Author: Carlos Alexandre Geyer

Source: SnifBrasil - ARTICLES - 14/12/2009

I sincerely believe that when the Government talks about promoting greater access for the population to medicines and does not concurrently provide measures to reduce the absurd tax burden, the largest in the world, on them, schizophrenic conduct is configured.

Society needs to be aware that one third of the amount you pay for the drugs you use corresponds to taxes. Taxes that the state and federal governments are reluctant to give up, even knowing how much they are doing with this attitude making it difficult for the population to access medicines.

In 2008, more than R $ 10 billion in taxes must have been collected on medicines sold in the country. And we know that this transfer of income to the public sector did not result in an equivalent benefit for the needy population, given the amounts spent by managers health in the purchase of medicines, which, systematically, over the years have been significantly lower than the amount of tax collected. Entities linked to the pharmaceutical industry and commerce have long been warning of the absurdity that this tax burden represents.

The study “Radiography of Taxation on Medicines”, carried out in 2005, by the IBPT (Brazilian Institute of Tax Planning) for Febrafarma, concluded, analyzing the period between 2000 and 2004, that the average tax burden was 35,07% in the final price of medicines. In the final considerations of this study, we highlight the following statements:

“Undoubtedly, by establishing a set of taxes that place a heavy burden on the final price of medicines, governments are failing to comply with the constitutional guidelines that deal with the protection of the lives and health of their citizens. Whatever degree of comparison is made with regard to taxation on medicines, there is an inconsistency in public policy. ”

"Brazil is the country in the world that charges more taxes on products aimed at protecting life and maintaining human health, as can be seen in the taxation on added value."

In 2007, PricewaterhouseCoopers released a study entitled: “Pharmaceutical Industry, growth opportunities and challenges for Brazil and other emerging countries” with the following observation regarding Brazil: “The tax burden is also seen as a significant barrier to growth the drug market in the region. Despite discussions to reduce taxes on medicines, Brazil still has one of the highest in the world. As in other sectors, the other emerging countries are much more competitive than Brazil in this regard. ”

Another very serious aspect is that such a tax burden ends up stimulating tax evasion, the sale of counterfeit drugs, stolen or without registration with Anvisa. In a recent article published by Isto É magazine on “False Remedies”, the executive president of the ETCO Institute, André Montoro, stated that “the enormous tax burden influences the increase in this black market.”

Therefore, it is concluded that a large dose of good tax sense must be applied urgently to solve this problem, which in addition to hindering access by raising prices, encourages illegal and criminal practices in clandestine markets. It is necessary to discuss an effective reduction of ICMS rates, which is comprehensive and not just punctual, and to reduce or eliminate the incidence of PIS and COFINS for all medications, and not only for those of the so-called “positive list”.

Alanac, as I believe all the entities representing the pharmaceutical sector, await the Government's call to participate and present suggestions for an adequate and effective solution to this problem, which makes medicines unnecessarily expensive, thereby making access to them more difficult.

Carlos Alexandre Geyer is President of Alanac - Association of National Pharmaceutical Laboratories.