Commission approves tax immunity for medicines

Source: Valor Econômico - 27/11/2012

The Senate Constitution and Justice Commission (CCJ) yesterday unanimously approved a proposal for a constitutional amendment (PEC) by Senator Paulo Bauer (PSDB-SC) that grants tax immunity to the drug production chain. PEC 115 now goes to the Senate floor, where, to be approved, it needs to receive favorable votes from three fifths of the 81 senators, in two rounds of voting.
Bauer said he will ask Senate President José Sarney (PMDB-AP) for the bill to be put on the agenda soon. "As it is the end of the year we may have some difficulties, but as this is a subject of great popular appeal, it is possible to create this possibility", he said. The tax waiver estimated with this measure is around R $ 17 billion. The Federal Revenue Service and the Ministry of Finance declined to comment on the approved constitutional amendment.
But Valor found that the government is completely against the proposal. The approval in the CCJ was more “a blind eye” than a “nap” of government senators. The government's strategy would be to block the bill in the Chamber, since the cost of fighting against such a proposal is higher in the Senate.
The government is against tax immunity, first, because of the loss of revenue, and then because the proposal could stir up discussions about favoring one state or another at a time when the government is trying to end the fiscal war, seeking to unify circulation tax rates. of Goods and Services (ICMS).
Technical note from the Ministry of Health, made at the request of Senator Bauer, raises data on the sector and shows that the tax burden on medicines in Brazil is around 34% on average, against 21% in Argentina, 6% in the Kingdom United Kingdom and 3% in France. Zero tax on the sector is a fact in the United States, Mexico and Canada. The world average is 6%.
The technical note also presents data from Ibope indicating that the drug market is expected to turn over R $ 63 billion in 2012. The main consumers will be in classes “B” and “C” demanding 80%.
The Ministry's opinion also points out, based on ISM Health data, that 71,4% of the disbursement for medicines is made directly by the population. In Europe, this percentage is 10% to 15%.
This happens even with the increase in the distribution of medicines by the government in recent years. IBGE data, compiled by the ministry, show that in 2009 - the last available survey - the government spent R $ 6 billion on medicines, while the population disbursed R $ 56 billion.
Both the Union of the Pharmaceutical Products Industry in the State of São Paulo (Sindusfarma) and the Association of the Pharmaceutical Research Industry (Interfarma) are favorable to such a project.
The chief executive of Sindusfarma, Nelson Mussolini, recalls that there is no way that the tax exemption does not reach the final consumer, since there is specific legislation that any tax reduction on medication is automatically passed on.
According to the executive president of Interfarma, Antônio Britto, there is a clear problem of access to medicines in the country. “We have reached the limit of this situation. Access is prevented due to taxation and this generates costs for the government ”, said Britto, noting that 54% of Brazilians do not undergo medical treatment as they should and one of the reasons is the price of medicines.
“The government selectively exempted automakers, white goods and other sectors. We hope that President Dilma and Minister Guido Mantega will have the sensitivity to evaluate drug issues, ”says Britto.
Britto further explains that among the largest share of these taxes is state. In Paraná, as always mentioned in these discussions, the rate has fallen from 18% to 12% since April 2009 and the government has seen an increase in revenue due to higher consumption. The highest tax on the sector is in Rio de Janeiro, with a rate of 19%. The experience adopted in Paraná is cited in the technical note from the Ministry of Health on PEC 115.
The conclusion of the technical note says that the proposal "is of paramount importance and extremely necessary". However, as it deals with tax exemption, it should consider the risk that a possible tax waiver may not translate into a reduction in resources destined to the Unified Health System (SUS). For the technicians of the Ministry of Health, it seems “more appropriate” the partial reduction of taxes, notably in the ICMS, as this would not bring much interference in the base revenue of the States.
"There remains the suggestion for a more in-depth study, which requires access to primary data, especially collection data, so that the fiscal impact of such a measure can be more accurately estimated", concludes the technical note suggesting that Fazenda and Anvisa also evaluate the question.

Alert: It is increasingly difficult to buy prescription drugs in Brazil

The high cost of the medicine prescribed by the physician remains the greatest obstacle to the population's access to the basic right to health, provided for in the Constitution. The weight of taxes on prescription drugs sold in Brazil exceeds that of 37 other countries that are part of the Organization for Economic Cooperation and Development (OECD) and the BRIC group.

According to studies compiled by the Association of the Pharmaceutical Research Industry (Interfarma), more than 71% of medicines are purchased directly by the population, a percentage much higher than the government's participation in the supply of medicines. In addition, when paying for the medicine at the pharmacy, 34% of the price of the medicine refers to 86 taxes on the product. For the executive president of Interfarma, Antonio Britto, "there is a direct relationship between the difficulty of access to the medicine and the weight of the taxes".

These and other data are contained in the publication “Tributos e Medicamentos”, which analyzes the tax structure of the pharmaceutical sector in Brazil and other countries. The work was launched on August 20 by Interfarma, during the Seminar “Medicamentos & Tributos”, held by the Association in partnership with the newspaper Valor Econômico. Organized by professors Eduardo Perillo and Maria Cristina Sanches Amorim, researchers in economics at PUC / SP, the book brings contributions from several researchers from Brazilian and foreign universities.

In his lecture at the event, Professor of Health Policies at Imperial College London, Nick Bosanquet, presented a survey on the weight of taxes in several countries, which clearly shows that the incidence of taxes on prescription drugs in Brazil is greater than 37 OECD countries and also other BRICS members. There are 86 taxes, fees and levies on products, whose rate reaches 28%.

"We are far from offering the social well-being provided by nations that, despite having higher tax burdens than Brazil, have high levels of return to the population from the taxes paid," said ETCO's chief executive, Roberto Abdenur, referring to to countries like Australia, Japan, Sweden, Switzerland and Finland.

During the event, Interfarma declared its support for initiatives that seek to reduce or eliminate taxes on the medicine in Brazil, such as the Parliamentary Front for the Reduction of Taxes on Medicines, a joint initiative of the Brazilian Association of Drug Distributors National Laboratories (Abradilan), the Brazilian Association of Wholesale Pharmaceuticals (Abafarma), the Brazilian Association of Pharmacy and Drugstore Networks (Abrafarma) and the Brazilian Association of Pharmaceutical Trade (ABCFarma).

In addition, Interfarma supports the Constitutional Amendment Proposal (PEC) authored by Senator Paulo Bauer, which exempts medicines for human use from taxes, and also the Bill of Congressman José Antônio Machado Regufe, which proposes the exemption of taxes on essential medicines.

Among all the taxes levied on medicines today, one of them is PIS / Cofins, a federal tax that is exempt for 65% of products with a medical prescription for chronic diseases. Interfarma claims that the government extends this exemption to all drugs. The entity also supports the reduction of State ICMS and interstate ICMS to a rate of 7%.

Brazil is a world leader in drug taxation

Folha de S. Paulo - 19/08/2012

Among 38 countries, Brazil is currently the record holder in the level of taxation on drugs sold in pharmacies under prescription.

The sum of the federal and state tax rates on the product, of 28%, is three times greater than the average obtained between the countries of the study. Some, like Canada, Mexico and the United Kingdom, have a zero rate on medicines.

The finding is from an unprecedented study by researcher Nick Bosanquet, professor of health policy at Imperial College, London, who considered consumption taxes in each of the countries.

In Brazil, ICMS, a tax charged by the governments of the states, and PIS / Cofins, charged by the federal government were accounted for.

The ranking is part of a publication by Interfarma (Association of the Pharmaceutical Research Industry), which will be released tomorrow.


The record level of taxation has a direct impact on consumers' pockets, since, in the Brazilian market, spending on medicines is not reimbursed by the State or by health plans, as occurs in developed countries.

In the Brazilian pharmaceutical market, whose revenue totaled R $ 42,8 billion in 2011, according to data from the IMS Health Institute, 71,4% of the disbursement is made directly by the population.

In European countries, 10% to 15% of spending is borne by the consumer.

"The consumer takes out of his own pocket to finance his treatment and still pays the highest tax in the world," says Antonio Brito, president of Interfarma. "The sum of the two situations is explosive."

The elimination of taxes on prescription drugs can increase sales by 2,5% to 5%, says the study.

This impact would occur mainly among low-income consumers.

IBGE data show that the disbursement of class E families for medicines is R $ 7 per month.

The richest spend R $ 97 a month, while the national average is R $ 38,60.

"These figures show that access to medicines depends exclusively on the Brazilian's income," says Brito.


According to the tax attorney Bruno Coutinho de Aguiar, from the Rayes e Fagundes office, the great villain of taxation in the pharmaceutical sector is the ICMS.

The state tax rate is, on average, 17%.

"An essential product such as medicine has a higher rate than that of automobiles, for example."

Marcelo Liebhard, director of economic affairs at Interfarma, says that, in many states, the amount collected with the ICMS on medicines is higher than the amount spent by the government on the distribution of medicines.

"This occurs in São Paulo, where R $ 3 billion in tax is collected."

According to experts, the impeding price increases the demands in court asking for the supply of medicines by the government. It is estimated that there are 200 lawsuits in the Brazilian courts with this type of request.

Senate approves national policy to combat piracy of medicines and cosmetics

Source: Agência Brasil - 13/06/2012

Marcos Chagas - Reporter for Agência Brasil

Today (13) the Senate overcame the first stage of creating a national policy to combat piracy of products submitted to Health Surveillance. The main focus is to integrate the various governmental actions to combat product piracy that must pass the screening of the National Health Surveillance Agency (Anvisa). A bill in this sense, authored by Senator Humberto Costa (PT-PE), was approved on a terminative basis by the Social Affairs Commission (CAS). Now, the matter will be analyzed by the Chamber of Deputies.

According to a survey by the World Health Organization (WHO), cited by the Brazilian Institute for Competitive Ethics (Etco), in Latin America, Southeast Asia and Africa it is estimated that 30% of the products sold on the market and used by the population have fraudulent origin. Anvisa, in turn, estimates this percentage at 20% in Brazil.

The data were presented by the rapporteur Vanessa Grazziotin (PCdoB-AM). She recalled that WHO estimates the percentage of counterfeit or adulterated drugs sold in developing countries like Brazil, Turkey, Russia and India at 25%.

The rapporteur cited, for example, the piracy of cosmetics, which has peculiar characteristics. “Illegal production occurs within the country's borders, in backyard factories or in small laboratories”. She added that production is closer to the places of consumption, which makes it difficult to intercept products. The senator cited that the complaints recently made about the use of formaldehyde (formaldehyde) in hair creams have brought to light some of the reality of the manufacture and illegal use of cosmetics in Brazil.

Clandestine drug factory discovered in Paraná

Source: 180 (Teresina - PI) - 23/05/2012

Counterfeit medications in Brazil are more common than you think and care should be taken when purchasing them.

International agencies estimate that up to 30% of the medicine sold in the country has problems. In the state of Paraná, known for having one of the most active health surveillance systems in the country, the civil police of that state discovered an illegal clandestine drug factory that operated in a farm on Estrada Bandeirante, in the rural area of ​​the city of Maringá.

There, three teenagers and a manager responsible for counterfeiting the products were apprehended. According to the police, the detainees forged 15 different types of medicines on the spot, which were sent to distributors in the states of Paraná and Santa Catarina. In total, the gang produced approximately 1200 pots of medicine and moved more than R $ 100 per month in the scheme.

At the scene, investigators found thousands of plastic jars, labels, empty capsules, cardboard boxes and other materials used to pack and distribute the drugs. According to the police, the suspects used the same substance to fill capsules with different types of drugs.

We warn drug users to always demand the invoice for the drug purchased and, in case of suspicion, contact Anvisa at the address: SIA Section 5, Special Area 57, lot 200, Block D, 1st Subsoil. Brasília - DF, CEP: 71.205-050. Or if you prefer, by calling: (61) 3462-6792 / 5786/6840 or by fax: (61) 3462-5772.

In any establishment caught with irregular drugs, those responsible will answer for the crimes framed in Art. 273 of the Brazilian Penal Code and will be subject to imprisonment that varies from 10 to 15 years.

One third of malaria remedies in the world are fake

Source: O Globo Online (Rio de Janeiro - RJ) - 22/05/2012

Counterfeiting causes resistance and failure to treat the disease, say researchers

An article published in The Lancet Infectious Diseases magazine shows that one third of the drugs used to contain the spread of malaria in the world are false. Researchers who analyzed 1500 samples of drugs taken from seven countries in Southeast Asia say the low quality of counterfeit drugs is causing resistance and treatment failures.

Another analysis carried out in 21 sub-Saharan African countries, with more than 2500 drug samples, showed similar results. American researchers at the Fogarty International Center, of the National Institutes of Health, who coordinated the work, believe that the problem may be even greater than the data suggest.

"Most cases may not be reported, or are reported to the wrong agencies, or kept confidential by pharmacists," write the researchers.

No far-reaching study on the quality of medicines has been carried out in China or India, countries that concentrate one third of the world population and are important points of medicine production.

"Between 655 and 1,2 million people die every year from the disease," the researcher who led the study, Gaurvika Nayyar, told the BBC. - Most of these deaths could be prevented if the drugs available to patients were effective, quality and used correctly.

The study says that the means of monitoring the quality of drugs against malaria is insufficient and that there is little knowledge among consumers and health professionals about treatments. There is still a lack of supervision of the production of these drugs, as well as punitive actions against counterfeiters.

Despite this, malaria mortality has fallen by more than 25% worldwide since 2000, and 33% in the African region. But the World Health Organization says that maintaining current rates of decline in the number of deaths is not enough to meet global goals for controlling the disease. And it makes a call to increase investments in diagnostic tests, treatment and inspection.

Invoice ride 2.0

Source: Info Exame (São Paulo - SP) - 22/05/2012

São Paulo - The Brazilian tax asylum offers a vast space for the performance of tax evaders. Only with regard to the tax on the circulation of goods and services (ICMS), each state has its own legislation, with a total of 3.500 rules in constant change.

In recent years, this tangle has become even more complicated with the worsening fiscal war between states and municipalities to attract companies and increase their revenue. It is easy to understand the appetite for ICMS. The tax collection has increased 33% since 2009 and approached 300 billion reais last year.

The main weapon used in the war is the offer to reduce the tax. As a result, there are more than 40 different ICMS rates in the country, varying from 4% to 25%. And what could be good - paying less tax - has become a fertile ground for crime.

The most applied scam is the tour of the invoice. A few years ago, scammers worked on real logistical engineering to defraud: departing from a producing state, goods traveled to states with less tax. The tour served to heat up the bill, registering the product as if it had been produced in the state that charges less tax.

Then, the good returned to the starting point, usually São Paulo, to be consumed. With the creation of the electronic note, a click on the computer became sufficient to issue the document - there are 180 million per month in the country. And then the 2.0 tour was born: the invoice virtually goes to other states, but the product does not move.

To simulate that something was produced in a distant state, just send the note over there and then do the reverse. By magic, the product “changes” in origin. "The difference in ICMS induces the dishonest to simulate a fictitious destiny", says Clóvis Panzarini, former coordinator of the São Paulo Finance Department.

Although some states and some companies can make gains from fraud, the country's economy can only lose. “The fiscal war promotes distortion in investment decisions, raises costs and harms companies that comply with the law,” says economist Paulo Rabello de Castro.

To try to end the war, the federal government is discussing with states the unification of interstate rates - today they are 7% and 12%. But the negotiation should take time. In the meantime, the note tour thrives, as shown in the following three examples, in the ethanol, medicine and steel markets.


Since 2007, to prevent fraud, the government has determined that the country's 16 refineries should centralize the collection of taxes on gasoline and diesel. Ethanol, however, because it is produced in hundreds of plants, has been left out - and has become the preferred target of dishonest distributors.

Fraudsters create distributors in states such as Goiás, where the ICMS rate is lower than that of São Paulo, the main producing state. "The scheme is set up with a company that is legally constituted, but in the name of oranges," says Alísio Vaz, president of the fuel distributors union.

The company only serves to simulate the passage of ethanol and issue the electronic invoice, obtaining the benefit of the lower tax. But only the note travels to Goiás. The fuel goes directly from the producer to service stations that participate in the scheme and, thus, offer ethanol at a low price - taking customers away from competitors who work in the legal sector.

The fraud, however, does not end on the note tour. Over time, fraudsters evade all taxes. When they are fined, they leave the distributor and start again with the name of another orange. Seven companies are currently under investigation - the National Petroleum Agency does not disclose which ones.

Pharmaceutical products

medicines are one of the products most affected by the invoice tour. The existence of 82 pharmacies scattered across the country - 000% of them small - and the sector's tight margins make it easier for the picks to act, as gains in the tax can increase the profit of traders.

Drug fraud is old, but it has recently incorporated technology. Until three years ago, the cargo and the paper invoice were a hit: they traveled from states that are producers, such as São Paulo and Rio de Janeiro, where the ICMS is heavier, even, for example, the Federal District, that takes a smaller toll.

Then, the cargo returned to its origin to be sold. Now, with a click on the computer, the electronic note is issued as if the cargo had completed the same path. The new scheme is called a merry-go-round: the bill makes a loop to reach the same place and the load is stopped. "The difference of a few percentage points encourages the wholesale banknote tour," says Ronaldo de Carvalho, owner of the Drogaria São Paulo chain.


Far from decreasing, the fiscal war between the states has evolved with new formats. What has gained more space recently is the offer of specific tax benefits for imported products. In ports like Itajaí, in Santa Catarina, and Vitória, in Espírito Santo, this started to be done to attract cargo from abroad and destined for other states.

Thus, a product that will be sold in São Paulo, instead of landing in Santos, uses a terminal in a state that charges lower ICMS. Companies that clear their imported products at these ports pay a small portion of ICMS to the state and receive a tax credit as if they had fully paid the tax.

The difference is charged to the destination state and turns into profit. In the steel distribution market, this new scenario of the fiscal war is leading to another trade-off: the international invoice tour. Dishonest distributors started to simulate that loads of Brazilian products came from countries like China or Italy.

But, in reality, only the invoice was issued electronically as if the steel had originated abroad. With the operation, the deceivers are able to sell steel at a price up to 8% cheaper than the market average, equivalent to 224 reais per ton.

"Depending on the tax credit obtained by the distributor in the port, the advantage in relation to the price of my product reaches 12%", says a businessman in the sector who asked for anonymity. The solution to end this type of coup is under discussion in the Senate: to define a single ICMS rate for imported goods.

"The port war sponsored by some states requires an urgent solution to end fraud such as the international tour," says Marco Polo Lopes, president of Instituto Aço Brasil.

Illegal drug market explodes on the internet

Source: O Globo (Rio de Janeiro - RJ) - 22/05/2012

Ministry of Health investigation lists 1,2 sites selling prohibited drugs and counterfeit products

BRASILIA. A work commissioned by the Ministry of Health found that companies that operate a parallel market on the internet for the illegal sale of medicines, appetite suppressants, anabolic steroids, abortions and blue prescription make criminal use of official logos. It was even identified a false profile of the Minister of Health, Alexandre Padilha, on Twitter. These are some of the results of the detailed survey "Digital inspection: threats are collective health on the Internet", which lasted a year, and was commissioned from a private company specialized in this digital area.

The study was handed over to the ministry in March. On the internet, criminals use symbols and logos of services and products from the Ministry of Health and deceive consumers with advertisements that the drugs are registered by the National Health Surveillance Agency (Anvisa).

The existence of 1,2 illegal sites, of the most varied, was counted. Of abortion drugs, especially Cytotec, 359 sites were identified (30% of the total); of appetite suppressants, 382 (32%); anabolic steroids, 258 (22%); herbal medicines, 159 (13%); and sales of blue revenue, 41 sites (3%).

In the case of abortion, the company hired to perform this scan on the internet comes to calculate that the cost of hospitalizations for problems resulting from the use of Cytotec reaches R $ 13,4 million per year. The illegal billing with anabolic steroids, in the period of one year of measurement, was estimated at R $ 153 million. With anorectic, the illegal market would have revenues of R $ 82,4 million.

According to the study, the sites sell illusions, in addition to unregulated products that generate health problems. The work concluded that there are, on social networks, "online drugstores", with criminal practices. “The physical and the virtual are mixed: medical consultations are made online, counterfeit drugs are purchased over the internet and sent to real addresses. The pharmacy that sells controlled products without a prescription is on the network ”, says the work's conclusions. “The internet is an escape valve: it is the communication channel between the individual and the criminal network that allows anonymity. The counterfeit drug industry is fueled by the search for banned drugs, the lack of inspection on the Internet, prices below the regular market, and the population's lack of information ”.

The authors concluded that part of the public health problems in Brazil is, in some way, associated with the internet: illegal abortions, purchase of counterfeit drugs, intoxication by counterfeit drugs and development of diseases due to the ingestion of drugs without medical supervision.

The work monitored the main brands of the Ministry of Health, such as UPA, Popular Pharmacy, Family Health, SUS and Samu. The products are presented like this on the internet: “Cenaless, the secret to your weight loss. Assists in the search for the beautiful body. Perfect butt: appear on the beach with a body that causes envy ”. And says that the product is approved by Anvisa, which is not true.