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Proposal in Brazil to exempt medicines from tax Posted 21/03/2014

The Brazilian Government announced on 9 February 2014 that it is setting up a committee to evaluate whether to exempt medicines from tax in the country.

The joint committee will be set up in order to speed up the analysis process and provide an answer on the Proposal (PEC 301/13), which would ban taxes on pharmaceutical drugs and ingredients used in production and marketing.

The proposal on tax exemption of medicines was organized by the Parliamentary Front for the Tax Exemption of Medicines, with the campaign being organized by the Brazilian Association of Pharmacies and Drugstores Networks (Abrafarma) in partnership with the Association of Pharmaceutical Industry Research (Interfarma).

The proposal was introduced to the Brazilian House of Representative as a constitutional amendment, by Mr Francisco Chagas. The following arguments have been stated as reasons for the introduction of this proposal:

• To put an end to different tax rates on pharmaceuticals between different states in Brazil
• To encourage the creation of an industrial policy to strengthen the pharmaceutical sector in Brazil (national production is currently less than 10%)
• To generate technology, jobs and investment
• To provide savings to patients when buying medicines, estimated at BRL 19 billion

Taxes on pharmaceuticals in Brazil are currently estimated by Abrafarma and Interfarma to be around 33.9%, which represents more than a third of the final price paid by consumers.

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