PROVISIONAL MEASURE NO. 2.130-1, OF December 27, 2000.

Defines regulation standards for the drug sector, institutes the Parametric Formula of Adjustment Of Medications Prices- FPR, creates the Chamber of Medicines and gives other arrangements.

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

Art. 1º This Interim Measles 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, through mechanisms that stimulate the supply of medicines, the sector's competitiveness 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 the nature, finishing, presentation or 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, which they receive for marketing, directly from the apportionment that released them, medications imported by another establishment from the same firm.

§ 2º The considered medicinal product every pharmaceutical product, technically obtained or elaborated, with prophylactic, curative, palliative purpose or for the purposes of diagnostics, 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 General Provisions

Art. 3º As of December 19, 2000 and until December 31, 2001, the drug producing companies will observe, for the readjustment of their prices, the rules set out in this Interim Measment.

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

section ii

From the Retrofit Parametric Formula of Medicare Prices? FPR and Price Readjustment

Art. 4º The Medication Price Adjustment Parametric Formula-FPR, contained in the Attachment, sets the parameters for drug price readjustments, as well as establish the conditions determinants of the price regulatory regime of which it treats this Provisional Measure.

Single paragraph. The formula referred to in 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 producing company of medications, classified as per the difference, in absolute values, ente its Average Price Evolution-EMP and the Parametric Index of Medicines? 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 price readjustment for each presentation of medicines 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 company prices producer, for each of the presentations of its medicinal products, 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 shall be accompanied by the discriminated values of the following tributes:

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

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

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

§ 2º The companies producing drugs will be classified in the following Groups:

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

II-Group II-composed of the companies Producers of medications that have submitted EMP from the lower period to 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 the Group II:

a) will be allowed RMP up to the limit of the difference, in absolute value, between 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) price readjustments, by presentation of medications, to be effected in January 2001, will not be able to exceed the value resulting from the multiplication by one integer and thirty five hundredths of the IPM, observed the limit set in paragraph? a? of this inciso.

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

Art. 7º The maximum prices set by the companies, for each presentation of medicinal products, in January 2001, they will not be able to be elevated 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, initial unit prices will not be able to exect to the average price unitary from the existing presentations, and nor to be elevated 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 cannot be high by 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.

Single paragraph. 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.

Section III

Of The Commercialization Reports

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 wages and charges, as well as gross and liquid invoicing with medications, without prejudice to other information necessary for the follow-up of the compliments of 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 subject of tax reduction;

VI-decide on the application of the administrative sanctions 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 compliments of this Interim Measment.

Art. 13. The Chamber of Medicines shall be composed of the Board of Minister and the Technical Committee.

§ 1º Compose the Council of Ministers:

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

II-o Minister of State for Justice;

III-the Minister of State for Finance; and

IV-the Minister of State and 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 Economic Monitoring Secretary of the Ministry of Finance; and

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

§ 3º The declines of the Board of Minister will be taken unanimously.

§ 4º The Chamber of Medicines will have a 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 it treats this Provisional Measure, for the granting of increases extraordinary pricing;

II-instruct the requests, drafting the decision proposals, which will be submitted to the Technical Committee's appreciation, as defined in internal regime in the House.

§ 5º Compete exclusively to the Council of Ministers to the competences referred to in the incisels I, II and VIII of the preceding article.

Chapter III

Of The Final Provisions

Art. 14. The company that contravenes the rules on elevation and price reduction of medicines 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. 2,063, of December 18, 2000.

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

Art. 18. The Provisional Measure No. 2,063, of December 18, 2000.

Brasilia, December 27, 2000; 179º of Independence and 112º of the Republic.

Fernando Henrique Cardoso

José Gregori

Pedro Malan

José Serra

Attachment

1-PARAMETRIC FORMULA OF DRUG PRICE READJUSTMENT-FPR:

1.1) If EMP> =IPM then:

a) RMP= 0; and

b) Price January 2001