Brazil | New penalties for violation of drug market regulations

The CMED (“Câmara de Regulação do Mercado de Medicamentos”), approved, on April 16th 2018, a resolution establishing the administrative proceeding for the assessment of violations to drug market regulations and the application of penalties (“Resolution CMED/PR nº 2”). Such resolution will be applied to any natural or legal person acting in the drug market – including importers, hospitals, clinics and associations of entities or people. It establishes two types of penalties: “correction of unlawful practices” and fines. They can be jointly imposed, and do not prevent additional civil and criminal sanctions from being applied.

When a violation complaint is received (or when an unlawful practice is directly verified), CMED’s Executive Secretary will prepare a summary of the practice regarded as unlawful and will send it to the investigated party. If, prior to such event, the investigated party repairs the damages it caused, the administrative proceeding will be promptly terminated. If reparation is made after the notification is received, but before an administrative decision is rendered, the investigated party will receive a different benefit: should a fine be applied, it will be equivalent to half of the illegal benefit that the investigated party had.

The CMED also has powers to, before a proceeding is initiated, or until it is concluded, enter into a negotiated settlement (“Compromisso de Ajustamento de Conduta”) with the investigated parties. Such settlement may be requested by a party or proposed by CMED; when concluded, it will cause the suspension of preliminary investigations or administrative proceedings to which it makes reference. Breaching the settlement, however, will not only cause such investigations and proceedings to be resumed, but will also lead to additional penalties and prevent the breaching party from executing a new settlement with CMED for 2 (two) years.

SOURCE: Veirano Advocados Newsletter October 2018