First Impressions Of The New Statute Governing PDPs: Confusing Provisions And Risk Of Reduced Competition

On June 21, 2026, Statute #15,471 was published, resulting from Bill #2,583/20. The new statute established the National Health Strategy for the Health Economic-Industrial Complex (ENSCEIS in the Portuguese acronym). The term “established” is not technically accurate, since, in substance, the strategy had already been created in 2023 by Decree #11,715, which in turn merely consolidated pre-existing programs, such as the Productive Development Partnerships (PDPs) dating back to 2008. Thus, ENSCEIS incorporates elements of Decree #11,715’s strategy: the use of SUS’ (Brazil’s Public Healthcare System) purchasing power to foster its instruments (Article 3, IX), the instruments themselves (the PDPs, the Local Development and Innovation Program (PDIL), and Technology Procurement Contracts in the Healthcare Sector (Etecs)) (Article 7), and the single source mechanism for contracting without a competitive bidding process (Article 25). In practice, what the new Statute did was to give a statutory basis to a program that had its support only in regulations. With this, in theory, the program would gain greater institutional stability, enhancing its ability to achieve its intended goals. A preliminary reading of the new Statute, however, raises concerns about its capacity to serve as the proper statutory basis: some provisions lacked clarity, important aspects of the policy were not incorporated, and, most importantly, it introduces changes that could unnecessarily prolong exclusivity periods, potentially restricting competition..

The first and most concerning change is the creation of the “EES – Strategic Health Company,” defined as a legal entity of public or private nature, accredited by the Executive Branch based on predefined criteria. To be considered an EES, it is necessary to have in the country “an industrial facility for the manufacture of Strategic Health Products (PES),” “a history of productive activity and research, development and innovation,” and “the capacity to ensure the continuity and expansion of production in the country” (Article 5). The new Statute, however, did not adequately regulate the role EES. It is unclear, for example, whether PDPs must necessarily involve an EES. Some believe so, but if that was the intention, there should be a provision for PDPs similar to the one for PDILs, stating that these “must necessarily involve 1 (one) ICT or 1 (one) public health producer, in partnership with 1 EES” (Article 18).

One context in which the role of the EES would make sense is a PDP established without the participation of a Public Institution (IP), where the EES would assume the role of Technology Receiving Entity (ERT). This scenario became possible under ENSCEIS. However, for it to be better reflected in the new Statute, the definition of ERT would need to be improved, as it currently does not mention the EES, referring only to IP and EP – Private Entity.

Regarding the EES, what is clear from the new Statute is its role as a necessary status for enjoying the benefits provided for in the Statute. One of the benefits is the directive for regulations to ensure that EESs have “simplified rules” (Article 3, Paragraph 2), priority treatment in the “processing of their regulatory processes” (Article 33, I), and “favorable financial conditions” in financing from the Brazilian development bank (Article 34). A nice package, but composed of benefits that are already widely used. Statute #15,471, however, puts the cherry on top: the possibility of holding bidding processes exclusively for EES for the acquisition of their products (Article 26). These benefits are granted “with a view to the international integration” of the EES (Article 3, VIII). The Statute does not provide many details, but it is impossible not to recall the previous highly criticized national champions policy, projecting them internationally.

It is obviously commendable to grant benefits such as priority regulatory treatment and better financing conditions, seeking to stimulate the manufacturing of products in the country. But completely eliminating competition by creating restrictions on competition  through bidding reserved exclusively for EES might be excessive.

This is especially concerning because the new Statute does not make it clear under what circumstances this reserved bidding process would be carried out. For instance, whether it would be for the acquisition of a product resulting from a PDIL (generally aimed at developing innovative solutions that do not exist locally) or for the acquisition of a product that is the subject of a PDP, which, over the years, has already been supplied by the EES exclusively or under a market reserve. Since the new Statute only mentions products “produced or developed by EES” (Article 26), it opens the door to both scenarios. However, in the PDP example, the exclusivity or market reserve regime would be extended which, during the PDP, was justified as the counterpart for the transfer of technology, but which, after its conclusion, becomes unjustified, with an indefinite duration and potentially increasing the cost of products to be acquired by the SUS.

Another provision that raises doubts is Article 27, which allows the use of a preference margin in bids that “involve national PES that meet Brazilian technical standards” (Article 27). Its wording does not make it clear whether the preference margin can be used in bidding processes to benefit domestic products competing with imported products (in the exact terms of Article 26 of the Government Procurement Act) or whether it can be used to provide an additional incentive restricted to bidding processes in which only domestic products compete, for example, depending on the percentage of domestic content, in line with Article 32.

Some specific provisions regarding PDPs are also noteworthy. The first is Article 10, which stipulates that the consideration for PDP contracts will be the acquisition of the product “in the volumes and quantities previously approved, according to the agreed demand plan.” The current dynamics of PDPs are such that the quantities are a mere estimate (Article 8, Paragraph 7, of the annex to GM/MS’s Ordinance #4,472/24). Article 10 does not seem to reflect this dynamic, since its literal interpretation is that volumes and quantities are objective parameters. Therefore, this could represent a limitation on the MoH’s (Ministry of Health) ability to adjust quantities, as any adjustments would be restricted by the rule in Article 125 of the Government Procurement Act, which allows variations of only up to 25% of the initial updated contract value.

Another provision is found in Article 14, Paragraph 2, which stipulates that if the results obtained within a PDP differ from those desired “due to technological risk,” no compensation will be due by the contracted parties. The notion of technological risk must be constructed with attention to the specific context of PDPs, which is different from the innovation context of PDILs, where there is naturally more risk. PDP contracts aim to transfer technology of products that already exist and have been commercially marketed for years: technology that, at least in theory, should be mastered by the party contracted to transfer it.

Still within the context of PDPs, Article 15 reinforces that the Executive Branch (specifically the Ministry of Health - MoH) will not be held responsible for any acts of infringement of intellectual property rights. More than just protecting the MoH, the provision seems to be a message to the parties involved in a PDP, urging them to pay attention to intellectual property rights, especially patents. Afterall, it would not be reasonable to interpret the aforementioned provision as creating a shield for the Executive Branch from liability resulting from IP rights violations regardless of the actions it takes.

In conclusion, an initial reading of the Statute suggests that some provisions raise reasonable doubts, indicating that the text could have been better developed, especially given the importance of ENSCEIS. But what is most concerning are the changes, such as the bidding process reserved for EES, which could create barriers to competition by unnecessarily extending exclusivity. In this scenario, the regulation of the new Statute (or the adaptation of the current one) becomes even more important, as it will complement the meaning of its provisions. It is necessary to keep up with developments.

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