ENSCEIS: Will the Brazilian law of industrial sovereignty finance those who innovate, or only those who have already succeeded?

Jul 5
8 min read

Bill 2.583/2020 concludes a six-year process with rare political support for the topic. The important question is not whether Brazil needs an industrial policy for healthcare. It is whether this policy knows how to recognize the technological risk assumed by those who do not yet have the capacity, or whether it will, once again, reward those who have already eliminated the risk from their own equation.

The Brazilian National Health Strategy of the Health Economic-Industrial Complex - ENSCEIS transforms the SUS (Unified Health System), the country's largest purchaser of healthcare, into an instrument of industrial policy, using guaranteed purchases, subsidized credit, and regulatory priority to induce national production, but it designs these incentives around those who already have factories, a track record, and scale, not those who are building the next generation of health technology.

I've been following debates on industrial health policy since the days when "health industrial complex" still sounded like academic jargon and not a government agenda. Throughout this time, I've learned to ask one question before any other, whenever a government announces incentives for the national industry: was this policy designed for those who assume risk , or for those who resolved the risk years ago and now just want to guarantee demand? These are two completely different public policy problems, and most of the legal texts I've seen confuse the two.

The project originated in 2020, authored by Congressman Dr. Luiz Antonio Teixeira Jr. (PP-RJ), with a much more modest scope than the text we have today: specific incentives for the medical and hospital equipment and supplies industry. Over more than five years of processing in the Chamber of Deputies, it gained momentum until it became something much more ambitious, amending three central laws of the sector: the Law on Drug Registration , the Law on Public Procurement , and the Organic Law of Health itself.

The Chamber of Deputies approved the text in July 2025, by 352 votes to 63, a margin that few industrial policy issues manage to achieve. The Senate received the bill, processed it through the CCJ (Committee on Constitution, Justice and Citizenship) and CAE (Committee on Economic Affairs) without altering its substance, and approved it in plenary session at the end of June 2026. As there were no substantive amendments, the text goes directly to presidential sanction, without returning to the Chamber of Deputies.

ENSCEIS - A law written for those who have already arrived.

ENSCEIS organizes three partnership instruments: Partnerships for Productive Development (PDP) , Local Development and Innovation Programs (PDIL) , and Technological Orders in Health , around a central legal entity, the Strategic Health Company (EES) . And it is here that the architecture of the law begins to tell its true story. To be accredited as an EES, the company must cumulatively prove an existing industrial facility in the country , a history of productive activity, and the capacity to ensure continuity and expansion. This is not for those who are just starting out. It is for those who already have a plant, a previous contract, and have already proven their capacity for large-scale production.

The entire architecture of advantages under the law revolves around this figure: guaranteed acquisition by the Ministry of Health in the agreed volumes, tenders that can be restricted to products from health-related companies, preferential treatment in public procurement, credit lines subsidized by BNDES (Brazilian Development Bank), priority in the regulatory queue at ANVISA (Brazilian Health Regulatory Agency). None of these benefits is neutral in relation to those who receive them. They all presuppose a company that has already overcome the most difficult and riskiest stage of technological development in health, which is precisely the stage in which biotechs , healthtechs, and deep tech startups still find themselves, and where they most need public policy support .

I'm not saying these criteria are irrational. Reducing adventurism in long-term contracts with the SUS (Brazilian Public Health System) is a legitimate concern, especially after years of seeing poorly executed PDPs (Product Development Partnerships). What I want to emphasize is that this law is designed, at its core, to manage installed productive capacity , not to finance the creation of new capacity based on genuine technological risk. These are two different industrial policies, and Brazil needs both. ENSCEIS (National Strategy for the Control and Evaluation of Industrial Development) only delivers one.

PDIL: the exception that proves the rule, and the bottleneck that neutralizes it.

If there is one place in the law where the innovation ecosystem should find its space, it is in the Local Development and Innovation Program. It is the only instrument that explicitly mentions startups among its target audiences, alongside ICTs, public producers, and private non-profit entities. And it offers a technically sound mechanism: payment in phases, according to the delivery of validated intermediate results.

Anyone who has tried to fund innovation in healthcare knows that this detail is not bureaucratic, it's structural. Cutting-edge innovation isn't funded with reimbursement at the end of the project; it needs milestones, progressive validation, and a designed tolerance for technological risk. In this respect, the PDIL (Program for the Development of Innovation in Healthcare) gets the diagnosis right.

However, the law itself neutralizes this opening in the following article: every PDIL project must necessarily involve an ICT or public producer in partnership with a HEI. A startup cannot access this instrument alone, nor in direct partnership with the SUS. When it enters, it is subordinated to an arrangement led by a public institution and a company that already meets the installed production capacity requirements we have just described.

In a law that already structurally favors those with scale, this design forces startups to face two obstacles simultaneously: the bureaucratic one , requiring institutional intermediation to access the very instrument designed for them, and the negotiation obstacle, entering into an arrangement where the larger partner holds the productive capacity, the history of contracts with the State, and, most likely, the majority of the negotiable intellectual property.

The Brazilian health innovation ecosystem already suffers from excessive institutional intermediation between funding agencies, ICTs, public laboratories, and processes for incorporation into the SUS (Brazilian Unified Health System), which rarely result in a product. Instead of reducing this chain, ENSCEIS formalizes yet another mandatory link within it, placing this link precisely at the entry point that should be the most open.

What a true technology risk policy would require.

If the goal were, in fact, to ensure that the State's purchasing power finances those who undertake significant leaps in innovation, and not just those who have already eliminated the risk of scale, the law would need mechanisms that simply do not exist in the approved text. Negotiable intellectual property between ICTs, HEIs, and startups, instead of being presumed in favor of those who already have the legal strength to negotiate it. Technological maturity criteria , the already known TRL levels, as a formal part of the calls for proposals, so that an early-stage technology is not evaluated by the same productive capacity criteria as an established company. Some regulatory sandbox mechanism for clinical or operational validation of emerging technologies, currently absent in the text. And, above all, an access route to the PDIL (Program for the Development of Innovation and Innovation) that does not depend on a startup first finding an HEI willing to lead the arrangement.

None of this is in the law. What is there is the mention, always welcome in any legal text, that startups are part of the target audience for training and innovation projects, without this mention being accompanied by a mechanism for direct access, protection of intellectual property, or evaluation criteria appropriate to the stage of maturity of these companies.

A parallel that exposes the gap more clearly.

It's worth looking outward, not to copy models, but to understand what other countries have done differently. In the United States, the federal agency Biomedical Advanced Research and Development Authority ( BARDA) operates specific acceleration programs for early-stage companies, with non-dilutive (non- equity ) funding structured by technological milestone, precisely so that the risk of innovation does not fall entirely on those with less capital. In the European Union, the design of the Health Emergency Preparedness and Response Authority (HERA) includes funding mechanisms directed at emerging solutions, without requiring the company to already have installed production capacity as a prerequisite for participation. These are systems that recognize a distinction that ENSCEIS does not make: the risk of those developing new technology is different from the risk of those scaling already validated technology , and each requires a different incentive design.

Brazil has an advantage that none of these countries possess: a continent-sized public health system that can act as the first buyer of any national technology, validating it in real-world use before any other market in the world. It is precisely this advantage that an industrial policy designed for deep tech startups should exploit. The ENSCEIS , in its current design, largely leaves this advantage untouched.

Technological autonomy is not built solely by those who are no longer at risk.

There is a distinction I have learned to value over time, between defensive substitution , which replaces imports with local production looking backward, and technological capability , which uses the public market to build new competence in critical platforms, looking forward. ENSCEIS explicitly speaks of productive and technological platforms, which is the right vocabulary. But the right vocabulary, without the institutional design that allows those creating these platforms from scratch to truly compete for the same incentives as those already operating them at scale, tends to produce the most predictable result of any poorly designed industrial policy: consolidating those who were already consolidated, and calling that sovereignty.

If regulatory implementation corrects this gap, effectively creating a direct access route for startups and technological maturity criteria in calls for proposals, Brazil can use this law to finance the innovation leaps that are lacking in biologics, advanced therapies, and digital health. If it does not correct this, the country will nationalize the production of technologies that are already lagging behind the global curve , precisely while the frontier leaps continue to be made, financed, and captured outside of Brazil.

What comes after the sanction, and why the innovation ecosystem needs to be on the table?

The presidential sanction will be treated as the landmark of this story. But those who build or finance health startups in Brazil know that the real decision has not yet been made: it is in the regulatory phase that the MCTI (Ministry of Science, Technology and Innovation), the MDIC (Ministry of Development , Industry and Foreign Trade ) and the Ministry of Health will conduct throughout 2026 (and 2027?). It is there that the criteria for accrediting health-related businesses, the regulation of the PDIL (Program for the Development of Health Innovation and Logistics), and whether startups will gain a direct access route or continue to depend on institutional intermediation to participate in a strategy that already mentions them, but does not yet actually include them, will be defined by an act of the Executive Branch.

This is the window in which the health innovation ecosystem needs to make itself heard, not afterwards, complaining about exclusion, but now, proposing the concrete design that is missing: TRL criteria in calls for proposals , negotiable intellectual property , and a way to access the PDIL (Program for the Development of Innovation in Health) that does not require, as a precondition, finding a partner who already has everything that the startup is still building.

The Brazilian Unified Health System (SUS) has ceased to be merely a final destination for imported technology and has become, by law, an instrument for building national capacity. The question that will define whether this change generates true technological autonomy, or just a new generation of protected contracts for those who were already winning before the law existed, will not be answered by the approved text. It will be answered by the regulations that are yet to be written, and by whoever is at the table when they are written.

Over the next two years, ENSCEIS will decide whether Brazil builds a new generation of biotechnology companies or simply protects the current one. At the Brazilian Health Innovation Institute - IBIS, we closely monitor every new regulation that affects the health innovation ecosystem. Do you want to understand how this law affects your startup or your investment thesis? Talk to the IBIS team.

Sources : Federal Senate, Chamber of Deputies, Ministry of Development, Industry, Trade and Services, Ministry of Health, Ipea, TCU, BARDA, European Commission.