FDAnews
www.fdanews.com/articles/73070-brazil-s-slow-price-rises-hint-at-growing-generic-competition

Brazil's Slow Price Rises Hint at Growing Generic Competition

June 7, 2005

A survey of Brazil's drug market has indicated that prices have risen, but have remained well below the rate officially enforced in April. However, the fact that average selling prices have failed to keep pace with even the government's cost-conscious targets has not surprised generics makers. According to lobbyists, the sector is also driving competition in the retail sector, with consumer discounts further restraining the potential for price rises.

Brazilian drug pricing authority CMED mandated a 12-month maximum rise of 7.39% at the end of March, against an estimated rise of 7.12% in 2004. However, the increase was authorised in three price bands, allowing below-inflation rises for many competitive generic products.

At the time, much of the research-based pharmaceutical community protested the plans, which envisaged the lowest rise since the adoption of the inflation-busting Real Plan in the mid-1990s. Many of the sharpest rises -- of some 19% in 1995 and 1996 and 16% following the devaluation of the currency in 1999 -- were never completely factored into government pricing plans, leading to substantial loss of revenue among drugmakers.

Notably, local generics lobby Pró Genéricos estimates that anti-infectives and anti-hypertensives, which have risen by a sector low of 3% this year, have the strongest generic alternatives. Brazilian law requires that generics offer a discount of 35%, but savings of up to 70% over branded equivalents are reportedly widely available. Meanwhile, treatments for haepatic disorders and anti-allergics saw the sharpest rises, of around 6%. This has been attributed to these products' low unit value for domestic generic drug producers.