Approved by Brazil’s Senate two weeks ago and awaiting presidential approval, Bill 2,583/2020 would establish a formal industrial policy for the healthcare sector, bringing together productive partnerships, innovation programs and government-backed technology procurement.
At the center of the strategy is the Unified Health System, known by its Portuguese acronym SUS. As one of Brazil’s largest buyers of medicines, vaccines, medical equipment and healthcare supplies, the system has enough scale to organize demand over the long term and provide greater predictability for new investments.
The proposal is to use public procurement to attract factories, provide scale, promote technology transfer and develop local suppliers, turning part of healthcare spending into productive investment. The US, China and the European Union already use similar instruments in strategic sectors, combining credit, subsidies, domestic preferences and long-term contracts to steer private capital.
Perhaps the bill’s most important institutional innovation is the creation of the Strategic Health Company, or Empresa Estratégica de Saúde in Portuguese, known as an EES. The designation could be granted to public or private companies with production facilities, research operations and technological development capabilities in Brazil.
Companies receiving the designation could participate in government partnerships, receive priority in regulatory reviews, access financing lines and benefit from policies designed to support domestic production.
The strength of the model also creates its greatest risk. Strategic-company status cannot become a politically awarded seal that provides easier access to public contracts, credit and favorable regulatory treatment. The accreditation process will need the institutional rigor expected of a public development bank, including technical analysis, objective criteria, professional governance, transparency and continuous oversight.
It will not be enough to declare that a company is important to the SUS. Applicants will need to demonstrate financial, industrial, scientific and technological capacity, as well as clear targets for production, innovation and technology transfer.
An EES should be judged by what it actually adds to Brazil: control over production processes, domestic manufacturing of critical inputs, training of researchers, patent generation, export capacity and a measurable reduction in dependence on foreign suppliers.
Long-term procurement contracts may be essential to make factories viable when they require billions of reais and several years to reach scale. But any protection must come with verifiable targets and consequences for underperformance. The goal should be to create companies that can compete and innovate, rather than suppliers that remain indefinitely dependent on reserved government contracts.
A company that benefits from guaranteed demand, preferential financing and regulatory priority must show that it has delivered real technological capacity to the country. If it fails, it should lose those benefits and, ultimately, its strategic-company designation.
The SUS can do more than replace imports. It can become the first major buyer of technologies developed in Brazil, giving companies the initial scale they need to reach international markets. The industrial policy will be far more valuable if it creates exporters rather than merely domestic government suppliers.
Brazil’s public health system is already one of the world’s largest social programs. The country is now seeking to turn it into one of its most important industrial-policy platforms as well. The ambition makes sense. But Strategic Health Company status must remain a technical, demanding and reversible qualification — never a title handed out by whichever government happens to be in power.