by Joaquim Augusto Melo de Queiroz
The changes introduced by Law 14,133/2021 will have significant impacts on the dynamics of public tenders and contracts in various industrial sectors. Although it is still too early to determine the exact extent of these changes in each productive segment, it is possible to discern their most significant effects in some specific branches of industry. The pharmaceutical sector is one of them.
The particularities of the pharmaceutical segment’s activities, and the unique nature of the contracts these companies enter into with the Public Administration, will guide the analysis of these new rules. This article, however, will not attempt to exhaust the full range of changes that the New Public Procurement and Administrative Contracts Law will bring to this sector — not least because some of them will only become apparent as studies on the new law mature and practical experience from its application accumulates. It will, however, examine the most pressing changes and some specific points likely to give rise to further discussion.
To systematize the analysis undertaken here, the observations will be presented in objective topics, correlating some of the law’s main innovations with their effects on the pharmaceutical segment.
- Principle of planning
The principle of planning (art. 5 of Law 14,133/2021) is based on the need for the Administration to take the most appropriate measures to meet its needs, anticipating different scenarios and possible setbacks in order to guide the most appropriate choice. This principle had no equivalent in Law 8,666/1993. Its relevance to the pharmaceutical sector stems from its relationship with the stages of the tender procedure and contract performance. The principle is embodied in various measures and instruments used throughout the tender, from its internal or preparatory phase.
To begin with, the preparation of the Annual Procurement Plan, for example, is aligned with organic planning of the estimated quantity of medicines needed to ensure continuous supply throughout the year. The Preliminary Technical Study, aimed at defining the solution best suited to the Administration’s needs, is consistent with defining the model under which the contract will be formalized (non-requirement, waiver, reverse auction – with the possibility of using the auxiliary price registration procedure, etc.). The detailed configuration of the Terms of Reference, which allows the object to be contracted to be precisely defined, will influence which bidders are actually qualified to supply the product. In this regard, with respect to the Terms of Reference, consider the discussions about medicines offered in dosage forms different1 from the one stated in the tender notice, and about the possibility of interchangeability between biosimilar and originator biological medicines2.
From this perspective, the Terms of Reference will have an impact on the exact definition of the medicine sought and of the bidders able to supply it.
- Risk allocation matrix
The risk allocation matrix concerns the possibility (and, in some cases, the obligation) of including a clause expressly defining certain contractual risks and responsibilities. The risk allocation matrix is governed by arts. 22 and 103 of the new law. For the pharmaceutical industry, the relevance of this clause coincides with contracts involving technology transfer (PDPs – Productive Development Partnerships, for example), in which a detailed risk matrix is indispensable. Moreover, in contracts involving large-scale supplies (above BRL 200 million), this clause becomes mandatory (§ 3 of art. 22).
- Competitive dialogue
One of the biggest innovations of Law 14,133/2021. Competitive Dialogue (art. 32) is a new tender modality, inspired by the European model (European Directive). In general terms, it involves dialogue between the Public Administration and previously selected bidders to design a solution that meets the Administration’s needs, when there is uncertainty or indeterminacy as to the best alternative for the objective pursued by the Public Administration.
The possible use of Competitive Dialogue in the pharmaceutical field may range from developing solutions for innovative and urgent treatments whose effectiveness is still scientifically uncertain (R&D), to risk-sharing situations related to innovative therapies, touching on sophisticated pharmacoeconomic issues. Competitive Dialogue may also be used to develop modern models for the legal and financial structure of contracts in the segment. Practical examples of the latter are contracts for technology transfer for the production of inputs, technology orders and contracts for the supply of medicines for the treatment of rare and ultra-rare diseases, which involve intricate financial negotiations. The design of bold and sophisticated financial structures in these cases may find support in the use of Competitive Dialogue.
These impressions on the first set of topics of the New Public Procurement and Administrative Contracts Law relating to the business activities of the pharmaceutical industry obviously do not exhaust the subject. Given the breadth of the changes brought about by Law 14,133/2021, the remaining highly controversial matters will be examined in a second part of this article.
1 Dosage forms are the different physical forms in which medicines may be presented to enable their use by the patient. 2 Biological medicines are obtained from biological fluids or tissues of animal origin.
Biosimilar medicines are medicines that are highly similar to the reference biological medicine. Biosimilars are developed through a comparability procedure with the biological medicine, as provided for in Resolution RDC No. 55/2010. Comparability is intended to show that there are no significant differences in quality, efficacy and safety between the biosimilar and the reference medicine.
Interchangeability, according to the definition provided by Anvisa (National Health Surveillance Agency), consists of “the medical practice of replacing one medicine with another that is expected to achieve the same clinical effect in a given clinical setting and in any patient, on the initiative or with the consent of the prescribing physician”.
Article originally published in the Licitações e Contratos column on Portal da Infra (in Portuguese), on 07.30.2021.
