Brazilian Government Targets Tighter Price Controls

The failure of government attempts to freeze price levels from mid-2000 onwards has prompted the Brazilian authorities gradually to reassess drug pricing policy. Following the election of the government of President Lula da Silva, officials have attempted to exert a measure of control over the issue.

Law 10.752 of October 2003 created a new pricing agency, under the auspices of Anvisa, known as CMED. The new institution determines price rises using a combination of the official consumer price index and indices of production within the pharmaceuticals sector, relative to overall industrial output. Crucially, CMED has the authority to decide which drugs are included within its annual price adjustments, potentially allowing the government a certain discretion over drug pricing during periods of higher inflation and economic decline, as evidenced by only small rises during harsh prevailing market conditions in 2001-2003.

Given that 96% of the estimated 6,000 drugs on the Brazilian market are included in the list, this facility is also a potentially useful plank in the government's sector policy. As there is already widespread multinational sector criticism of possible conflicts within regulatory agency Anvisa, it appears that pricing has become a further weapon in the government's drive to lower the cost of healthcare in the country.