohesive global pharmaceutical compliance program in Latin America.
Practice One: Understand Compliance Needs
As global life science companies expand, maintaining compliance standards has required several new, innovative choices. Global Compliance News has considered that “many hospitals, laboratories, and medical schools are state-owned or state-controlled,” are one of compliance’s biggest hurdles in terms of anti-bribery laws. Local legislation considers healthcare professionals engaging entities as public employees, creating rough waters for companies determining risk environments.
Modern Latin American companies have implemented controls to assist future processes, determining whether HCPs interacted with maintain government official status. Those with government official status may, in fact, present higher anti-corruption compliance risks. Increased risks, likewise, increase industry control factors.
Practice Two: Know Sponsorship Boundaries
Beneath the FCPA and local country laws, sponsored doctors may attend medial conferences. As Latin America’s pharmaceutical industry evolves, however, expanding entities should take care to avoid bribery risks. Violations may occur when a health care professional isn’t fluent in the program’s language. Similarly, health care professionals traveling to conference destinations should take care to attend on-location conferences.
Pharmaceutical controls should constantly maintain documentation pertaining to conferences, sponsorships, on-site monitoring implementations and program outlines.
Practice Three: Understand the Recipient Acknowledgement Process
New legislation shifts the current compliance environment, too. The Manifestação do Destinatário, reflected through Invoiceware International, will be adopted through several Brazil-based legislative changes. Both Santa Catarina and Rio Grande del Sul have announced mandatory status of business practices for Invoices. Understanding this process is vital, as it affects a business’s account payable processes and inbound logistics processes.
The Manifestação do Destinatário, The Recipient Acknowledgement process, allows an NF-e recipient to acknowledge their own commercial participation in any business transactions. Confirmation is reached through information provided in the Issuer’s tax statements. The processes four events are as follows:
- Operation Confirmation
- Emission Acknowledgement
- Operation Registration Unfulfilled
- Operation Declined or Ignored
Upon registering for an event, each recipient’s invoice is registered, and transactions are acknowledged as legal and correct at a later date. Brazil, leader in compliance regulations, will require decision makers to evaluate decisions. Addressing inbound Recipient Acknowledgement Processes will be critical for oil, gas and pharmaceutical industries.
Practice Four: Plan for Future Growth
The pharmaceutical climate, in particular, will experience substantial growth. Nutricosmetics manufacturers will experience a Compound Annual Growth Rate of approximately 11.5 percent between 2014 and 2020, states Healthcare Packaging. The Brazilian pharmaceutical market is, currently, the UK’s favorite regional market. Its market size and domestic demand for high-tech products is positively affected by the country’s private healthcare sectors and increased compliance standards.
Among growing pharmaceutical trends, the expanding generics market is highly impactful. In 2015, both branded and unbranded generics will experience intensive growth over non-protected and patent-protected branded drugs. Within Latin American regions, reflects IHS, pharmaceutical sales are expanding quickly in the following areas:
- High cost medicines
- Rare diseases
Demand for generic pharmaceuticals has shifted to the middle class, urging increased access in lieu of recent regulatory changes. Biopharmaceutical producers will experience new opportunities as the first biotech drugs experience ended patents, granting room for new entrants.
Practice Five: Boost Internal Communication Efforts
As technical requirement response deadlines are extended, and as Brazilian medical device testing laws become increasingly harmonized to international standards, so, too will Brazil’s clinical study and activity appearances increase. More than ever, internal communications are important.
Within the company’s regional branches themselves, background checks will soon become a vital communication technique. Identifying other business interests and principals will boost a company’s internal connectivity. Similarly, understanding each worker’s litigation involvement, media attention or financial struggles will increase cohesiveness.
Practice Six: Beware Impacted Third Party Transactions
Third party transactions, depending upon location, will be affected by increased financial transaction monitoring, too. As the medical industry increases controls, the Informal Value Transfer’s services will become increasingly important. Of course, strict currency controls have always been prevalent in Latin American regions. However, FCPA payments may be disguised as commissions.
As the industry evolves, vulnerability can, and will, occur. Internal relationships and connections should be preserved above all, and each individual and entity involved with transactions, internal decisions and company planning should maintain total visibility.
For more information on how you and your teams can effectively build and enhance compliance programs within Latin America, join us at CBI's Latin American Compliance Congress for Life Sciences taking place September 29-30, 2015 in Miami, FL.