MP 656 and the opening of the health sector to foreign companies and investments.

On December 17 of 2014, the National Congress approved the Provisional Executive Act no.?656/2014 ("MP 656") which, among other provisions, set forth specific guidelines regarding the "opening to foreign investments in the rendering of health related services".

MP 656 will now be evaluated by the President, that will have 15?(fifteen) days to sanction or reject it, in whole or in part.

Article 142 of MP 656 altered Federal Law no. 8.080, dated as of September of 1990, to:

  1. previse, in its Article 23, direct or indirect ownership of equity, including corporate control, of companies or of foreign capital employed in the rendering of health related services, and:
  2. enable, in the new Article 53-A, the possibility of direct or indirect exploitation of activities that support health related services by foreign companies or by means of foreign investment.

The relation of activities that allow foreign investments is significantly extensive. In the health sector, for example, Article 23 - abovementioned - establishes that:

"Article 23 (...)

I - donations of international entities associated with the United Nations, of entities of technical cooperation and of financing and loans;

II - legal entities destined to install, operate or explore:

a) general hospitals, including philanthropy, specialized hospitals, medical clinics, general clinics and specialized clinics; and

b) actions and researches for Family planning;

III - health related services maintained, without lucrative purposes, by companies, for the medical assistance of its employees and respective dependents, without any charge to the social security system; and

IV - other cases provided for in specific legislation".

Concerning to activities for support of health related services, Article 53-A provides for:

  • Human genetic laboratories;
  • Production and supply of pharmaceuticals and health related products;
  • Clinical analysis laboratories, pathological anatomy and imaging diagnosis.

In case MP 656 is sanctioned by the President without veto to any of the dispositions mentioned above, foreign investments in hospitals, clinics and national laboratories will be allowed, without limitation to equity share.