Brazilian Pharma Sector Awaits Drug Price Rise

Brazil's drug industry is awaiting details of this year's scheduled increase to drug prices, mandated by CMED, the pricing unit of local drug regulator Anvisa. According to local industry association Febrafarma, drug prices rose 6.5% in 2004, slightly below the rate of general rate of inflation because of the depreciation of the US dollar in the 12-month period. Approximately 96% of the 6,000 products on Brazil's drug market are subject to price controls.

However, the multinational sector is likely to be most affected by the rise, as the agency expects to raise prices on products with generic alternatives by 1.5% above the general rate of increase. Anvisa officials claim that the expected move is part of efforts to boost competition in the sector by encouraging the entry of rival generic products. This development will be unlikely to please some multinational companies, in view of Brazil's recently mixed record on patent protection and the government's moves in favour of its locally based manufacturing industry.