Author: Carlos Alexandre Geyer

Source: Bem Paraná - PR - OPINION - 13/08/2009

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

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 ten billion reais in taxes must have been collected on medicines sold in the country. And we know that this transfer of income to the public sector has not resulted in an equivalent benefit for the needy population, given the amounts spent by health managers on the purchase of medicines, which systematically over the years has 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 by 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 burden the final price of medicines too much, governments are in breach of the constitutional guidelines that deal with the protection of the lives and health of their citizens.

Regardless of the degree of comparison made with 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 the growth of 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, Andre Montoro stated that “the huge 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 drugs, and not only for those of the so-called “positive list”.

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

Carlos Alexandre Geyer, CEO of ALANAC