Money, Money, Money: Pricing System in Brazil
“In Brazil, pricing registration is a very formal, highly regulated process that sets the list drug price for the lifetime of the product. Manufacturers can appeal the decision, which delays the launch, and in extreme situations they might decide not launch the product at all.”
Today I’m speaking to Beatriz Coutinho, Head of HEOR, Pricing and Reimbursement at Amgen Brasil about, well, market access in Brazil. Unless you’ve been living under a rock for the past few years, you’ll be familiar with the importance Brazil holds within the Latin American region.
Their pharmaceutical market is the second largest in the ‘emerging’ world, with retail pharma figures reaching $24.8 billion last year. It’s not a market you can afford to ignore if you’re bringing your product to the region, and yet it’s a market that can be tricky to break into, and of course, the reimbursement process is a key element of this.
Once market authorization for your pharmaceutical product is granted, you’ll need to file for a list pricing registry, a process overseen by Pharmaceutical Market Regulation Council (CMED), which sets prices for the public and private sector. Prices are subject to annual review in March, and more than 60,000 commercial pharmacies in Brazil rely on mark-ups on medicines for their profits, with the prices set by CMED being the maximum price tag a pharmacists can put on a given medicine.
“The list price is the official, fixed price for a product. It might be adjusted annually according to some criteria depending on which market it's sold into, if it has a generic or not, but once you have a list price, it's a price for a lifetime of the product. Once you have a price you can launch the product in the market, and then think about future public reimbursement. The list price is public, and for the annual adjustments, we need to report our sales, including information on discounts,” Coutinho explained.
“When you request a price of the new drug and the CMED offer a very low price, you have the option not to launch the product, but this is not what the industry wants. Nevertheless, some companies have not launched their products because of this. In extreme situations some companies have already obtained their desired price through a lawsuit, but this is not ideal way to go, because you end up with a bad relationship with the committee, and this also delays the launch.” Coutinho said.
CMED sets the prices according to criteria contained in six categories a substance can fall under. Category I, consists of new patent-protected drugs that present better efficacy or safety profile compared to established treatments. The launch price is set by external reference pricing and must not exceed the drug’s lowest price in any of the following countries—Australia, Canada, France, Greece, Italy, New Zealand, Portugal, Spain, the United States, and the country of origin.
How much is good enough to be better? We don't have a measure, that's the key point.
“Few products have been considered category I so far because better efficacy is difficult to prove. It’s not always very clear, so it's a subjective criterion, subject to interpretation. How much is good enough to be better? We don't have a measure, that's the key point, and that's why the industry is struggling. Of course we have to present randomized clinical trials but the criterion is not transparent, and hopefully the committee agrees with [the manufacturer’s] case.”
Category II are ‘me-too’ drugs, where a cost minimization approach is used; category III is a new presentation of a drug already marketed by a given company, in the same dosage, where the price is worked out based on the arithmetic mean of the prices of previously launched products. Category IV includes new presentations of drugs already marketed by a company, but in a different dosage, and the launch price must not exceed the average price, weighted by sales, of available presentations of the drug that have the same active ingredients, strength, and dosage form. Category V consists of new presentations of a drug that is a new dosage form in Brazil or a new combination of active ingredients already available in Brazil. The launch price must not exceed the drug’s lowest price in any of the following countries—Australia, Canada, France, Greece, Italy, New Zealand, Portugal, Spain, the United States, and the country of origin; category VI consists of generic drugs that cannot have a launch price that exceeds 65% of the respective reference product’s price.
The current law regulating drug prices in Brazil was established in 2004, meaning that there are drugs on the market that don’t fall under the legislation. “What is happening now is that the CMED is being audited by a governmental organization (TCU) where they are comparing the list prices in Brazil with the nine countries outside, and they have found differences, and CMED has been asked to review its criteria for granting new prices and annual adjustments.”
What happens in Brazil is once you have the price it will usually increase, and what happens in other countries are price cuts.
Changes in legislation are expected, but their nature is yet to be determined. “The annual adjustment changes will be applied to all drugs, of course the drugs that have been recently granted new prices, recently launched; they won't have too much difference toward international prices because the comparison has been done recently. What happens in Brazil is once you have the price it will usually increase, and what happens in other countries are price cuts, so there must be increased gap between Brazilian list prices and the rest of the world,” Coutinho concluded.
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