Table 2 (abstract P5). Summary of the price regulation policy interventions recommended by WHO and implemented in Brazil

Regulation of mark-ups in the pharmaceutical supply and distribution chain

The mark-up is obtained by the difference between the ex-factory (PF) and maximum consumer’s price (PMC). PF is the maximum price for manufacturers and PMC is the maximum retail price for pharmacies. They are established by the Interpretative guideline CMED nº 02/2006 and an average mark-up of 38% is allowed. Nevertheless, the margin from the manufacturer to the wholesaler is not regulated. This issue is currently subjected to research at the CMED.

Tax exemptions/ reductions for pharmaceutical products

There is exemption for the positive list of prescription medicines from the federal taxation on commercialisation. More than 70% of the medicines in the Brazilian market are exempt from Federal taxation (PIS/Cofins) on commercialisation, mostly, prescription medicines and 95% of the medicines that are not exempt are over the counter (OTC).

Application of cost-plus pricing formulae for pharmaceutical price setting

Cost-plus pricing is not used in Brazil.

Use of external reference pricing

External reference pricing is used to set the maximum prices (ex-factory, consumer price) in combination with Health Technology Assessment (HTA) for new/innovative medicines with added therapeutic benefit compared with the existing medicines available in the Brazilian market or new/non-innovative medicine without a comparator in the Brazilian market.

Brazil uses a basket of 9 countries (Australia, Canada, Spain, United States of America, France, Greece, Italy, New Zealand and Portugal, plus the country of origin.

Promotion of use of generic medicines

Legislative measures for early market entry, prescription by INN and generic substitutions are in place. Price of generic medicines are set as 65% of the reference medicines. Prices are set using internal reference pricing (IRP).

Lists of authorised prices of medicines (including generics) are publicly available

Use of health technology assessment

A legal framework is in place to define both mechanisms and institutions responsible for price setting as a mandatory requirement for commercialisation and incorporation of medicines in the Unique Health System (SUS), the Brazilian National Health System.

HTA is used in price setting for new medicines in combination with ERP and IRP and the prices defined are publicly available.

HTA is also used for decision making regarding incorporation of medicines to the SUS and decisions are publicly available.

Other policy interventions

Mandatory discounts for public procurement were established by CMED based on the ex-factory maximum price authorised, namely Price Adequation Coefficient (CAP). The resulting price is the Maximum Price for Sales to the Government (PMVG), which is updated annually, and it is currently 20.16%.