Medicine and health plans are among prices that pushed inflation more in 2016

The prices of medicines and health plans have risen above inflation in 2016 and are among the contents that had a higher impact on the consumer price index (IPCA)-, which closed last year at 6.29%, according to released this Wednesday (11) the Brazilian Institute of geography and statistics (IBGE).
Prices for health and personal care recorded the greatest high among all groups of expenditure analysed for the calculation of this indicator. To 9.23% in 2015, the change happened to 11.04 percent in 2016, outpacing inflation of education (8.86%) and food and beverage (8.62%). The inflation of health and personal care was pulled mainly by the readjustment of the HMOs, 13.55%-the highest rate since 1997-and the drugs, which were 12.5% more expensive, the highest rate since 2000.
The numbers follow an uptrend which came also in 2015, when the two items also were among the most pressured inflation. In the period, the drugs also recorded high, in the case of 6.89%, and health plans had increased 12.15 percent.
"The medicines also had an increase greater than that granted by the Chamber and larger than in the previous year. This year, in addition to the adjustment have been greater, the GST on the price of drugs in several States also led to a larger than expected rate increase, "explained Eulina Nunes dos Santos, Coordinator of the IBGE''s price indices.
IBGE researcher does not believe that the above-average increases between the plans and remedies have heavy only in pockets of the retired and elderly, group that uses a lot of medical services and usually buy more medicines than the population average.
"Inflation is wicked for all. In the period of inflation, everyone loses. Both the elderly as the young, the student. Because we also had a strong indexing in colleges. I can''t say which was worse for this or that. Inflation is a bad country, "said Ange.

What companies say
The Interfarma, the association representing pharmaceutical laboratories in the country, says that prices in 2016 reflected the readjustment authorised by the Government in 2015, which "has suffered the impact of exchange rate fluctuations and energy expenditure".
"The medicines sector registers a lag in price adjustments authorized by the State of 29.7 percentage points since 2005, compared to the IPCA," added the Interfarma. The Association pointed out that the 12.5% adjustment applied in April was for the period between March and February 2015 2016 and 2017 which in March should be allowed a new price correction by CMED (Board of market regulation of Medicines). "Therefore, only this time a comparison with the data of the IBGE for the year 2016", he adds.
The Brazilian Association of Health plans (Abramge) said that accurate inflation by IBGE reflects a partial replacement of medical and hospital costs, which in 2015 was above 18%. According to Abramge, welfare expenditure in recent years have often grown more than revenue. "In 2016 these values amounted to 131.4 billion R$ record cipher. The per capita cost in 2016 with the medical and hospital care was also significantly higher than the previous years, reaching the value of 2,711 R$, a jump of 14.8%, "reported.
The Association also States that, since 2007, the sector has operated with operating margins of less than 1%. "The values of the tuition of HMOs is necessary to enable the continuity of care on the part of operators, whereas the incorporation of new technologies, the development of certain procedures in the NSA, the increased demand due to the ageing of the population, and other waste judicialization of health," he added.

Authorized adjustments in 2016
High of 12.5 percent in the prices of medicines and of 13.55% health plans verified by IBGE in 2016 shows that adjustments authorized by the Governments in these areas were passed on in full to consumers. In April 2016, the Government set at 12.5% the maximum adjustment to a universe of more than 9000 medicines with controlled prices. In June, the national supplementary health Agency (NSA) authorized 13.57% adjustment to the individual and family health plans.
According to the NSA, the methodology used to calculate the maximum annual adjustment of the individual/family plans is the same since 2001 and takes into account the average of the percentage adjustment applied by carriers collective plans agreements with more than 30 recipients. In the case of medicines, the adjustment is calculated on the basis of the IPCA and factors related to market competition, productivity and changes in the cost of inputs. According to the strong Interfarma high-dollar and electricity tariffs had strong impact on industry costs, which much of the raw material is imported.
"The readjustment for the 2015 suffered impact of exchange rate fluctuations and energy expenditure. Both had high expressive in the period and are set out in the official formula to calculate the adjustment, "says the Association.

Inflation targeting
By the system that exists in Brazil, the central target for 2016 was 4.5%, but, with the existing tolerance range, the IPCA would be between 2.5% and 6.5%, without which the goal was formally refused. In 2015, the index had advanced 10.67%. The latest estimate of financial market economists pointed out that the IPCA would arrive by the end of 2016 to 6.35%, according to the newsletter Focus, the BC.
After disclosure of the data of the IPCA, the President Michel Temer said at the opening of a meeting with Ministers, the result of inflation in 2016 was a "good news". He also stated that in 2017 the index must fall even more, getting close to the center of the goal, which is 4.5%.