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Global Health Econ Sustain Impact of new drug indications in Brazil

following their initial registration. Policymakers must be aware of these challenges and consider them in health-
care policy development and decision-making processes.

Keywords: Budgetary impact; Drug indications; Pembrolizumab; Trastuzumab deruxtecan; Health-care systems; Financial
sustainability

1. Introduction both individuals and legal entities in Brazil can deduct
health-related expenses from their taxable income (Cruz
The pharmaceutical landscape has undergone a massive et al., 2022).
transformation driven by the emergence of new technologies.
In 2020, the global pharmaceutical manufacturing market The pharmaceutical market in Brazil is subject to
was valued at USD 405.52 billion and is projected to grow national economic regulation, with State intervention. Since
at a compound annual growth rate of 11.34% from 2021 the 1970s and 1980s, price control measures, including
to 2028. Latin America accounts for an average of 4% of price freezes, have been in place. In 1999, a parliamentary
this market’s value, with Brazil alone representing 2% of the inquiry commission conducted an investigation, which
global pharmaceutic market (Grand View Research, 2023). revealed market failures in drug pricing and resulted
Brazil’s comprehensive public health system offers in significant price hikes. Subsequently, new legislation
coverage to all legal residents of the country through the was enacted to regulate drug prices in Brazil, and these
Brazilian National Health System (SUS), ensuring universal regulations remain in effect today (Dos Santos Dias et al.,
health coverage nationwide. This system operates on a 2019; De Farias & Pinto, 2021; Viscusi et al., 2005).
decentralized approach, with administrative responsibilities At present, drug pricing in Brazil follows Resolution
shared among the federal, state, and municipal levels of No. 2 of the Brazilian Drug Market Regulation Chamber
government. Health-care services are primarily managed (CMED), dated March 5, 2004. Pricing decisions depend
at the state and municipal levels. The Brazilian constitution on the drug indications. If the clinical conditions lack
guarantees the right to comprehensive healthcare at all therapeutic alternatives or the drug offers proven
levels, encompassing primary, secondary, and tertiary therapeutic benefits supported by scientific literature, such
care. The SUS provides an extensive range of services free as increased efficacy, effectiveness, or reduced adverse
of charge, including preventive services, primary care, events, the pricing is determined based on the lowest
outpatient care, inpatient care, maternity care, mental international retail prices. These prices are taken from
health services, pharmaceuticals, dental care, vision countries listed in Section VII of Article 4 (Australia,
care, and physical therapy. Importantly, these services Canada, Spain, the US, France, Greece, Italy, New Zealand,
are accessible to both residents and visitors, including and Portugal) and the manufacturer’s price of the product’s
undocumented individuals (Columbia University Mailman original country (excluding taxes incurred). Consequently,
School of Public Health, 2020). medicines without therapeutic alternatives generally have
It is important to note that the health-care system in higher prices (CMED, 2004).
Brazil consists of both public and private sectors, which However, when these specific drugs expand their
operate independently from each other. Public hospitals indications, the current resolution does not account for a
in Brazil offer free, high-quality care to patients, despite revision of their prices. The expansion of indications has
often facing challenges such as overcrowding and long wait a significant budgetary impact due to the increase in the
times. However, these public hospitals may also lack certain eligible population. Furthermore, after initial pricing, an
amenities commonly found in private facilities, such as air annual price upgrade occurs, following the price cap model.
conditioning or specific medical equipment. While free This model is based on a maximum adjustment formula
care is available to everyone, including foreigners, many that considers a general inflation index of the economy,
individuals prefer to seek services from private providers, with discounts or increases varying depending on the
which require payment. Private health insurance in Brazil
is voluntary and serves as a supplementary option to the competition in the drug’s market segment (CMED, 2004).
SUS. Approximately 23% of Brazilians have private health Being the biggest public health-care system worldwide,
insurance plans, which grant them access to care at private the Brazilian National Health System (SUS) encounters
facilities. Most individuals with private health insurance the issue of scarce resources, and its ability to continue
receive it as a benefit through their employers. In addition, functioning depends on the judicious regulation of

Volume 1 Issue 1 (2023) 2 https://doi.org/10.36922/ghes.0994