Brazil wants to reindustrialize the pharmaceutical sector and attract foreign companies to invest in it

The elected Brazilian government of Luiz Inácio Lula da Silva wants to stimulate the reindustrialization of the pharmaceutical sector, make a specific tax reform for the industry and attract foreign companies to invest, official sources said yesterday evening.

Senator Humberto Costa, coordinator of the health area of Lula da Silva’s team and former Minister of Health during Lula’s first term in office, said that the pandemic showed the need for Brazil to have vital industries to produce equipment, medicines, and vaccines.

“It became clear during the pandemic that Brazil lost its autonomy and capacity to be self-sufficient in many strategic points,” he told the press and said there is a need to stimulate investments in the pharmaceutical sector. “It is a relevant thing,” he declared.

For Costa, drawing up a specific policy for the pharmaceutical sector requires tax incentives and specific tax treatment, something he said the Lula government would have to study.

“This would be within a tax reform to give this sector a differentiated treatment. It is possible to stimulate companies to invest in the north of the country, taking advantage of the biodiversity of the forests for the production of medicines,” he commented.

Brazil is highly dependent on imported products to manufacture medicines and vaccines, which makes drugs and treatments more expensive, such as cancer treatments (it is estimated that one-third of the cost is for the remedy).

Although it produces vaccines, around 80 percent of the products needed are imported.

In addition, the country has one of the highest tax burdens on medicines in the world, at about 31.3 percent, while the world average is 6 percent.

“The health area is important in the economic context, representing 9 percent of GDP and 10 percent of the formal labor force,” Costa commented.

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