The Brazilian government is considering reducing the maximum price ceiling for medicines, with discussions set to take place shortly. Intending to narrow the price gap, pharmaceutical retailers and small pharmacies warn that such changes might discourage competition and significantly affect smaller operations. Concerns about profit margins and potential medicine withdrawals also underscore this complex debate amidst the current economic landscape.
The Brazilian federal government plans to discuss a potential reduction in the maximum price of medicines set by the Drug Market Regulation Chamber (CMED) under ANVISA. The objective is to align the price ceiling with actual retail prices, as pharmacies currently average a 30% discount from the established maximum.
Pharmaceutical retailers and manufacturers express concern that lowering the price ceiling may hinder competition and adversely affect small and regional pharmacies, which constitute 80% of the market. These smaller outlets often charge the maximum price to optimize revenue, exposing them to disproportionate challenges if the ceiling is reduced.
Pharmaceutical companies caution that lowering the price ceiling could lead to the withdrawal of more affordable medications from the market, with many already struggling to maintain profit margins. Meanwhile, officials at CMED indicate that any proposed reductions will be moderate to sustain retail discounts.
The issue is not novel; Senator Fabiano Contarato previously introduced a bill in 2020 after the Brazilian Institute for Consumer Protection highlighted concerns over sudden price increases during supply shortages. Presently, the government prioritizes inflation control, and the topic resurfaced as a key regulatory concern within the Finance Ministry’s initiatives.
At a National Association of Private Hospitals event, CMED Executive Secretary Daniela Marreco confirmed ongoing discussions about the price ceiling. She noted that the proposal aims to match market realities more closely due to common retailer discounts. However, industry opposition is voiced by Nelson Mussolini, president of Sindusfarma, who warned of the dangers of decreased market competition and potential consumer impacts.
Mussolini also expressed skepticism regarding the linkage of this proposal to broader economic trends, asserting that pharmaceutical inflation is currently minimal and not a major concern. He declared, “It does not make sense for the government to lower medicine prices to fight inflation, because pharmaceutical inflation is low.”
Marreco acknowledged that a sudden policy shift could pose market risks and pointed out that previous attempts at aligning price ceilings with market prices occasionally resulted in increased costs of medicines that lagged behind inflation. A public consultation regarding this new regulatory framework is expected mid-year, and changes may be enacted through an interministerial decree involving multiple ministries and ANVISA.
Amidst the discourse surrounding drug pricing, significant risks to small and independent pharmacies are becoming increasingly evident. These entities, especially in remote areas, often manage higher operational costs and work with minimal scale, leading to common reliance on flexible pricing to maintain profitability.
In summary, Brazil’s proposed changes to the maximum medicine price ceiling have sparked significant concerns among various stakeholders, particularly independent pharmacies that may suffer from reduced pricing flexibility. The ongoing discussions aim to align drug prices more closely with retail levels while balancing the need for market competition and accessibility, especially for low-income populations. Given the complexities of this issue, the impacts of any amendments to current regulations will require careful consideration to safeguard essential healthcare provisions.
Original Source: valorinternational.globo.com
