Sergio Sztajnbok (sergio.sztajnbok@gmail.com) is Compliance Associate Director at Alexion Pharma Brazil.
Natasha Trifun (natasha.trifun@alexion.com) is LATAM Compliance Director at Alexion Pharmaceuticals.
In January 2016, I published an article in Compliance Today about the emergence of the first Brazilian healthcare transparency regulation.[1] The regulation, CREMESP Resolution No. 273/2015, made it mandatory for physicians registered in the State of São Paulo to provide written reports to CREMESP about their engagement as consultants and/or speakers for pharmaceutical, orthotic, prostheses, and other healthcare-related companies, as well as the name of the company. In that article, I questioned the effectiveness of a regulation stipulated by a professional board compared with a law enacted by a legislative body. It was clear to me at the time that Brazil needed effective legislation for healthcare transparency, preferably legislation that required the industry to report on its relationship with healthcare professionals as well. I concluded the article by arguing that only laws enacted by the legislative branch (precisely for their coercive power) could be effective at making the pharmaceutical company and healthcare professional relationship more transparent; however, I believed we had a long way to go before such laws were adopted.
Many things have changed in Brazil since then, and society has become more intolerant of corruption and, consequently, more engaged in fighting it. It was precisely in this setting, namely in the fight against corruption, that the discussion about regulations that require transparency regarding any and all relationship between private enterprises and the public sector, or even exclusive relationships in the private sector (e.g., law 22440/16, issued by the State Department of Health of Minas Gerais—the reason for this article) or public sector (e.g., website Portal da Transparência),[2] was further expanded. It was a pleasant surprise when, less than one year after publishing my article, more specifically on December 21, 2016, the government of the State of Minas Gerais approved the Law 22440, which became the first healthcare transparency law in our country.[3]
Demographics - State of Minas Gerais
Brazil is a country of continental dimensions. Today, there are about 209 million inhabitants distributed among 26 states and the Federal District. Minas Gerais has the second-largest number of inhabitants, about 21 million. With about 53,700 active physicians and an approximate ratio of 2.55 physicians/1000 inhabitants, Minas Gerais has the third-largest number of physicians, making up approximately 11% of active physicians in the country.[4] ,[5]
It also has the second-largest number of medical schools (47), offering 4,815 places per year for first-year medical students, which represents approximately 15% of medical schools and places offered annually in Brazil (322 medical schools and 32,981 places offered annually in the country).[6]
Law 22440/16 and its regulation
On December 21, 2016, the governor of the State of Minas Gerais approved Law 22440/16, making it mandatory for pharmaceutical companies to report potential conflicts of interest in any relationships with healthcare professionals. After this provision, all manufacturers of drugs, orthotics, prostheses, and implants were obliged to report on a public website any and all relationships that constitute potential conflicts of interest, of any nature, with healthcare professionals registered in the state of Minas Gerais. In fact, in Article 1, it is clarified that the obligation for these statements is incurred by industries rather than by healthcare professionals. In the sole paragraph of this Article, the government of Minas Gerais engaged to define its understanding of a relationship that constitutes a potential conflict of interest. It states, (translated):
Article 1 - It is hereby established that manufacturers of drugs, orthotics, prostheses and implants must report their relationships, of any nature, with healthcare professionals that constitute potential conflicts of interest.
Sole paragraph - For the purposes of enforcement of the provisions hereof, a relationship that constitutes a potential conflict of interest is considered as any kind of donation or benefit, made directly or by third parties, such as gifts, tickets, bookings for events, accommodation, funding of stages of research, consulting, lectures, for healthcare professional registered in a state professional board.
Article 2 regulates the periodicity of such statement, namely on an annual basis, and specifies the data that must be reported. It states, (translated):
Article 2 - The industries addressed by Article 1 shall report to the State, annually until the last business day of January, the name of the professional, their professional board registration number, the object of the donation or benefit and its value, through electronic file concerning the data of the prior base year.
Article 3 isfundamental, given the first transparency law at the national level. The Article states it will make the gathered information public. The disclosure of this data will occur through a public website, to be made public so that companies can upload their statements.
Lastly, the law subjects companies that do not comply with the normative instrument to the penalties provided for by Federal Law 8078, dated September 11, 1990 (Consumer Defense Code).[7] Law 22440/16 introduced healthcare transparency discussion in our country. Several clarifications were pending, including which data should be reported, how to report expenses when the healthcare professional receives its fees through a corporate alter ego, the need and legitimacy of reporting personal data (e.g., CPF [individual taxpayer registration number]) in view of the recent publication of the General Personal Data Protection Law (Law 13.709, dated August 14, 2018),[8] among other major questions. Several points were yet to be clarified by the government of Minas Gerais, but perhaps the main pending issue at that date was the creation of the website mentioned in Article 3.
Executive Order 47334/17
With the purpose of regulating Law 22440/16, the Executive Order 47334/17[9] was approved by the governor of the State of Minas Gerais on December 29, 2017. Paragraph 1 highlights which types of industries are covered by Law 22440 and, therefore, must report all direct and indirect expenses with healthcare professionals on the dedicated website of the State Department of Health.
Article 2, in turn, states that the expenses to be reported encompass healthcare professionals’ family members and include both individuals and legal entities. Finally, it rules that all information relative to a certain base year must be reported until the last business day of January of the subsequent year, on the dedicated platform created for this purpose.
Resolution 6093/18 – State Department of Health
With the purpose of regulating Executive Order 47334/17, 25 days after its publication, the State Department of Health of Minas Gerais issued Resolution 6093/18[10] approving the user’s manual and providing key clarifications.
As to Article 1, it defines the companies’ industrial activities that are covered by the law, namely manufacturers of drugs, immunobiologicals, blood products, enteral and parenteral diets, orthotics and prostheses, equipment, supplies and related products, implants, and medical and hospital materials.
In Article 3, it defines the situations that constitute potential conflicts of interest:
-
Offers of freebies and gifts
-
Transportation and tickets
-
Meals, accommodation, bookings, and events
-
Hiring for lectures and consultancy
-
Funding for scholarships and research stages
-
Permanent and continuing education (CME)
-
Bank transfers and cash payments
-
Clinical guideline funding and opinion articles
-
Funding for professional entities and professional associations
-
Funding for activities of professionals who are part of patient entities and associations, and
-
Any other related activities that may interfere with the performance of healthcare professionals’ activities.
Lastly, Article 4 of this Resolution lists which data must be reported annually. It states, (translated):10
Article 4 - The industries addressed by Article 1 of this Resolution shall inform, via digital form available on the electronic website of the State Department of Health of Minas Gerais, annually until the last business day of January, the following information regarding the data from the prior base year.
Name or company name of the beneficiary;
Professional Board registration number of the beneficiary;
CPF [Individual Taxpayer Registration] or CNPJ [National Directory of Legal Entities] registration number of the beneficiary;
Company name and trading name of the donor;
CNPJ registration number of the donor;
Address of the donor;
Object of the donation or benefit;
Value of the object or benefit;
Date of the donation or benefit; and
Specification of the donation or benefit.
Paragraph 1 - Industries must report potential conflicts of interests, as well as their absence.
Discussion
My previous Compliance Today article highlighted the fact that a regulation established by a professional board would not be effective in prompting the disclosure of information that could potentially illustrate conflicts of interest between the industry and healthcare professionals. That article concluded that, in order to have effective transparency in Brazil, it would be necessary to enact laws that would require companies, rather than professionals, to disclose their relationships and transfers of value to healthcare professionals. Less than one year after the article publication, Minas Gerais followed this path with the publication of Law 22440/16.
The State Department of Health of Minas Gerais made a template spreadsheet available so that covered companies can use it to input the necessary data (in compliance with Article 4 of Resolution 6093/18)[11] and upload it to the website. Companies must fill in the following data into the spreadsheet to be in compliance with the new law:
-
Beneficiary´s name
-
Document type (CPF or CNPJ)
-
Number (the number exactly as described in the document)
-
Class type (whether the professional is registered at a federal medicine board, federal nursing board, federal nutrition board, etc.)
-
Professional registration number, as described
-
Object (if for transportation and tickets, meals, accommodations, fee-for-service, etc.)
-
Date (date of the event that warranted the value transfer)
-
Value (the exact value)
-
Observations (open field for detailing, if applicable)
Two problems arise from the data the Minas Gerais State Department of Health is requiring. The first one is the requirement that covered companies report the CPF (individual tax number), or CNPJ (corporate tax number) belonging to the healthcare professional. This is private information that could run afoul of the new Personal Data protection law that was enacted in Brazil, at the national level, in 2018. Although the Personal Data Protection law, Law 13709/18 will not be in force for 18 months (February 15, 2020), it clearly states that companies can only disclose the minimum personal data that is crucial for achieving a specific purpose. Since the purpose of the transparency reporting to Minas Gerais is fostering transparency in healthcare professionals’ interactions with the pharmaceutical industry, one could argue that the healthcare professionals name and professional registration number is sufficient for this purpose, such that the disclosure of a CPF or CNPJ number is not justified. Even so, companies could face lawsuits from professionals for disclosing even this minimum of information.
On the flipside, if companies do not disclose the required information, they may be punished as set forth by Article 4 of Law No. 22440. It will be hard for companies to reconcile their obligations to protect third-party data with their reporting requirements. One potential solution is to require healthcare professionals to sign consent forms permitting disclosure as part of the contracting process, but it is hard to implement retroactively for transfers that already took place.
Another issue is that this is a state law that is only applicable to professionals who perform activities in the state of Minas Gerais. This means that companies only have the obligation to report potential conflicts of interest relative to professionals who are professionally registered and active in the State of Minas Gerais. This only touches 11% of physicians who are active in Brazil. A current concern among those in the industry is that if all 27 Brazilian states create similar laws, companies will have to submit at least 27 different reports per year, more if any given state requires reports more than once a year. It is clear that this kind of reporting requirement should be a national and federal requirement that applies equally to interactions with all active healthcare professionals in the country.
Conclusion
Brazil has come far since the publication of my first Compliance Today article in January 2016. In a short period of time, one state has already taken the lead by enacting a transparency law that will make industry spending with healthcare professionals public. Brazil is now on the path to becoming a country in favor of transparency. We must wait and hope that the interpretation of the transparency law does not require companies to comply at the expense of the new privacy law (Law 13709/18). We must also hope that the obligations to report conflicts of interest in Minas Gerais eventually extend to a national requirement.
Takeaways
-
In 2015, the Regional Council of Medicine of the State of São Paulo (CREMESP) released a standard that seeks to make more transparent the relationship between physicians and pharmaceutical industries, but it was practically ineffective.
-
In 2016, the government of the state of Minas Gerais enacted the first Brazilian law that aims at making the relationship between healthcare professionals and pharmaceutical industries more transparent.
-
This law enforces the requirement that industries must report, on a public website, any and all relationships with healthcare professionals that may constitute potential conflicts of interest.
-
Despite having coercive power, this is a state law. As such, only the interactions with professionals registered in the state of Minas Gerais must be reported, covering only 11% of Brazilian physicians.
-
In case other Brazilian states enact similar laws, pharmaceutical companies will be faced with the onerous reporting requirements for multiple states. For this reason, a federal law with national application is advisable.
