Brazil May Buy Locally-Made Drugs at Premium-Report

Brazilian medical equipment and drug makers will be able to charge up to a 25% premium on government purchases as part of a plan to cut dependence on foreign supplies, a newspaper reported on Monday.

The government wants to use its growing clout to negotiate discounts with foreign producers of medical equipment to reduce prices or, in the best case, get them to manufacture the equipment in Brazil, Valor reported, citing officials familiar with the situation.

Worried about an $11 billion trade deficit in the industrial health sector in 2011, Brazil's Health Ministry will use part of its 92.1 billion reais ($49.59 billion) budget to encourage new investments in biotechnology and research and development, Valor said, citing Health Minister Alexandre Padilha.

The government expects to define the so-called premium for some medicines by the end of next month, Zich Moyses, head of the ministry's innovation industrial center, told the newspaper. The ministry's budget for this year is 16% higher than that for 2011, the newspaper said.

The plan comes as the government is keen to reduce dependence on foreign supplies of equipment and medicines. In recent years, foreign drug makers have stepped up acquisitions of local laboratories as some patents for their best-selling patent drugs expire.