CRITICISM OF BRAZIL DRUG PRICING GROWS, DESPITE TAX CUTS

Despite recent tax reforms which could see retail drug prices cut by as much as 15% in Brazil, local surveys have continued to highlight the high local cost of patented pharmaceuticals. The research comes at a time when the government is on the point of compulsorily licensing lopinavir/ritonavir, a key HIV/AIDS therapy produced by US firm Abbott Laboratories.

According to the report, published in a local business journal, in currency-adjusted terms Brazil's government spends roughly eight times more than South Africa on antiretroviral drugs, and 146% more on drugs for Hepatitis C than the US. The survey indicates that just 14 drugs accounted for 64% of all government drug spending in 2003. The situation is more serious outside the federal level, where state officials are facing widespread legal actions intended to force consumer access to key drugs.

Nevertheless, the data should not be taken at face value. Notably, Brazil's main official reimbursement structure, the SUS, accounts for only a minority of the value of drug sales in the country. In the meantime, it also remains to be seen whether foreign firms will be willing to accept Brazil's moves to invalidate patents and impose its own novelty and efficacy criteria on innovative drug products.