1 May 2011AmericasHedwig Lindner and Manuel Morante

Recognising equivalence, reciprocity and respect

Homologation cannot be fully effective unless it is based on reciprocity and mutual respect. Hedwig Lindner and Manuel Morante explain.

Homologation is viewed as (and often is) a useful means of facilitating governmental authorisations necessary to launch a product subject to regulation in multiple jurisdictions.

Homologation effectively transfers authority from a governmental agency in one country to its counterpart in another country. Thus, the degree of compatibility or equivalence between the regulatory systems of the countries involved must be considered if it is to be effective and legal.

Obviously, the task is more difficult when the countries involved have very different legal systems, traditions and regulatory practices. In these cases, greater effort and care are required to build a fair and functional equivalence system.

Recognising equivalence

Article 161 bis of the Regulation on Health Products was published in the Federal Official Gazette on August 17, 2010. This article authorises the Secretariat of Health to issue ‘general provisions’ recognising that the requirements set by foreign health authorities for the quality, safety and efficacy of products sold, distributed or used in their jurisdictions are equivalent to those set by Mexican laws and regulations.

The first general provisions were published in the gazette on September 3, 2010.

Under these provisions, the Federal Commission for Protection Against Health Risks (COFEPRIS) must do the following before issuing an equivalence resolution:

  • Analyse the prerequisites, technical and scientific evaluation procedures and other requirements that the foreign health authorities set for the sale in their country of health products and ensure that they guarantee the quality, safety and efficacy of the products sold.
     
  • Analyse the technical and scientific evaluation procedures employed by the foreign health authorities in approving the sale of health products, and ensure that they guarantee the quality, safety and efficacy of products that have been approved.
     
  • Analyse, where applicable, the mechanisms and controls, technical and pharmaceutical surveillance undertaken by the foreign health authorities to guarantee the quality, safety and efficacy of products being sold. In this case, the reports or results must be available to COFEPRIS.
     
  • Consider the experience derived from the technical and scientific evaluation of products sold abroad under foreign laws and regulations, for the granting, extension or modification of sanitary registrations.
     
  • Ensure that the prerequisites, tests, evaluation procedures and other requirements of foreign authorities:

Are indispensable for allowing the sale of the products in their respective countries, and

Provide certainty regarding the safety, efficacy and quality of products, to the same degree or to a greater degree than the requirements established by COFEPRIS for sanitary registration in Mexico.

For these purposes, the general agreement states that foreign health authorities must grant COFEPRIS access to information showing that the technical and scientific evaluation procedures they employ guarantee the quality, safety and efficacy of regulated products.

Moreover, COFEPRIS must decide in each case whether it is necessary, before issuing a recognition of equivalence, to visit the facilities where the foreign health authorities undertake the technical and scientific evaluation of health products.

The first recognition of equivalence was published in the gazette on October 26, 2010.

An additional resolution, containing application forms for procedures before COFEPRIS under the foregoing resolution, was published in the gazette on December 13, 2010.

Recognition of equivalence for medical devices (REMD)

The government based its decision to publish the REMD on a perceived need to expedite the entry into the Mexican market of medical devices that embody the most recent technological advances made in other parts of the world. The essential fact is that most medical devices sold in Mexico are previously registered in the United States and Canada.

On January 25, 2011, the Secretary of Health testified before the standing commission of Congress that 91 percent of all medical devices registered by COFEPRIS are foreign and that 44 percent of all Class III medical devices registered by COFEPRIS come from the US or Canada.

"THE REGULATION OF PHARMACEUTICALS UNDER THE WTO FRAMEWORK REMAINS IN ITS INFANCY. THUS, EFFORTS AT HARMONISATION OR HOMOLOGATION SHOULD PROCEED ON A BILATERAL (OR MULTILATERAL) AND RECIPROCAL BASIS."

Under the REMD, COFEPRIS must grant authorisation for the sale of a medical device within 30 days of the application, unless the application is unclear or incomplete, in which case, the term will be restarted from the date on which the applicant provides the missing information requested by COFEPRIS. If COFEPRIS does not respond within 30 days, the application is deemed to have been tacitly approved.

There are clear differences between the regulatory processes in Mexico, Canada and the US. Nonetheless, the REMD states that COFEPRIS undertook the necessary actions to ensure that US and Canadian laws and regulations, and the tests and inspections carried out by the US Food and Drug Administration and Health Canada “adequately comply with the objectives of the [Mexican] Regulation on Health Products”.

The REMD does not specify what ‘actions’ were undertaken by COFEPRIS. The resolution contains only a general comparison of registration requirements in the US, Canada and Mexico. The resolution only emphasises that COFEPRIS may revoke or cancel sanitary registrations for medical devices and, if necessary, order their seizure or recall.

Legal remedy of REMD

Proponents of homologation argue that the reciprocal recognition of equivalence leads to greater efficiency. However, the REMD is not reciprocal. Moreover, it is not based on NAFTA.

There are provisions regarding public health and the sale of pharmaceuticals in agreements that form the legal framework of the WTO, including TRIPS, GATT, the Agreement on Sanitary and Phytosanitary Measures, the Agreement on Technical Barriers to Trade and the General Agreement on Trade in Services. All of these agreements allow member states to adopt measures to prevent health hazards.

However, the language of the agreements is ambiguous: they do not specify the level of risk to public health required to justify regulation, the level of proof required to establish the existence of a risk or the means by which risks to public health are to be balanced against the negative effects of trade barriers.

In short, the regulation of pharmaceuticals under the WTO framework remains in its infancy. Thus, efforts at harmonisation or homologation should proceed on a bilateral (or multilateral) and reciprocal basis. The resolutions published by COFEPRIS are unilateral and non-reciprocal.

Mexican manufacturers of medical devices must continue to meet all requirements established by COFEPRIS for the approval of their products, and the approval of their products by COFEPRIS will count for nothing when they seek approval in the US or Canada.

The REMD is being challenged in the courts. The plaintiffs have argued that the resolution deprives Mexican manufacturers of their constitutional right to equal protection of the law. In addition, it has been argued that Article 161 bis should be struck down because it exceeds the regulatory power granted to the president under the Mexican constitution. The resolutions have also been challenged on the ground that COFEPRIS did not follow the public consultation process outlined in the Federal Law of Administrative Procedure.

Conclusions

Redundant legislation is costly and inefficient. However, poorly designed unilateral homologation schemes confer unfair advantages on foreign manufacturers.

It is premature to assess the overall impact of the first unilateral recognition of equivalence. Any negative effects of the resolution must be carefully considered before COFEPRIS issues similar resolutions covering medicaments or other health-related products manufactured in Mexico.

Mexico must improve the quality of its regulatory agencies so that their decisions are recognised internationally. This will facilitate reciprocal homologation schemes that do not leave Mexican companies at a disadvantage and smother their aspirations for international expansion.

Unfortunately, the speed of globalisation imposes conditions that threaten to cause a steady growth of the technological, economical and social gap between industrialised countries and nations such as Mexico that aspire fruitlessly to join them.

In the meantime, the equivalence resolutions issued by COFEPRIS and their claimed statutory basis disrupt the national legal order by ignoring the primacy of international treaties over federal regulations and the principle of reciprocity that these treaties embody.

Hedwig Lindner is a partner at Arochi, Marroquín & Lindner, S.C. She can be contacted at: hlindner@aml.com.mx

Manuel Morante is an associate at Arochi, Marroquín & Lindner, S.C. He can be contacted at: mmorante@aml.com.mx