I had expected the official prices for Afrezza to be released in the October update from CMED put that didn’t happen. The official web site gets updated on the 1st of the month (or a few days later) so we will have to wait for November.
It took me a while to figure of the various prices and how pricing works in Brazil so I wrote the summary that follows and I will go ahead and post this even in the absence of officially announced Afrezza pricing. There may be some minor errors in this description since I don’t speak Portuguese, but it should be substantially correct. Prices are set by an agency of the government that goes by the acronym of CMED and these official prices are adjusted once a year in March (prices can go up or down, but usually down assuming neutral exchange rates). ANVISA is like the FDA, they are the regulator that decides if a drug may enter the Brazilian market, but once a drug is approved to be sold CMED regulates the price. CMED sets three different prices:
PF (Factory or Wholesale Price): This is the maximum price that can be charged by the manufacturer or importer to a pharmacy. Private pharmacies and private hospitals will pay this price unless the manufacturer decides to offer a discount. The other two prices can be computed directly from the basic PF as described below. PF is the price that Biomm will receive for most Afrezza sales and this price will be divided between Biomm and Mannkind. Most international distribution agreements are written to guarantee the foreign distributor a modest profit, typically about 5% of sales before income tax. The wholesale price (PF) must cover the selling expenses of the distributor (Biomm), the distributor profit, import duties, and international transportation costs with the excess going to the manufacturer (Mannkind). Most of the economic risk is on the manufacturer in these deals, but the manufacturer enjoys most of the economic upside as well. Future changes in PF will have minimal impact on Biomm and will be substantially absorbed (whether good or bad) by Mannkind.
PVMG (Government Price): This is the maximum price that can be charged to any government entity (national or state). The PVMG is 20.16%% lower than the PF, so if the wholesale price charged to a retail pharmacy is $1.00, then a government entity pays about 80 cents. This 20% discount is compulsory on all medicines purchased by government entities and that would include any Afrezza sales.
PMC (Maximum Consumer Price): This is the maximum retail price that pharmacies can charge consumers. The price covers the wholesale price (PF) plus an allowed pharmacy profit of 38.2% plus ICMP and PIS taxes. ICMP is a sales tax, but unlike the US where sales taxes are added to the selling price at the checkout register, the sales tax is included in the selling price. The ICMP rate is between 17 20% depending on the state (18% is most common), and two states have a reduced tax rate of 12% for generic drugs. The PIS is an extra tax of 15.9% imposed on imported drugs which gives locally produced generic manufacturers an automatic price advantage over branded import products. Afrezza will be subject to both the ICMP and the PIS taxes.
Most Brazilians buy their prescription drugs at the local pharmacy and pay the PMC for their state. Patients that are poor can get some medicines free from the government, but since the government buys at a 20% discount to the normal wholesale price this is not necessarily good for manufacturers. The government owned or subsidized pharmacies, the “Farmácia Popular” or Popular Pharmacies, have a limited selection and most of the drugs are low priced, locally produced, generic drugs. There are several government owned drug factories the largest of which are Farmanguinhos (Rio de Janeiro) and Fundação para o Remédio Popular (Sao Paulo), that produce about 80 critical generic medicines. These are the drugs that make up the bulk of the government formulary. Patients with qualifying chronic diseases, including diabetes, are also eligible for free drugs from the Farmácia Popular. The insulins from the government owned producers have no PMC price because they are sold only to the Farmácia Popular and are intended only for free distribution.
Some posters have made a big deal out of the fact that diabetics and other patients with certain chronic conditions are entitled to free drugs, which is true to an extent, but patients are only entitled to the specific drugs listed on the government formulary. For diabetes the formulary is just six drugs (one form of glyburide, two dosages of metformin, one long acting form of metformin, one NPH injectable insulin, and one recombinant injectable insulin). The insulins are supplied in the typical 100U / 10ml multidose vials.
The government owned drug manufacturers have a PF price for a 10ml vial of NPH insulin of 21 Brazilian Reals, which is about $5.00, and a vial of recombinant insulin of 31 Reals, which is about $7.50. When these are sold to the Farmácia Popular, the sales are eligible for the compulsory government discount making the net government purchase price (PMVG) $4.03 to $5.95 per vial; some states exempt these sales from ICMP tax and some do not. The other ANVISA approved insulin products, such as basal insulins and rapid acting formulations, are not on the government formulary so don’t expect to see Afrezza listed either. Since foreign suppliers cannot compete with the ultra cheap prandial insulin products, most of their business relies on rapid acting formulations and value added products such as pre filled injector pens. These products are probably the best comparison for Afrezza as the foreign importers are subject to the same regulations as Mannkind.
Biomm has a locally manufactured biosimilar to Basaglar that was award a price about 30% higher than the Sanofi price for Lantus, and because the Sanofi product is imported Lantus is also subject to the PIS tax. Government policy in Brazil is designed to make the country self sufficient in the production of critical medicines without the need for any imported drugs to satisfy those needs. The fact that Biomm got a premium over Lantus for a biosimilar is reflective of the desire of the government to keep their limited foreign exchange reserves in the country rather than see them go to foreign drug companies. Biomm will likely not get such preferential pricing treatment on Afrezza since it is not manufactured in Brazil. Price controls are as much about conserving foreign exchange reserves as they are about controlling healthcare costs so foreign companies will always be at a disadvantage.
Relatively few Brazilians have private health insurance, only about 20% of the population have comprehensive health insurance comparable to a typical US plan, and the vast majority of insurance plans only cover prescription drugs administered during a hospital stay. If a free drug is not available from the Farmácia Popular, the consumer pays the PMC price at their local pharmacy for the drug of their choice. Since few insurance plans cover outpatient drugs the PMC represents an out of pocket expense for the patient but, in countries with price controls the economic burden on the patient is much less than in the US. If you compare the dollar based PMC 20% column in the table to the GoodRx price, you can see that the full retail price, including taxes, of drugs in Brazil is generally 10% to 30% of the lowest GoodRx price, which is presumably stated before state and local sales tax.
There are more than 120 different insulin formulations and dosages available in Brazil so I am not going to list them all, but the ones shown in the table below are probably the most relevant comparisons. If you want to see the complete list of drugs, the latest PMC and PMVG spreadsheets can be downloaded in Excel format from this link:
portal.anvisa.gov.br/listas-de-precos. To find competitive products search the first column of the spreadsheet for the phrase “insulina” since the sheets are arranged by active ingredient.
Note that the first three products listed in the table below are locally manufactured for sale to the Farmácia Popular so there is no PMC price, just a PF and PMVG. The first three columns are prices in Brazilian Reals while the last four are in US Dollars (the exchange rate is 1 Real to 0.24 dollars). The PMC prices shown are for the State of Rio de Janeiro where the local ICMP sales tax rate is 20%; the PMC for other states will be slightly lower. Finally, the last column is the lowest price shown on the GoodRx site for the comparable product, and that price includes the effect of a discount coupon is some cases.
