Source: LegisCenter - SP - ARTICLES - 24/07/2009

The advance collection of ICMS for medications adopted by the São Paulo government may result in an increase in the prices of medicines in São Paulo, according to manufacturers, distributors and pharmacy chains heard by Folha.

The rise in drug prices may occur if the São Paulo State Finance Department maintains a rate of 68,59% applied on the drug's factory price to calculate the ICMS. This index, which has not yet been applied, according to the São Paulo Finance Department, was obtained based on information from taxpayers in the sector.

The indices applied today on the factory prices of medicines for the calculation of ICMS in the State vary from 38,24% to 41,38% - the same margins adopted by the Medicines Market Regulation Chamber, which establishes criteria for the definition and adjustment prices in the sector. However, the São Paulo State Farm has granted a deadline for the sector to present its price survey, which is being prepared by Fipe. This research will check what the real margins are - if the factory price is increased from 38,24% to 41,38% in the consumer price. In the survey of Fazenda São Paulo, carried out earlier this year, the average rate applied was 68,59%.

Guilherme Rodrigues Silva, deputy coordinator of the São Paulo Tax Administration, says that the sector should present its research for the calculation of ICMS by the end of September. "Let's wait."

"If the index adopted rises from 37%, for example, to 68%, the drug will become more expensive or the industry will have to reduce its margins," says Luiz Fernando Buainain, president of Abafarma, an association of drug wholesalers.

Founder and president of the Pague Menos pharmacy chain, Deusmar Queirós says that the best way to charge ICMS in the medicine sector is through the credit and debit system, when the tax is levied on all links in the chain through which the product passes - from the industry to the final consumer.

“What happens with this tax substitution regime is that I buy medicine for R $ 100, I pay tax on R $ 130, but I sell the product for R $ 120. This is not right. If the São Paulo government adopts a margin above 30%, it already harms the sector and consumers. The correct margin would be 20%, since the drug is an essential product ”, he says.