RegulationLaws and regulations
What are some of the primary laws and regulations governing or implicated in healthcare-related business combinations? Are healthcare assets subject to specific regulation that would be material in a typical transaction? Is law and regulation of healthcare national or subnational?
Since Argentina is a federal country, each province and municipality may promulgate its own public law rules. Thus, each province may have its own regulation on life sciences and healthcare businesses.
For the life sciences industry, the National Agency of Medicines, Food and Medical Technology (ANMAT) is the national health authority in charge of registering or granting authorisations to those involved in the supply, production, manufacturing, fractioning, importation, exportation, distribution, warehousing or commercialisation of pharmaceutical products, medical devices, food and cosmetics, among other regulated products. Depending on the specific business of such industry, other or additional health authorities at a national level may be involved (for example, the National Food Safety and Quality Service). Additionally, each province has its own health authority that works jointly with ANMAT and may issue regulations.
On the other hand, for the healthcare industry in charge will depend on the specific activities carried out by the target in the healthcare business because provincial laws may have regulated the activities in such areas where the provinces have not delegated their powers to the federal government for the health-related matter or have not adhered to a law enacted by the federal government.
Additionally to all commonly applicable laws and regulations compared with a more general business combination, the primary national laws governing both healthcare and life sciences-related business combinations, among others, are the following.
Life sciences (mainly medicines and medical devices laws and regulations)
- Law No. 16,463 on Medicines (as amended and complemented) governs the activities of production, manufacturing, import, export, fractioning, commercialisation, storage of medicines, chemical products, reactives, pharmaceutical forms, medicines, medical devices, diagnostic devices and any other product for use or application of medicine on human beings and whoever participates – individuals or corporations – in such activities and can only be performed upon the prior authorisation and control of the health authority, in premises duly licensed and managed by a technical director duly appointed with the health authority.
- Executive Decree No. 150/92 (as amended) applies to the registration, manufacturing, fractionation, prescription, sale, marketing, export and import of medicines.
- ANMAT Regulation No. 5,755/96 (as amended) complements Executive Decree No. 150/92 and regulates the proceedings to register medicines before the health authority providing different pathways for filing the application form. ANMAT Regulation No. 4,622/12, as amended and complemented, regulates the proceedings to register drugs or medicinal specialties aimed at preventing, diagnosing and treating rare or serious diseases for which there is no secure or effective treatment available (orphan drugs).
- Decree No. 1,299/97 also regulates the Law on Medicines. This Decree set up the rules for the supply chain of medicines, requiring being prior and duly authorised by the health authority to engage in such activities.
- ANMAT Regulation No. 9,707/19 regulates the authorisation for commercialisation approval granted by the health authority with respect to each product, which should be obtained in order to be allowed to market the product in the country, by correctly passing the ‘first batch technical inspection’ at the facilities of the pharmaceutical company (ANMAT Regulation No. 5,743/09).
- ANMAT Regulation No. 7,075/11 establishes the requirements and demands for the registration of biological medicines.
- ANMAT Regulation No. 3,397/12 approved the specific requirements for the authorisation of biological drugs or monoclonal antibodies obtained from recombinant DNA methods. Those requirements are considered complementary to the ones provided by ANMAT Regulation No. 7,075/11.
- ANMAT Regulation No. 7,729/11 regulates the registration proceeding for biosimilars.
- ANMAT Regulation No. 2,319/02, as amended and complemented, sets forth the requirements for a company to be holder of marketing authorisation certificates and to commercialise medical devices.
- ANMAT Regulation No. 2,318/02, as amended and complemented, defines the types of medical devices can be registered depending on the intrinsic risk for human health.
- ANMAT Regulation No. 9,688/19, sets forth the requirements for the registration of medical devices at the National Registry of Manufacturers and Medical Devices as well as the necessary documentation to be submitted in the case of modifications to the marketing authorisation certificates already issued by the health authority.
- Law No. 17,132: governs the practice of the medical profession, dentistry and many of the collaboration activities related to them in the Autonomous City of Buenos Aires and federal territories. This Law sets forth the main requirements that healthcare business must comply with to obtain the relevant authorisations.
- Decree No. 6,216/67: regulates Law No. 17,132 and sets forth that the Ministry of Health will establish the requirements that healthcare facilities must comply with to obtain the relevant authorisations.
- Regulation No. 2,385/80 of the Public Health State Secretariat: approves complementary rules and standards for the full implementation of Law No. 17,132 and Decree No. 6,216/67.
- Ministry of Health Regulation No. 1,789/06: regulates the reception and the delivery of certain biological materials into the country or abroad, for diagnostic and investigative purposes.
- Law No. 26,682: establishes the regulatory framework of Private Healthcare Insurance Providers, as amended and complemented by its regulatory decrees No. 1993/11 and 1991/11.
- Law No. 23,660: establishes the regulatory framework of Public Healthcare Insurance Providers.
- Law No. 23,661: creates the National Health Insurance System, as amended and complemented.
- Decree No. 1,615/96: creates the Superintendency of Health Services.
- Law No. 24,804 of Nuclear Activities and Regulations No. AR 8.2.4 and No. AR 8.11.3.
- Ministry of Health Regulation No. 201/02: approves the Mandatory Medical Program.
What regulatory and third-party consents, notifications and filings are typically required for a healthcare business combination?
The response differs depending on the deal structure. From a corporate perspective, the companies must notify the Public Registry of Commerce of the applicable jurisdiction when a business combination takes place and, probably, the same with the antitrust commission depending on the share market of the business to be acquired. From a life sciences and healthcare perspective, and depending on the deal structure, filings with the health authorities will usually be needed, which has a strong impact on the deal’s timing depending the structure chosen.Ownership restrictions
Are there any restrictions on the types of entities or individuals that can wholly or partly own healthcare businesses in your jurisdiction?
Restrictions will depend on the jurisdiction where the life sciences or healthcare business is located and the specific activities carried out by the target company in said industry (for example, the restrictions are not the same for acquiring a pharmaceutical company or a medical device company than a deal structure for acquiring a healthcare institution or a healthcare insurance provider). In some jurisdictions, there are certain restrictions on the types of entities or individuals that can wholly or partly own life sciences or healthcare businesses.Directors
Are there any restrictions on who can be director of healthcare businesses in your jurisdiction?
There are no restrictions in the Argentine Companies Law No. 19,550 regarding who can be the director of a healthcare or life science business.
The business director is different from the medical director or the technical director, which are mandatory positions depending on the specific activities carried out by target company in the healthcare or life sciences business.Operating outside the home jurisdiction
What domestic regulatory issues might arise for a company based in your jurisdiction operating healthcare businesses in other jurisdictions?
This will depend on the activities carried out by the company and the industry involved (life sciences or healthcare). For example, cross-contamination of products during manufacturing or adverse event reactions during commercialisation may trigger recall procedures in the country that may have an impact in other jurisdictions. Regional interactions with healthcare professionals conducted in an improper way by the company may also impact outside local jurisdiction. Furthermore, anticorruption local issues may impact outside the country too.Cross-border acquirers
What domestic regulatory issues arise when the acquirers of healthcare businesses are based outside the jurisdiction?
In general, foreign investors who want to invest in healthcare or life sciences businesses in Argentina, either by starting up new companies or by acquiring existing companies, do not require prior government approval from a health regulatory perspective. However, if a foreign company’s investment is in holding equity in an Argentine company, the foreign company must register in the Public Registry of Commerce of the jurisdiction where the Argentine company is incorporated. The Argentine Constitution states, as a general principle, that foreigners investing in economic activities in Argentina have the same status and the same rights that the law grants local investors.Competition and merger control
What specific competition or merger control issues may arise in healthcare business combinations?
Competition or merger control issues may arise in a healthcare or life sciences business combinations, as they are regulated by two different legal frameworks.
In 2018, the Antitrust Law entered into effect, and on the same day, Decree No. 480/18 was published in the Official Gazette, by means of which the Argentine Executive regulated certain core points of the Antitrust Law. The Antitrust Law created the Argentine Competition Authority, a new, decentralised and self-regulated entity within the scope of the Argentine Executive Antitrust Law. It applies to all individuals and entities doing business in Argentina and to those doing business abroad to the extent that their acts, activities, or agreements may have an impact in the Argentine market. It prohibits certain acts or conduct relating to the production and exchange of goods and services if they limit, restrict, falsify or distort competition, or if they constitute abuse of a dominant position in a given market.
The Antitrust Law requires certain transactions resulting in economic concentrations to obtain prior approval from the Argentine Competition Authority. Transactions requiring such approval are those resulting from mergers, transfer of businesses, spin-offs, acquisitions of any shares, or any other rights that grant to the acquirer control of, or a substantial influence over, the issuer and any other agreement or act through which the assets of a company are transferred to a person or economic group or which gives decision-making control over the ordinary or extraordinary decisions of management of a company. Approval from the Argentine Competition Authority must be obtained when the companies involved in the transaction have a combined volume of business in Argentina of over 100 million Adjustable Units (equivalent to 4,061,000,000 pesos). In relation to transactions that take place abroad, the Argentine Competition Authority must be notified if both parties do business in Argentina, either through a corporate presence or through sales made in Argentina.
On the other hand, the Corporate Criminal Liability Law No. 27,401 sets forth a special provision for mergers and spin-offs operations (the Subsequent Liability) establishing that in cases of transformation, merger, absorption, spin-off or any other corporate modification, the liability of the legal entity is transferred to the resulting or absorbing legal entity.State and private healthcare combinations
Are there any differences for healthcare business combinations if the transaction relates solely to businesses servicing private clients rather than state-funded clients?
In general, the healthcare and life sciences business require a thorough review from a compliance industry and anti-corruption perspective. If a company provides goods or services to public or state-funded clients, for example, for pricing and reimbursement schemes with public healthcare insurance providers, hospitals, national or provincial government for sanitary programmes, etc, the deal structure would require a more extensive due diligence on such commercial relationships; and additional representations and warranties to mitigate any potential risk from a compliance industry and anti-corruption point of view that may arise from those commercial relationships.