PROVISIONAL MEASURE NO. 2.138-3, OF January 26, 2001

Defines regulation norms for the medicine sector, institutes the Parametric Formula of Adjustment Of Medications Prices- FPR, creates the House of Medicines and gives other arrangements.

THE PRESIDENT OF THE REPUBLIC, in the use of the assignment that confers it on art. 62 of the Constitution, adopts the following Provisional Measure, with force of law:

Art. 1º This Provisional Measure establishes standards of regulation of the medicine sector, with the purpose of promoting pharmaceutical assistance to the population, by means of mechanisms that stimulate the supply of medicines, the competitiveness of the sector and price stability.

Art. 2º Considerate companies producing medicinal products, for the purposes of this Provisional Measure, the industrial establishments which, operating on raw material or intermediate product, modify them in nature, the finishing, the presentation or the purpose of the product, generating, by means of that process, medications.

§ 1º Equipped themselves to drug-producing companies:

I-the importing establishments of foreign provenance medications that give way to these products; and

II -the establishments, albeit retailers, who will receive for marketing, directly from the apportionment that released them, medications imported by another establishment from the same firm.

§ 2º The medicinal product every pharmaceutical product is considered, technically obtained or drawn up, with prophylactic, curative, palliative or for diagnostic purposes, in the terms of the inciso II of the art. 4º of Law No. 5,991 of December 17, 1973.

CHAPTER I

OF REGULATION ON MEDICATIONS

Section I

Of The General Provisions

Art. 3º From 19 of December 2000 and by December 31, 2001, the drug-producing companies will observe, for the readjustment of their prices, the rules set out in this Provisional Measure.

Single paragraph. No elevations of drug prices will be allowed during the period from December 19, 2000 to January 15, 2001.

Section II

Of The Parametric Formula of Readjustment of DeMedicinal Prices-FPR and the Price Readjustment

Art. 4º The Parametric Formula of Readjustment of Prices of Medications-FPR, contained in the Annex, sets the parameters for drug price readjustments, as well as sets out the conditions determining the price regulatory regime of which it treats this Provisional Measure.

Single paragraph. The formula referred to in the caput will determine the maximum value of the Medium Price Readjustment-RMP for all drug-producing companies, to be allowed in January 2001.

Art. 5º Each drug producing company, ranked as per the difference, in absolute values, between its Average Prices of Prices-EMP and the Parametric Index of Medicinal Products-IPM, set out in the Annex, is to present to the Chamber of Medicines, by January 15, 2001, Report of Commercialization, containing:

I-EMP verified, for each company, in the period between August 1999 and November 2000, and the elements used in its calculation;

II-the difference, in absolute value, verified between the EMP and the IPM;

III-classification of the company as per § 2º of this article and, when couber, the readjustment of prices for each presentation of medicinal products that it intends to practise for the month of January 2001, respected the parameters set out in the following article;

IV-list containing the maximum prices of the producing company, for each one of the presentations of its medications, obtained from the parameters set out in this Interim Measurements;

V-documentation containing the information referred to in the art. 11 of this Provisional Measure, concerning the period elapsed between August 1999 a to November 2000.

§ 1º The prices set out in the list referred to in inciso IV should be accompanied by the discriminated values of the following tributes:

I-Contribution to the Social Integration Programs and Formation of the Public Server Heritage-PIS/PASEP;

II-Contribution to the Financing of Social Security-COFINS; and

III-Tax on Operations Relative to the Circulation of Goods and on Installments of Interstate and Intercity and Communication Services and Communication-ICMS.

§ 2º The drug producing companies will be classified into the following Groups:

I-Group I-comprised of the companies that have submitted EMP of the period equal to or greater than the IPM;

II-Group II-composed of the drug-producing companies that have submitted EMP of the period lower than the IPM.

Art. 6º In January 2001, fully complied with the requirement that it treats the caput of the previous article, the price readjustments of medications, allowed for each company, will observe the following criteria:

I-for the companies ranked in Group I will not be allowed price hikes;

II-for the companies ranked in Group II:

a) will be allowed RMP to the limit of the difference, in absolute value, between the EMP of each of the companies and the IPM of the period;

b) will not be allowed RMP greater than the value of the IPM;

c) the price readjustments, by presentation of medicine, the be effected in January 2001, they will not be able to exceed the value resulting from the multiplication by one integer and thirty five hundreth of the IPM, observed the limit set out in the "a" of this inciso.

Single paragraph. In any case, the prices of medicinal products should be readjusted in accordance with the readjustment rules set out in the Annex.

Art. 7º The maximum prices set by the companies, for each presentation of medicine, in January 2001, will not be able to be raised until December 31, 2001, the provisions of the inciso I of the art may be resussed. 12 of this Provisional Measure.

Art. 8º When there is the inclusion of new product presentations to the list of products sold by the company, the initial unit prices will not be able to exceed the average unit prices of the presentations already existing, and not to be raised until December 31, 2001.

Art. 9º When there is the inclusion of new products to the list of products sold by the company, the starting price could not be raised until December 31, 2001.

Art. 10. They shall be incorporated into the calculations of the prices of medicinal products of the companies subject to the regulatory regime of this Interim Measure the changes that occurred in the tributes referred to in § 1º of the art. 5º.

§ 1º When the amendment referred to in caput results in a reduction of tributes, the benefiting company is expected to effect the reduction in the prices of medicines hit by the new systematic, in the form established by the Chamber of Medicines.

§ 2º For the purposes of the special scheme for the use of the presumed tax credit instituted by the art. 3º of Law No. 10,147 of December 21, 2000 shall be exempted from the celebration of commitment to adjustment of conduct, provided for in that device, the companies producing medicinal products that comply with the systematic established by the Chamber of Medications in the form of this article.

Section III

From the Reports of Commercialization

Art. 11. They become the companies producing medicinal products obliged to submit to the Chamber of Medicines the Report of Commercialization, containing the relationship, by presentation, of the medicines sold by the company, the quantity sold of each product, its respective maximum and average prices, deducted from the tributes mentioned in § 1º of the art. 5º, values paid in salaries and charges, as well as gross and liquid billing with medications, without prejudice to other information necessary for the monitoring of compliance with the provisions of this Interim Measure.

CHAPTER II

OF THE CHAMBER OF MEDICATIONS

Art. 12. It becomes created the Chamber of Medicines with the following competencies:

I-judging the requests for extraordinary price readjustments;

II-decide by the exclusion of groups or classes of medicines from the Incidence of the regulation regime of which it treats this Provisional Measure;

III-define the documents to be submitted by the drug producing companies in the Marketing Reports, as well as the periodicity of the dispatch of the reports and the respective procedures for delivery and analysis;

IV-receive the Commercialization Reports of the drug producing companies;

V-regulate the reduction of prices of the medications that are the object of tax reduction;

VI-decide on the application of the administrative penalties provided for in the arts. 14 and 15 of this Provisional Measure, in the form of the regulation;

VII-elaboration of the internal regiment, by regulating its functioning, the criteria for granting extraordinary readjustment, as well as the procedures for presentation of the applications, instruction and judgment;

VIII-adopt the necessary measures for the fulfillment of this Interim Measment.

Art. 13. The Chamber of Medicines will be composed of the Council of Ministers and the Technical Committee.

§ 1º Compose the Council of Ministers:

I-the Head of the Civil House, who will preside over it;

II-the Minister of State for Justice;

III-the Minister of State for Farm; and

IV-the Minister of State for Health.

§ 2º Compose the Technical Committee:

I-the Secretary of Health Investment Management of the Ministry of Health;

II-the Secretary of Economic Law of the Ministry of Justice;

III-the Secretary of Economic Monitoring of the Ministry of Finance; and

IV-a representative of the Civil House, designated by the Chief of the Civil House.

§ 3º The decisions of the Council of Ministers shall be taken by unanimity.

§ 4º The Chamber of Medicines will have an Executive Secretariat, to be exercised by the Ministry of Health, with the following assignments:

I-receive the requests of the companies submitted to the scheme that treats this Provisional Measure, for the granting of extraordinary price increases;

II-instruct the applications, drawing up the decision proposals, which shall be submitted to the Technical Committee's assessment, as defined in internal regiment of the House.

§ 5º It is solely up to the Council of Ministers the competences referred to in the incisies I, II and VIII of the previous article.

CHAPTER III

OF THE FINAL PROVISIONS

Art. 14. The Company that contravenes the rules on elevation and price reduction of medicinal products set out in this Provisional Measure shall be subject to the administrative penalties provided for in the art. 56 of Law No. 8,078 of September 11, 1990.

Art. 15. The refusal, omission, deceptiveness, or unwarranted retardation of information or documents required pursuant to this Interim Measure constitutes infringement punishable with a daily fine of R$ 10,000.00 (ten thousand reais), and may be increased by up to twenty times, if necessary, to ensure its effectiveness.

Art. 16. They are convalidated the acts practiced on the basis of the Provisional Measure No. 2.138-2 of December 28, 2000.

Art. 17. This Interim Measure shall come into force on the date of its publication.

Brasilia, January 26, 2001; 180º of Independence and 113º of the Republic.

FERNANDO HENRIQUE CARDOSO

Silvano Gianni