Informality can increase health care costs


Source: UOL Economy, 12/05/2008

SAO PAULO - According to André Franco Montoro Filho, executive president of Etco (Brazilian Institute of Competition Ethics), the dangers and losses resulting from illegal drugs are incalculable. For him, drugs manufactured without proper control, in addition to killing can delay and increase treatment costs.

The Medicine Tracking System, which is expected to be active in 2009, will guarantee the traceability of the product from its manufacture to the marketing of the product. With this, Anvisa (National Health Surveillance Agency) hopes to prevent counterfeiting and theft of cargoes of medicines, among other things.

According to calculations by the agency, the system should bring to the end consumer an increase of only five cents in drug prices.


For Montoro Filho, informality, in addition to reducing the government's investment capacity, causes unfair competition between companies and undermines economic growth. "The success of productive activities and economic growth depend on institutions, rules, uses and customs that provide adequate incentives, creating a good business environment", he says.

A study on informality in the pharmaceutical sector commissioned by the Etco sectoral medicines chamber from Mckinsey in 2005 showed that 23% of taxes due are withheld, 40% of the labor force in the sector is informal and 27% of drug sales they are made through the illegal exchange of products.