{"id":93268,"date":"2025-03-11T14:01:17","date_gmt":"2025-03-11T17:01:17","guid":{"rendered":"https:\/\/murray.adv.br\/?p=93268"},"modified":"2025-03-11T14:01:19","modified_gmt":"2025-03-11T17:01:19","slug":"brazil-considers-lowering-price-ceiling-on-medicines","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/brazil-considers-lowering-price-ceiling-on-medicines\/","title":{"rendered":"Brazil considers lowering price ceiling on medicines"},"content":{"rendered":"\n
Proposal sparks debate amid inflation concerns, raising risks for small pharmacies<\/strong><\/em><\/h6>\n\n\n\n

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03\/11\/2025 <\/p>\n\n\n\n

The Brazilian federal government is set to discuss a proposal in the coming weeks to lower the maximum price of medicines, currently regulated by the Drug Market Regulation Chamber (CMED) under ANVISA, the country\u2019s health surveillance agency. The move aims to narrow the gap between the price ceiling and actual retail prices, as pharmacies typically offer an average 30% discount off the government-set maximum.<\/p>\n\n\n\n

Pharmaceutical retailers and manufacturers argue that the measure could discourage competition and harm small and regional pharmacies. Independent and small-chain drugstores, which make up 80% of the sector, tend to charge full price to maximize revenue and could be disproportionately affected.<\/p>\n\n\n\n

Pharmaceutical companies warn that reducing the price ceiling could result in the withdrawal of lower-cost medicines from the market, as some drugs are already sold with tight profit margins.<\/p>\n\n\n\n

While CMED is exploring ways to bring the ceiling closer to market prices, officials suggest that any reduction will be moderate to preserve the current system of retail discounts.<\/p>\n\n\n\n

This debate is not new. In 2020, Senator Fabiano Contarato (Sustainability Network Party, Esp\u00edrito Santo) introduced a bill on the issue after the Brazilian Institute for Consumer Protection (IDEC) raised concerns that the gap between the price ceiling and actual market prices allows for sudden price hikes during supply shortages.<\/p>\n\n\n\n

With inflation control a priority for the federal government, the issue has resurfaced as part of the regulatory framework for medicines, which was listed in January as one of 25 key initiatives for the Finance Ministry. Some industry representatives believe that proposing a drug price cut now is a political move, aimed at offsetting the government\u2019s image damage caused by rising food inflation.<\/p>\n\n\n\n

During an event held by the National Association of Private Hospitals (ANAHP) last month, CMED Executive Secretary Daniela Marreco confirmed that the topic is under discussion. \u201cWe have debated this extensively, and there is even a bill from 2020 suggesting that CMED should bring the actual market price closer to the ceiling due to the discounts commonly observed,\u201d she said.<\/p>\n\n\n\n

However, Nelson Mussolini, president of Sindusfarma, Brazil\u2019s pharmaceutical industry association, said that the sector has not been consulted by the government on this issue and firmly opposes the proposal, warning of potential disruptions to market competition.<\/p>\n\n\n\n

\u201cIn my view, if the price drops, profit margins shrink in absolute terms. There will be pressure to maintain profitability. Initially, smaller companies will feel the impact, but ultimately, the cost will be passed on to consumers,\u201d he said.<\/p>\n\n\n\n

Mr. Mussolini also warned that lowering the price ceiling could make it unviable to manufacture certain low-cost medicines, as production costs might exceed government-imposed prices.<\/p>\n\n\n\n

When asked whether the proposal is linked to the broader economic landscape, Mr. Mussolini dismissed the idea. \u201cIt doesn\u2019t make sense for the government to lower medicine prices to fight inflation, because pharmaceutical inflation is low and not a major factor. This year, we are already seeing the smallest price adjustment in years,\u201d he said. At 3.8%*, the increase is set to fall below inflation for the first time in seven years.<\/p>\n\n\n\n

Ms. Marreco, from CMED, acknowledged that a sudden policy shift could create market risks. \u201cOne concern we need to consider is that in countries that have adopted similar measures\u2014aligning the price ceiling with actual market prices\u2014over time, we\u2019ve seen a reduction in the discounts offered by manufacturers and retailers,\u201d she noted during the event.<\/p>\n\n\n\n

She also pointed out that in some cases, aligning the price ceiling with market prices has led to price increases for certain medicines whose prices were previously lagging behind inflation.<\/p>\n\n\n\n

The public consultation on the new regulatory framework, which addresses various issues, including high-cost medicines, is expected mid-year. Any changes could be implemented through an interministerial decree, involving the Health, Finance, Chief of Staff Office, and Justice Ministries, as well as ANVISA.<\/p>\n\n\n\n

Ms. Marreco clarified that the ongoing discussions do not impact the annual price adjustment mechanism, which is determined in March and governed by Law 10.742 of 2003.<\/p>\n\n\n\n

In a statement, Interfarma, which represents the pharmaceutical industry, said it was unaware of any formal government discussions on altering the price ceiling. \u201cPoorly structured pricing policies could lead companies to withhold product launches or even cause supply shortages,\u201d the group warned.<\/p>\n\n\n\n

In the retail sector, the biggest risk of lowering the price ceiling for medicines would fall on small, independent pharmacies, which serve remote areas far from urban centers. These businesses operate with higher costs and limited scale, making it difficult for them to sell medicines at lower prices.<\/p>\n\n\n\n

Impact on small pharmacies<\/strong><\/p>\n\n\n\n

Many of these small pharmacies remain profitable not through high sales volumes but by selling at full list prices or operating in the informal market. Given their role in providing essential medications to low-income populations, these businesses are critical to the government\u2019s efforts to expand the Farm\u00e1cia Popular program, which subsidizes medicines for low-income Brazilians.<\/p>\n\n\n\n

\u201cIt\u2019s important to recognize that business models in this industry vary significantly. The market is not uniform, and companies are not all the same,\u201d said a representative from the pharmacy sector.<\/p>\n\n\n\n

According to the executive, lowering the price ceiling could force 50,000 to 60,000 pharmacies out of business, as these stores rely on pricing flexibility to stay afloat. \u201cMany small drugstores survive by selling at full price and only offering discounts when absolutely necessary\u2014often when a customer is about to walk out without making a purchase. Selling at consistently lower prices would be unsustainable for them.\u201d<\/p>\n\n\n\n

Brazil has approximately 90,000 pharmacies, according to the Federal Pharmacy Council (CFF), with 80% classified as micro or small businesses. Many are family-run operations or sole proprietorships, generating an average monthly revenue of around R$60,000, based on industry association data.<\/p>\n\n\n\n

Two major pharmacy chains interviewed said they do not expect negative impacts from the potential policy change. These companies already operate with highly competitive pricing, often below the market average, which is not expected to be directly affected.<\/p>\n\n\n\n

The debate over the medicine price ceiling comes just weeks after the government announced changes to the Farm\u00e1cia Popular program, a move that drew criticism from small pharmacies.<\/p>\n\n\n\n

The Health Ministry recently expanded the list of subsidized products to include adult diapers and dapagliflozin, a medication used to treat diabetes associated with cardiovascular disease. However, independent pharmacies have voiced frustration over delayed government reimbursements for these subsidized sales. With the program\u2019s expansion, more products will be subject to this payment system, further complicating cash flow for smaller businesses.<\/p>\n\n\n\n

These payment delays disrupt financial operations for small pharmacies, which often have limited access to working capital. The problem is particularly acute in low-income regions, where demand for subsidized products is highest, making small drugstores increasingly dependent on government reimbursements to stay in business.<\/p>\n\n\n\n

When contacted for comment on concerns raised by the retail and pharmaceutical sectors, CMED did not respond before publication. The Brazilian Pharmacy Retail Association (ABRAFARMA) also declined to comment.<\/p>\n\n\n\n

*By\u00a0<\/strong>Beth Koike\u00a0e\u00a0<\/strong>Adriana Mattos\u2014 S\u00e3o Paulo<\/p>\n\n\n\n

Source: Valor International<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Proposal sparks debate amid inflation concerns, raising risks for small pharmacies 03\/11\/2025 The Brazilian federal government is set to discuss a proposal in the coming weeks to lower the maximum price of medicines, currently regulated by the Drug Market Regulation Chamber (CMED) under ANVISA, the country\u2019s health surveillance agency. 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