As Rousseff Impeachment Looms Could Her Successor Help Pharma In Brazil?
Executive Summary
Brazil is not an easy place to do business at the moment. Its economy is in deep recession, its political class is mired in a far-reaching corruption scandal and now it looks increasingly likely that President Dilma Rousseff will be impeached for fiddling the figures to make the fiscal deficit look better. "But from the very bottom, the only place to go is up," says Benny Spiewak, from the Brazilian law firm Zancaner Costa, Bastos and Spiewak. He thinks a new leader could do much for pharmaceutical R&D and restore relations with an embattled industry.
Brazil is not an easy place to do business at the moment. Its economy is in deep recession, its political class is mired in a far-reaching corruption scandal and now it looks increasingly likely that President Dilma Rousseff will be impeached for fiddling the figures to make the fiscal deficit look better. "But from the very bottom, the only place to go is up," says Benny Spiewak, from the Brazilian law firm Zancaner Costa, Bastos and Spiewak. He thinks a new leader could do much for pharmaceutical R&D and restore relations with an embattled industry.
Michel Temer is the man set to take over from Rousseff if she is removed from power. He is the country's vice president and also president of the PMBD (the center-right party that supported Rousseff's center-left PT party in more than ten years of government). If Rousseff is impeached, Temer will take charge of the country for six months while Rousseff is suspended and prepares her defense, and if she is eventually ousted, he will take the helm as caretaker president until 2018. Congress has already voted to impeach Rousseff and the Senate is expected to follow next month. "As soon as he takes charge, we will most likely see a shift towards liberalization and a more pro-industry approach," says Spiewak. He believes a government led by Temer would be much more business friendly and could end the "anti-industry and anti-intellectual property rights protection rhetoric" from the current government, which has been so damaging and which has discouraged investment from abroad.
"As soon as Temer takes charge, we will most likely see a shift towards liberalization and a more pro-industry approach."
Spiewak highlights "A Bridge To The Future", a 12-point political program on how Brazil should be run, which Temer and his party launched last year in a break with government policy. According to Spiewak, this program spells good news for the pharmaceutical industry. In particular, it talks about making government more efficient, cutting bureaucracy and strengthening R&D in Brazil. "This is music to the ears of the research community, especially the pharmaceutical industry," says Spiewak. It is impossible to know what, if anything, Temer might manage in just two years, if indeed he remains as caretaker president. However, this year a new law has been passed to encourage bioprospecting and open Brazil's biodiversity to researchers for potential commercialization. This already marks a big shift in thinking already as until very recently the idea of bioprospecting was frowned upon. However, the decree, which accompanies the law outlining the nuts and bolts of the regulations, has not yet been issued. Spiewak thinks that business might get better a deal under Temer's leadership.
Cutting red tape in other areas could do a lot for the pharmaceutical industry. It currently takes up to three years to get a drug approved and the government could do a lot to slash the timeline and align Brazil with international standards. He also says that in a bid to drive efficiency, Temer could look to encourage greater regulatory harmonization between Brazilian regulators – like the medicines regulator ANVISA – and international ones, like the US FDA or the EMA. "Why not anticipate a time when the FDA, EMA and ANVISA sit in a room and discuss harmonised business? … Its unconscionable today, maybe it won't be in a year from now."
Spiewak is optimistic that a new leader could start to turn Brazil around; he points to Argentina where a more pro-industry president, Mauricio Macri, has taken charge. "There is a new atmosphere, there is excitement, there are investors coming. This is what Brazil needs."
Although it looks likely that Rousseff will be impeached, this is not inevitable. She could yet find the support she needs to ward off proceedings. Even if she is eventually removed from office, Operation Car Wash (Lava Jato) which is investigating accusations of corruption and money laundering could also still be damaging for Temer's PMBD party.