Latin American countries have historically treated policies for organising and managing health systems and policies regarding science and technology (S&T) as distinct areas, with limited integration between the two. Health policymakers have been concerned with health services provision, while officials in development ministries and agencies have focused on investments related to the promotion and use of technologies. In Brazil, however, running contrary to this tendency, the two dimensions of public policy have become fused, with the alignment of health policy with measures to promote the scientific and technological development of the pharmaceutical industry. This article examines the process of transformation of health policy in Brazil.
Prior to the 1990s, health and S&T policies in Brazil were unconnected; in fact they were often in conflict and undermined each other. And to the extent that health-related innovation and production were on the public policy agenda, the main focus was on public production of medicines, with little concern for or engagement with the activities of private industry. However, since the mid-2000s the Brazilian Ministry of Health (MoH) has adopted a series of initiatives for the establishment and expansion of the Complexo Industrial da Saúde (Health-Industry Complex, CIS). These initiatives have included, for example, incentives for production and technological development in the biomedical sector, mechanisms to promote technology and knowledge transfers from large multinational pharmaceutical companies to Brazilian companies, and coordination among various ministries and state agencies involved with promoting S&T. The integration between public policies in health, S&T and industry is unprecedented in Brazil.
The array of new S&T and industrial policy initiatives that contribute to the CIS respond directly to the needs of Brazil's health system. The country has one of the world's largest universal public health systems, called the Sistema Único da Saúde (National Health System, SUS).Footnote 1 Coverage includes substantial expenditures on medicines (for example, the high-cost treatment of diseases like cancer, HIV/AIDS and hepatitis) and other health products and services. The demands created by so many obligations in health led to the urgent need for a more vibrant industrial sector, and the CIS, a pioneering step that greatly expands the volume of resources dedicated to health-oriented industrial policies, is envisioned and designed as a package of measures to reform the country's S&T and industrial bases in order to satisfy the great and ever-expanding needs of the SUS.
Not only does the CIS invest in industry for the sake of public health, but it also treats investments in health as a driving force of economic development. In doing so, the logic of the CIS differs from the traditional public health model, which focuses on identifying the most efficient ways of improving ‘health’.Footnote 2 The CIS model views the health sector as involving a wide range of interconnected industries and activities (e.g. pharmaceuticals, diagnostics, healthcare services, medical devices) which jointly, in addition to contributing to the delivery of healthcare, can be the source of broader technological change and economic development. The CIS speaks directly to an emerging global health agenda that calls for enhanced integration of health and industrial objectives, and that also supports local production of pharmaceuticals in low- and middle-income countries.Footnote 3
Our analysis of the CIS builds on a substantial body of research.Footnote 4 Various authors have endeavoured to understand the expansion of Brazil's health-oriented S&T and industrial policies in the 2000s, under the governments of Presidents Luiz Inácio Lula da Silva (Lula) and Dilma Rousseff of the Partido dos Trabalhadores (Workers’ Party, PT), but few have discussed the underlying motivations in the decision to develop strategies in favour of the CIS. One explanation might be the emergence of political movements situated on the Left of the political spectrum and the ‘developmentalist’ orientation of the PT governments of the early 2000s.Footnote 5 Yet explanations that attribute the CIS to the orientation of the incumbent government and the general thrust towards the revitalising industrial policies of the 2000s are problematic from a temporal perspective: the CIS has its roots in the period prior to the Lula government. To be sure, the choices made by the post-2003 PT governments are of major importance, but the process did not start with them. In order to understand the policy options available to the PT governments in the 2000s, it is essential to understand the trajectory of S&T in health over time and how past choices facilitated the initiatives that ultimately produced the CIS.
Emphasis on the executive's ideological orientation also risks overlooking the role of the federal bureaucracy. There are sound reasons to expect the state bureaucracy to matter for the development of the CIS, consistent with studies of industrial development in Brazil that show state actors’ crucial roles in industrial policymaking.Footnote 6 Since many analyses of industrial development in Brazil examine events that occurred during the military regime (1964–85), the experience of the CIS similarly provides an opportunity to explore the role of the bureaucracy in the recent period. Matthew Flynn, one of the few authors to mention the federal bureaucracy's role when examining contemporary health and industrial policies, attributes the emergence of Brazil's industrial policy for medicines for HIV/AIDS to an alliance between the bureaucracy, local industry and civil society.Footnote 7 Flynn, like many other analysts of the CIS, emphasises the role of a group of intellectuals, public health professionals and leftist politicians – collectively referred to as sanitaristas – working within the federal bureaucracy to promote sweeping reforms such as the creation of a national public health system and policies to respond to HIV/AIDS.Footnote 8 The sanitaristas’ role in the federal bureaucracy dates to the military regime, when these actors were invited to join the MoH in order to expand the legitimacy of a government which until then had been impervious to civil society's interests; their role then grew substantially in the 1990s.Footnote 9 Our analysis complements and builds on this research by extending the analysis of the role of public health professionals in the formulation of public policy beyond health per se, examining instead their role in creating a coalition for a broader industrial policy related to health, the CIS.
We argue in this article that a process of institutional change occurred incrementally, over a long period of time. The CIS, launched in 2007 and implemented in the following decade, resulted from gradual changes in S&T and health policies that were initiated soon after the democratic transition of the late 1980s. We identify points of policy ‘layering’ over time, as new initiatives were introduced, and we show that these gradual changes were spearheaded by groups of public health researchers gaining leverage within the federal bureaucracy.Footnote 10 By the mid-2000s, a segment of these researchers, occupying central positions in health policy decision-making, were providing important impetus for the CIS. The initiatives advanced by this group, anchored in the premise that innovation in health technologies was essential and that a positive relationship between the state and private groups was critical for achieving these goals, differ substantially from those in Brazil's previous public health tradition.
Our analysis is rooted in the literature on gradual institutional change.Footnote 11 A fundamental premise of this approach is that institutional change reflects perceptions of the inadequacy of current rules, processes of reinterpretation, and the establishment of new social and political coalitions, all of which can culminate in transformation, but which occur gradually.Footnote 12 This can be thought of as a change-by-layering model, by which institutions undergo modifications via processes of amendment and revision of existing rules. However, in addition to minor alterations occurring over long periods of time, the accrued weight of such small changes can also create moments of opportunity for policymakers to promote more sweeping changes.Footnote 13
Another premise of this literature is the role assigned to social and political actors in processes of institution-building and institutional change. Previously, the literature on institutionalism assigned greater historical weight to structure and design, with political actors’ agency considered important only during moments of institutional rupture or crisis. James Mahoney and Kathleen Thelen, challenging this perspective, present a typology of actors that can drive different types of incremental change. In the case of layering, changes are usually introduced by ‘subversive’ actors, labelled as such because they promote changes within institutions and on the fringes of existing rules, rather than through more obvious mobilisations against the status quo.Footnote 14 Subversive actors introduce their agendas gradually, without breaching existing rules, but by building or promoting minor alterations that accumulate over time and lead to incremental change; they initiate processes of change from the periphery until finding pathways leading to the core. The evolution of the CIS in Brazil illustrates these dynamics.
The remainder of the article is organised in four sections. The following section explores the emergence of a new S&T policy agenda in coordination with national health policies. For decades there was little dialogue between actors in health, industry and S&T in Brazil. Although they dealt with related issues, the management and development of these policies were distinct in practice. Gradually, health policy integrated S&T issues on the federal agenda, which served as the basis for actions in the CIS. The second section discusses the role of a group of scientists as political agents of change. We present the development of their preferences and their specific experiences with technology transfer in a research institution affiliated with the MoH. The third section analyses the alignment of S&T policies, as related to health, with industrial policies. Here, in contrast to the past when health professionals were averse to working with private industry, we now see health professionals embracing an approach to health and industrial policies that includes an important role for private firms. All of these changes illustrate processes of layering, in that we witness the overlaying of new initiatives on existing practices, rather than the deconstruction and replacement of past policies and practices. Finally, in the conclusion, we summarise the article's principal findings and contributions, and make suggestions for further research.
The study is based on data collected from 2012 to 2016, including government documents (legislation, official speeches, documents from ministries and other government agencies) and newspaper articles, as well as on 30 interviews held with key informants representing government, the private sector, academia and civil society groups, selected for their participation in the process and/or their ability to comment on the evolution of S&T and health in Brazil. To improve the validity of the information, we used the following protocols: we rechecked the context and policies before each interview in order to identify possible incoherences and inconsistencies during the interview; we triangulated primary data with other document sources and interviews; and we contacted some informants more than once in order to clarify inconsistencies.
Building an S&T Agenda in Health
In the late 1980s, following the demise of the military regime, Brazil's health system underwent profound reform, with a highly centralised model based on social contributions replaced by a decentralised and universal model. The health reform movement advocating these changes consisted of physicians and intellectuals who sought to expand access to health care and to promote an understanding of health as a social right. S&T were secondary issues on the agenda, overshadowed by more urgent issues such as the expansion of free access to health services and the financial stability of the new universal healthcare system, the SUS.Footnote 15 To the extent that S&T emerged on the agenda, it tended to be limited to state investments in public laboratories and government production of medicines. Research reveals a handful of events and publications on S&T related to health produced by researchers at the Oswaldo Cruz Foundation (Fiocruz), the leading biomedical research institution in Latin America, affiliated with the Brazilian MoH and birthplace of the country's health reform movement.Footnote 16
It is important to take a step back and explain that Brazil experienced different cycles in terms of the interaction between health policy and its industrial base without a formal agenda or clear objectives on what might constitute an S&T policy appropriate for health.Footnote 17 The manufacture of medicines in Brazil dates to the early twentieth century, financed largely by the state for the development of vaccines for the health system, to prevent and combat major endemics. Private pharmaceutical manufacturers had a limited presence, and they were largely ignored by public policy (even in health regulatory policy, which focused on inspecting ports and controlling endemics). After the 1930s, with the emergence of the international pharmaceutical industry, the context in Brazil was marked by the entry and dominance of foreign firms as suppliers of health products (e.g. equipment, medicines). Indeed, in the post-World War II period, academics and public health professionals began to call attention to the ‘de-nationalisation of the pharmaceutical industry’, which, they contended, could pose threats to the country's financial situation and also to public health.Footnote 18 These researchers recommended various measures to build and strengthen the country's production capacities, including initiatives to stimulate local production of medicines by state laboratories and the creation of a state pharmaceutical company.Footnote 19 At this stage, however, public health researchers tended to be hostile towards the private sector, particularly the multinational pharmaceutical companies that dominated the sector, but towards domestic firms as well. To the extent that the health researchers concerned themselves with production, their focus was on state production.
Some steps to strengthen the domestic production of medicines, by both government and private manufacturers, were taken during the military regime. These included, for example, further reforms to intellectual property law to limit patents on pharmaceuticals, the creation of the Central de Medicamentos (Medicines Central Agency, CEME) with the responsibilities of regulating and distributing medicines produced by public laboratories, and an array of tariff and tax incentives to stimulate the local production of drugs by private, Brazilian pharmaceutical firms. Driving these changes was a nationalist group in the Armed Forces that viewed domestic production of medicines as a national security issue,Footnote 20 but subsequent initiatives were typically spread across different government agencies, and their effects were thus limited. As one public health official declared in the early 1980s, ‘there is no Brazilian pharmaceutical industry, but only a pharmaceutical industry in Brazil’.Footnote 21
Brazil's S&T framework with regard to health was built slowly. The democratic transition of the 1980s created opportunities for building a health agenda that was linked to S&T, and some incipient steps were taken in this period, but for the most part policy remained disjointed across these realms. An important event, however, was the first Conferência Nacional de Ciência e Tecnologia em Saúde (National Conference on Science and Technology in Health), organised in 1994 by the MoH, with the support of the Associação Brasileira de Pós-Graduação em Saúde Coletiva (Brazilian Association of Researchers in Public Health, Abrasco). This event focused attention on the relationship between health and S&T policy, and, importantly, created a platform for actions to be taken. In order to give S&T an institutional stake in the MoH, for example, the final report of the Conference recommended the creation of a Secretariat of S&T in Health.Footnote 22 Yet, despite these efforts, little interaction followed between the MoH and other government agencies to promote a broad and cohesive agenda in science, innovation and health; different state actors continuing to work on their own agendas, separately, remained the order of the day. Indeed, the demand for a specialised unit on S&T within the MoH was only partially met with the creation of a department responsible for S&T at the MoH, as we will discuss below. The lack of coordination was so pronounced that in 1996, after a controversial period of negotiation, the Brazilian National Congress not only passed a new intellectual property law which, as required by the World Trade Organization, meant that the country would begin to grant patents to medicines, thereby increasing the price of the original-name branded drugs, but it also enacted a law that guaranteed universal access to AIDS drugs – many of which would be made more expensive precisely because of the new intellectual property law.Footnote 23 In short, significant and impactful decisions were still being made seemingly without in-depth discussions or debates on relationships between various laws and their potential implications and contradictions.Footnote 24
We observe the MoH focusing more explicitly on S&T later in 2000, as demonstrated by the establishment of the Departamento de Ciência e Tecnologia (Department of Science and Technology, DECIT). This change, which we can regard as an instance of ‘layering’, with the addition of new roles to an existing institution, was motivated by public health emergencies that were seen as evidence of the need for action in health-related S&T in the country. First, international agencies like the US National Institutes of Health began to refuse to fund Brazilian researchers, citing failures in the ethical review of multi-centre protocols.Footnote 25 As a result, Brazilian researchers began to demand that the MoH improve the documentation in its calls for health research projects and that it urgently ameliorate the ethical regulation of studies enrolling human subjects in clinical trials. In the absence of changes, Brazil's participation in projects with major implications for world science, like the Genome Project, would be impossible, given the then-current context of insufficient regulation of research ethics. The second event that triggered the creation of the DECIT was an episode of environmental contamination in Rio de Janeiro. The Federal Attorney's office requested a technical report from the MoH on the contamination, and the ministry's report stated that prior studies had been incomplete and inadequate, signalling another shortcoming in health research in Brazil.Footnote 26 The creation of the DECIT is thus an important landmark in the gradual introduction of S&T policies within the MoH, and in an effort at better coordination of such activities.Footnote 27
We also witness the integration of health and industry under the direction of Minister of Health José Serra (1998–2002), with the state production of antiretroviral (ARV) medicines encouraged as a way to meet the demands of the national AIDS programme.Footnote 28 In this period we observe furthermore the revision of institutions and rules for regulation of medicines and other health products, with the creation of an independent regulatory agency (the Agência Nacional de Vigilância Sanitária, ANVISA), and, following that, the requirement that drug manufacturers adapt their manufacturing processes and plants to the new rules. Again, these changes should be regarded as an incipient and incremental integration of health, S&T and manufacturing policies. As important as the efforts to increase local production of ARVs were, for example, they did not as yet form part of a broad discussion on an industrial policy oriented towards the health sector, but rather were limited to responding to health needs in a single therapeutic class.
The next incremental step on the path to building the S&T agenda in health was the change in the leadership of the Banco Nacional de Desenvolvimento Econômico e Social (National Economic and Social Development Bank, BNDES) in 2003, following the election of President Luiz Inácio Lula da Silva. At this point, the pharmaceutical industry began to occupy a more privileged position in discussions of industrial policy, identified as a key sector in the Política Industrial, Tecnológica e de Comércio Exterior (Industrial, Technological, and Foreign Trade Policy, PITCE). The BNDES began to discuss the sector's needs for the first time, as explained by Pedro Palmeira, head of the Health Products Department at BNDES:
[…] when Carlos Lessa took office at BNDES, we began to hear about the health sector as something in which the bank could play some role. The departments began to grow, and in the chemical industries department Lessa demanded a core group of people to focus on the health industry. There wasn't anything at all, no systematic knowledge about the health sector. There was only a group of three people. We had a programme from the previous administration that was to try to develop the generics industry.Footnote 29
Palmeira's remarks illustrate the moment at which the bureaucracies in the health and industrial fields began to move in unison. As a further illustration, a 2003 seminar held jointly by the MoH with the Ministério do Desenvolvimento, Indústria e Comércio (Ministry of Development, Industry and Trade, MDIC) aimed at identifying bottlenecks in the pharmaceutical industry that were problematic for the health sector.Footnote 30 These events were important in that they drew together a segment of public health researchers who were sensitive to the issues of the production of medicines, technological development and industrial policy. The BNDES invited groups of public health researchers to participate in these events, and they prepared situational diagnoses that contributed to the elaboration of the Programa de Apoio ao Desenvolvimento da Cadeia Produtiva Farmacêutica (Programme to Support the Development of the Pharmaceutical Production Chain). This programme, known as ‘Profarma’,Footnote 31 and especially the component of the programme oriented towards ‘innovation’, proved to be a milestone in investment management by the BNDES, which was now moving far beyond a traditional focus on financing manufacturing infrastructure processes. Many of the BNDES loans were to help firms carry out reverse engineering technology, for example by studying the way to synthesise reference products in order to manufacture generics, investments that were regarded as innovation at the time.
In parallel, and still in the early years of the Lula governments, an ‘Innovation Law’ (Lei de Inovação, no. 10.973/2004) was passed in 2004, decisively bringing innovation on to the policy agenda. With some amendments to the original bill submitted in Congress during the Fernando Henrique Cardoso administration (1995–2003), the Innovation Law updated the legal framework to encourage cooperation between S&T institutions and the private sector, besides regulating the use and negotiation of any intellectual property produced through these collaborations. Previously, Brazil had no formal regulation allowing researchers from public universities and research institutes to engage in formal collaboration with private companies. Again, we observe a layer of S&T policies initiated under the previous administration being added to the government agenda under President Lula.
When Lula took office as president of Brazil in 2003, in addition to the reorganisation of the BNDES, the MoH too underwent fundamental restructuring. Various secretariats were created in the ministry (secretariats are the second echelon below the ministry itself, and within secretariats are departments). This reorganisation created various possibilities for what might happen to the DECIT: its total elimination, its retention as a third-echelon department, or its promotion to the status of secretariat. The third of these options would indicate the importance that the ministry was attaching to S&T matters, and it was public health researchers invited to participate in the government's transition team who suggested this option – converting the DECIT into the Secretaria de Ciência e Tecnologia e Insumos Estratégicos (Secretariat of Science, Technology and Strategic Inputs, SCTIE).Footnote 32 The transition thus provided an opportunity for reclaiming a longstanding demand by experts in the area of S&T and health, namely the creation of a secretariat that could better coordinate research activities applied to the health sector and create an S&T policy for the SUS. As discussed, this demand had already been voiced at the Abrasco Conference on Science and Technology in Health in 1994, but it had been only partially met to that point, with a third-echelon department. The creation of the SCTIE helped the MoH take on a strategic role in the conduct of S&T and innovation policy in health, coordinating activities across these realms and doing so in a focused way from a single important division of the ministry. Accordingly, the SCTIE became responsible for, among other things, the procurement of medicines, decisions on the incorporation and evaluation of new technologies by the health system, and the health research agenda itself.
In sum, the agenda for S&T in health was built gradually from the late 1980s through to the early 2000s. S&T and health policies became more integrated in the wake of democratisation, further integrated under the leadership of Minister of Health Serra, and then the agenda was moved to the next level in the 2000s under President Lula. Despite these changes, however, while private industry was targeted by other policy instruments and state agencies, as discussed above, the private sector remained excluded from the MoH's agenda. That next step in integration was yet to occur.
Scientists as Political Agents: Experience with Technology Transfer and Agenda-Building in the CIS
Historically, the bureaucracy of the DECIT, and of the SCTIE that succeeded it, was staffed by public health researchers working in the area of health S&T. One of the leading research clusters in S&T in Brazil was the Oswaldo Cruz Foundation (Fiocruz), a research institution linked to the MoH. And it was a group of researchers from Fiocruz, particularly those affiliated with the research group on ‘Development, Economic Industrial Complex, and Innovation in Health’, now occupying positions in the ministry, who spearheaded initiatives in S&T and health towards what would eventually become the ‘Health-Industry Complex’. In order to understand this reformist group's agenda and proposals, it is important to contextualise Fiocruz's work and, within Fiocruz, the role of this particular research group.
One of Fiocruz's most important missions is the production of inputs (medicines and vaccines) for the federal government's health programmes. Complementing the creation of the secretariat within the MoH and the Profarma programme at BNDES, Fiocruz launched a Four-Year Plan (2005–8) which determined, as a priority, actions for the CIS. In doing so, researchers called attention to the need for greater involvement by Fiocruz in the decisions made at the MoH. The Four-Year Plan also defined strategies to improve the production process for inputs to the SUS.Footnote 33 In this context, Fiocruz's Grupo de Pesquisa sobre Complexo Econômico-Industrial e Inovação em Saúde (Development, Economic Industrial Complex, and Innovation in Health Research Group) launched a project called ‘Innovation in Health’ with the objective of identifying support for the formulation of a multi-sector policy involving production, management and technological development.Footnote 34 The project was coordinated by researchers José Gomes Temporão (later to be minister of health, from 2007 to 2011), Carlos Gadelha, Eduardo Costa and Reinaldo Guimarães (all later to be secretaries of the SCTIE), and Paulo Buss (president of Fiocruz from 2000 to 2008).
The ‘Innovation in Health’ project and the production of inputs at Fiocruz had important consequences for developing an agenda for the CIS in the MoH.Footnote 35 The project's coordinators drew on a conceptual base combining public health with economic development, and expecting strategic use of the state's purchasing power to shape industrial development. Gadelha emphasises the systemic nature of Brazil's approach to industrial policy in this area, marked by the focus on various sectors in the CIS and their relationships to the state and the international context, as well as on service providers (hospitals, outpatient clinics, etc.).Footnote 36 Guimarães highlights the particular relevance of health for generating innovation, since it is one of the world's prime areas of investment in research and development (R&D), in a context in which innovation is a key differential for national competitiveness in a globalised environment.Footnote 37 For this group of researchers, the health sector was a key factor in economic development and innovation – and this group now had privileged access to the corridors of power within the MoH.
With Fiocruz researchers occupying important positions in the upper echelons of the MoH, the role of S&T on the ministry's agenda was consolidated. The II Conferência Nacional de Ciência, Tecnologia e Inovação em Saúde (Second National Conference on Science, Technology and Innovation in Health, July 2004) for example, was followed by the Política Nacional de Gestão de Tecnologias em Saúde (National Policy on S&T in Health), the Agenda Nacional de Prioridades de Pesquisa em Saúde (National Agenda on Research Priorities in Health), the creation of an agency to assess new health technologies, and the creation of a Política Nacional de Gestão de Tecnologias em Saúde (Policy for Technological Management of Health).Footnote 38 The procurement of high-cost medicines was also re-centralised, whereas it had previously been the responsibility of the country's 27 states, a move that was important for improving the efficiency of government purchases of patented products and crucial for increasing the MoH's bargaining power with the suppliers of these products.Footnote 39 All these initiatives had the support of, and were monitored by, the Grupo de Trabalho de Ciência e Tecnologia em Saúde (Working Group on Health, Science and Technology) of Abrasco, the network of public health scholars that had been active since the early 1990s.Footnote 40
Driven by researchers within the SCTIE, the MoH became increasingly concerned about the production of medicines and technology transfer in the 2000s. A critical event that inspired state activism here were the events around Minister Temporão's decision to issue a compulsory licence on the patent of efavirenz (EFV), an important ARV drug that was in high demand by the national AIDS programme. The decision came in 2007, following years of negotiations with the patent-holder (Merck), some of which had yielded price reductions but still left the drug at a price that, because of increased demand, was continuing to place substantial burdens on the health budget. This event underscored weaknesses in the production of medicines and the need to consider new alternatives for the production of ARVs:Footnote 41 the consortium of three companies that stepped up to supply the AIDS programme with EFV experienced difficulties producing the drug, and it was necessary to import a generic version from Indian companies (where there was no patent). MoH officials agree that this situation provided the impetus for advancing initiatives for the industrial development of medicines.Footnote 42 For the first time, the MoH was sponsoring a partnership between private Brazilian pharmaceutical and pharmo-chemical companies and the public laboratory Farmanguinhos with a guarantee of purchase of EFV production.
The involvement of private firms constitutes an important change. Prior to this period, though Brazilian firms had been the subject of some industrial policy measures, as discussed above regarding PITCE and BNDES lending, they were not regarded by health officials as central to the country's health agenda. Yet the conflict over drug patents and the experience of the compulsory licence for EFV triggered a greater dialogue between the MoH and the pharmaceutical companies. In fact, the experience of using the MoH's purchasing power to promote the Brazilian consortium for the local production of efavirenz served as a crucible for subsequent policies for the CIS, as explained by Minister Temporão, who led the process:
The experience with compulsory licensing confirmed a view I already had, that we needed to develop a new path to what I call technological sustainability. In other words, it's impossible to conceive of a system that's intended to be universal, with quality, meeting all the needs and demands of Brazilian society, without addressing the issue of technological sustainability, without reducing Brazil's degree of dependence on technologies in relation to cutting-edge knowledge produced by science, in medicines, vaccines, reagents, diagnostic equipment and treatment.Footnote 43
In conclusion, we have seen that action by a group of researchers from Fiocruz who were working in the SCTIE facilitated the fusing of the health and industrial policy agendas. If this group of researchers interested in the industrial development of health had not been in key positions in the federal bureaucracy, it is unlikely that the health policy agenda would have embraced the private sector and become integrated with industrial policy as it did. The measures taken by the BNDES for the pharmaceutical industry date from the end of the Cardoso administration, with major expansion at the beginning of the Lula's presidency, but both were strikingly dissociated from health policy. It was not until the action by the group of researchers working within the SCTIE that these activities in S&T, innovation and industrial policy were aligned with health policy. This shows the crucial role of these reformist administrators in the process of building the CIS and illustrates the layering process, while the S&T and health institutions were evolving gradually.
Layering in S&T and Health: Public–Private Cooperation for the Development of Medicines
Throughout the remainder of the Lula presidency and continuing during the administration of Rousseff, the fusion of S&T, health and industrial policies became yet more accentuated. Health was treated as an economic development activity, and promoting industrial development in pharmaceuticals was regarded as critical for health. Drawing on the experience with efavirenz, the MoH expanded the consortium model to include the production of strategic medicines for the SUS. Rather than bargaining with international pharmaceutical firms under the threat of issuing compulsory licences, the SCTIE began to engage with these firms and to encourage them to establish partnerships and technology transfer agreements with Brazilian companies, at the same time further aligning health policy measures with the activities of the BNDES and the array of state agencies promoting innovation. This marked an unprecedented moment in Brazil's health policy, with measures to promote S&T for health aligned with industrial policy and, together, the consolidated initiatives targeting public and private actors throughout the pharmaceutical production chain. This section examines these changes.
A number of policy and institutional reforms serve to illustrate the alignment of health and industrial policies in Brazil. Regarding policies per se, the MoH's adoption of a coordinated approach to industrial policy was reflected by the signing in December 2007 of an agreement on cooperation and technical assistance with the BNDES for the development of activities, programmes and studies with a view towards the development of the CIS.Footnote 44 Linked to this, the ‘Mais Saúde’ (‘More Health’) programme was launched by Minister Temporão in December 2007, with a budget of BRL 5.1 billion (U$ 2.6 billion) from 2008 to 2011. Based on the Fiocruz ‘Innovation in Health’ project, the ‘Mais Saúde’ programme aimed to improve the industrial and innovative capabilities of private Brazilian pharmaceutical companies.Footnote 45
Complementing policy measures were institutional reforms within the MoH. The ministry created a Departamento do Complexo Industrial e Inovação em Saúde (Department of the Industrial Complex and Innovation in Health, DECIIS), within the SCTIE, to coordinate the new focus on a wider array of ‘health-related’ areas, such as technological development, production and innovation.Footnote 46 Reflecting the MoH's concerns with these broader areas, the official appointed as director of the DECIIS was a career civil servant from the MDIC chosen precisely to help the SCTIE improve its competence in industrial policy. And the MoH created a Grupo Executivo do Complexo Industrial da Saúde (Executive Group of the CIS, GECIS), also within the SCTIE, to facilitate dialogue with different government agencies and the private sector. The GECIS had the ambitious objective of better coordinating the various government initiatives to increase the sector's competitiveness, besides assuming responsibility for executing the pharmaceutical sector's industrial policy.
Not only did industrial policy gain a higher profile in the MoH's activities, but the MoH became a key player in the design and implementation of Brazil's industrial policy. In addition to the PITCE, discussed above, Brazil had two other major industrial policy plans in this period, the Política de Desenvolvimento Produtivo (Policy for Productive Development, PDP) (2008–10) under Lula and the Plano Brasil Maior (Greater Brazil Plan, PBM) (2011–16) under Rousseff. Both of these, like the PITCE before them, targeted pharmaceuticals as a key sector.Footnote 47 With regard to the PBM, the executive sought to coordinate stakeholders through (i) vertical action by executive committees responsible for specific sector agendas and (ii) horizontal measures to address inter-sector problems (measures to bolster exports, etc.). It was the GECIS that was designated as the body in charge of managing the health and pharmaceutical dimensions of this programme. Not only did this designation reinforce the leadership of the SCTIE team in conducting health industry policy, but it also facilitated the coordination of S&T actions in health and industrial policy with the MoH. Groups of business representatives and government agencies which had previously engaged little in dialogue with each other now had a common channel for communication and for negotiating the conduct of health industry policy. This is evidenced by the minutes of the GECIS meetings, which are public and available on the MoH website.Footnote 48
As for the execution of the components of the CIS in the PBM, an important observation is in order. Two main criticisms of this regarded (i) governance, with the decision to segment industrial policy and turn its execution over to government departments which purportedly lacked expertise in activities to promote industry and (ii) fragmentation, in that the executive committees had broad interest representation, with low coordination capacity, and, potentially, limited economic impact.Footnote 49 However, our research on industrial policy for health suggests exactly the opposite. As we have shown thus far, the SCTIE had already developed important expertise in the health industry, and the MoH staff consisted of industrial policy experts capable of coordinating the execution of the PBM. In addition, this was not the first time that a channel for dialogue had been created among different stakeholders in the pharmaceutical sector by allowing the inclusion of different groups in the executive committee. Such dialogue led to new industry associations, such as Grupo FarmaBrasil, which represents Brazil's leading pharmaceutical firms, and Mobilização Empresarial pela Inovação (Business Mobilisation for Innovation, MEI), a network of business actors interested in collaborating to develop pro-innovation policies in Brazil.
Perhaps the most important illustration of the alignment between health policy and industrial policy is the establishment of a new form of public–private partnerships in Brazil, known as Parcerias para o Desenvolvimento Produtivo (Productive Development Partnerships, PDPs) for Medicines. The SCTIE established partnerships between multinational research companies, public laboratories and domestic industry for technology transfer in strategic medicines. Agreements were established for the production of medicines for AIDS, cancer, neglected diseases and others. As of mid-2017, 86 PDPs had been established, including some for biotech drugs.Footnote 50 The incentive for firms to participate in PDPs comes from the guarantee of purchase from the original manufacturer and later from the company that internalises the technology.
The expression ‘Health-Industry Complex’ also began to be used in the BNDES. Profarma, for example, was no longer regarded as ‘the programme to support the pharmaceutical chain, but the programme to support the development of the CIS’.Footnote 51 Indeed, we witness the reformulation and reorganisation of Profarma too, with the creation of five new component programmes. These included Profarma – Exportação (Exports) and Profarma – Produtores Públicos (Public Producers), which had the objectives of stimulating exports in the CIS (especially pharmaceutical chemicals) and support for public laboratories.Footnote 52 The process illustrates the gradual way these regulatory decisions were made and the coordinated action by the SCTIE, marked by extensive dialogue with the Office of the President, government agencies in innovation management and industrial policy, and members of industry.
Importantly, the policies for the CIS were not immune to criticisms and setbacks. First, pharmaceutical industry associations and civil society groups questioned the partnerships’ transparency, since it was not clear which criteria had been used to determine the list of priority products for the MoH or how the partners were selected.Footnote 53 In addition, a possible fraud in the PDP contracts was exposed while national elections were in progress, thus revealing weaknesses in the programme's governance.Footnote 54 In response, the SCTIE launched a public consultation to draft a regulatory framework for the PDPs. According to Carlos Gadelha, secretary of the SCTIE in 2014, the new regulatory framework is more detailed, forming a kind of shield to protect new contracts, and open to monitoring and evaluation.Footnote 55
To conclude this section, and in light of recent political economic changes in Brazil, it is worth pointing to four observations which suggest that the measures aligning S&T, innovation, industry and health have been consolidated and are likely to persist. First, in the context of political instability, featuring the impeachment of President Dilma Rousseff and her replacement by Michel Temer, business associations from the state-owned and private pharmaceutical industry mobilised jointly to demand continuity in MoH policy.Footnote 56 An industry analysis published in October 2016 suggests that the technology transfer projects have been kept on hold since 2015 due to the country's political crisis, but that they still enjoy strong support from Brazilian and multinational pharmaceutical companies.Footnote 57 Second, following Rousseff's replacement, further investments in the CIS were included in the federal government's Four-Year Plan (2016–19) that sets the MoH budget.Footnote 58 Third, in spite of the strategic changes in financing from BNDES, the pharmaceutical industry is still a priority and enjoys specific financing in the area of the Bank's horizontal (i.e. cross-sectoral) credit lines.Footnote 59 And fourth, outside of government, health institutions and researchers that had long supported the traditional public health model, in which the private sector played only a supporting role in the health system, are now publishing formal notes of support for the CIS and MoH after the transition to the Temer administration.Footnote 60 The civil society organisations associated with AIDS patients and their leaders and representatives, who have a history of conflict with the multinational pharmaceutical companies, do not disapprove of the policies for the CIS – despite their strong criticism for the lack of broad channels for dialogue and demands for greater transparency in the technology transfer negotiations.Footnote 61
Conclusion
This article has analysed the gradual integration of S&T, industrial and health policies in Brazil. Focusing on the role of health researchers and professionals as agents of change within the state, we examined this process of integration as occurring gradually and incrementally from the early 1990s.
Historically, S&T hardly registered on the MoH's radar – it was a peripheral issue and, to the extent that these topics were ever addressed, there was little coordination with other activities being undertaken by the ministry. Yet in the late 1980s and early 1990s, a group of health researchers began holding events on the links between S&T and health, and subsequently developed a research agenda on the theme. As some of these actors then obtained positions in the federal bureaucracy, they were able to begin implementing measures to raise the profile of S&T in the MoH and join together these different policy areas. This constitutes an initial instance of layering.
In the 2000s, in the context of the Lula government's more explicit industrial policy agenda, public health professionals within the state were able to push for both organisational changes and policy reforms that would sow the seeds of a ‘Health-Industry Complex’. Then, following a conflict with an international pharmaceutical firm over the price of a patented drug that was important to the national AIDS programme – which placed significant strain on the health budget and revealed weaknesses in the country's industrial base – these actors in the MoH exploited the opportunity to adapt and expand a new model for technology transfer and use of the state's purchasing power to cover other health inputs. Now the MoH was collaborating with the national development bank and other agencies in the state that worked directly with private industry, tying together S&T, health and industrial policy. This constitutes yet further layering.
These changes took place gradually, and over a considerable period of time. The researchers driving the CIS had worked within Brazil's health bureaucracy for years. José Temporão, for example, an important health professional who would become minister of health at a critical moment in the 2000s, had conducted research on vaccines and pharmaceutical production for decades. The broad trajectory is nicely captured by Carlos Gadelha, then secretary of the SCTIE:
Many people initially criticised the conceptual and political progress of S&T in the health area, but much of what took place over these 20 years is due to the appropriation of the issue by the public health field, when the issue assumed a leading position on the agenda of the CNS [National Health Council] … We need an economic industrial complex that serves the SUS as a whole, instead of only developing three ‘little niche products’ for the global market. Either we agree that building the SUS requires a national policy for science, technology and innovation, or public health will not be possible for us.Footnote 62
Based on the findings in this article, three points merit attention. First, a notable aspect of the CIS is the focus on engaging with the private sector to meet the country's health policy objectives, in terms of encouragement and subsidy of private firms as well as of establishing the partnerships framework. This marks a fundamental shift away from both the traditional approach of the Brazilian health community, which did not envision an important role for private industry, and public policy. Indeed, José Serra's term as minister of health under Cardoso witnessed a strictly state-led production agenda for ARVs, much closer to the traditional public health model.
Second, the research suggests that traditional ideologies may be of little use in understanding health policy changes in Brazil. As we have seen, it was the ‘Centre–Right’ Cardoso government that pursued a state-led strategy for the production of AIDS medicines exclusively by public laboratories, while it was the ‘Centre–Left’ Lula and Rousseff governments that embraced private industry and even went so far as to adopt an approach to technology transfer from leading multinational pharmaceutical firms.
Third, the gradual and incremental nature of these changes should be underscored. It is common to regard the shifts discussed in this article as resulting from a change in the president of Brazil, with the emergence of the PT governments that promoted a broad industrial policy for the pharmaceutical sector.Footnote 63 Yet by starting the analysis in 2003, after Lula's inauguration, such an analysis misses the incremental changes within the state bureaucracy that had occurred previously, and that allowed the CIS to emerge, ultimately, in the 2000s. As we have seen, the researchers driving the CIS had worked within Brazil's health bureaucracy for years. Our study suggests that the actions of reformist groups working within the MoH, and in particular their ability to gain increasing authority and exploit moments of crisis to engineer further changes, provides a stronger explanation for the CIS and, more generally, for the fusing of Brazil's policies on health, S&T and industrial development.
Our study also contributes to the literature on industrial development in Latin America. We emphasise that policies for S&T and innovation are crucial elements of an industrial policy. There is a consensus that one of the main challenges for industrial policies is their linkage to macroeconomic policies, but little attention has been paid to the importance of aligning initiatives to foment innovation, S&T and local industries. The Brazilian case suggests that S&T and industrial policy may be regarded as two sides of the same coin, requiring coordinated action. Indeed, with the Pan American Health Organization (PAHO) reiterating the need for coordination among S&T, pharmaceutical and industrial policies to promote innovation and access to medicines,Footnote 64 Brazil's case can provide important lessons for the countries of the region about potential directions and challenges.
Further studies are needed to allow us to understand whether the Brazilian experience is beneficial in its effects both in the industrial sector and in access to medicines. Successful industrial policies in late-developing countries depend on discipline and ‘reciprocal control mechanisms’,Footnote 65 for example, and further research is needed to understand how such instruments are functioning in the case of Brazil's new approach towards the pharmaceutical sector.Footnote 66 At this point assessments of the impact of these policies are premature. There are some reports of significant investments by Brazilian pharmaceutical companies that have increased their research portfolios in response to encouragement by the PDPs;Footnote 67 studies that question the PDPs as a way to reduce the cost of medicines;Footnote 68 and analyses that question whether there is actual coordination between industrial and health policy.Footnote 69 One of the main policy achievements of the CIS is the establishment of a collaborative network for the production of medicines in the country. Important management tools have been improved: (i) the consolidation of the commission to assess new health technologies, (ii) the improvement of procurement mechanisms for high-cost medicines, with the centralisation of these processes, and (iii) inter-ministerial coordination in a sector crucial for the country's development. Thus far, the main publications on and assessments of these activities have been produced by the government departments themselves and the researchers affiliated with them.Footnote 70 Further studies by independent researchers will be essential, particularly in light of the serious crisis of confidence in the public sphere that currently marks Brazilian politics and society.
Acknowledgements
This study was funded by São Paulo Research Foundation (FAPESP) grants nos. 2015/18604-5 and 2014/0775-3. The authors thank Nilson Costa, Beatriz Tess and the Journal's reviewers and editors for their comments and suggestions.
