Brazil Healthcare System | How Brazil's healthcare work? Funding | How are drugs approved and reimbursed? | iPharmaCenter

Overview of Brazil Healthcare System

According to data from the Brazilian Federation of Hospitals (FBH) and the National Confederation of Health (CNSaúde), out of the 7,191 hospitals in Brazil, 62% are privately owned.

The Unified Healthcare System (SUS) in Brazil serves as the primary healthcare provider for roughly 72% of the population, as reported by the Brazilian Institute of Geography and Statistics (IBGE). SUS not only offers medical diagnostics and treatment but also distributes free medications for certain chronic conditions and spearheads national vaccination initiatives, primarily targeting the elderly and children.

Funding for Brazil Healthcare System

Funded through tax revenues and contributions from federal, state, and municipal levels, Brazil's decentralized and universal public health system ensures comprehensive care.

The administration and provision of healthcare services are managed by municipalities or states. This system provides free, extensive services to all residents and visitors, including undocumented individuals, covering primary care, outpatient speciality services, mental health, hospital care, and prescription medications.

About 25% of Brazilians, predominantly those with middle and higher incomes, opt for private health insurance to avoid delays in receiving care. Costs related to private health insurance and other health-related expenses can be deducted from taxes.

In 2015, Brazil's healthcare expenditure was 9.1% of its gross domestic product (GDP), with public spending making up 42.8% of this total. The Unified Healthcare System (SUS) provides comprehensive healthcare services to all residents and visitors, including undocumented individuals, without requiring any application process.

Around 75% of Brazilian citizens depend exclusively on SUS for their healthcare needs.

Issues with access and dissatisfaction with the services have led middle- and high-income families to seek private healthcare options.

Public health insurance

Private health insurance in Brazil

Private health insurance in Brazil is optional and serves as a supplement to SUS, regulated by the National Agency of Supplementary Health. In 2018, 23% of Brazilians had private medical and hospital insurance, while 9.6% had dental insurance. Nearly 70% of these private insurance beneficiaries receive their coverage as part of their employment benefits.

Private health plans deliver services either through their own facilities or through accredited healthcare organizations. Alternatively, these plans may reimburse enrollees for healthcare services they purchase.

Out-of-pocket spending for healthcare in Brazil

Out-of-pocket spending accounts for just over 27% of total health expenditures, imposing a significant financial burden on households, especially affecting the poor.

In 2014, 5.3% of households faced such high health costs that they had to sacrifice spending on non-health-related items. The high cost of medications was a major factor, as only specific drugs are provided free of charge under SUS.

Physician Education and Workforce

In 2018, Brazil had a total of 451,777 licensed physicians, equating to 2.18 doctors per 1,000 residents. Approximately 63% of these physicians were specialists, while the remaining 37.5% were general practitioners.

The number of medical schools in Brazil is rapidly increasing, primarily due to the establishment of private institutions. In 2017, there were 289 medical schools, providing over 29,000 training slots.

Primary Care of Brazil Healthcare System

The Family Health Strategy, launched in 1994, serves as the national policy for expanding primary care within the SUS framework. This approach employs family health teams, each comprising a doctor, a nurse, a nurse assistant, and up to 12 community health workers. These teams are responsible for the healthcare needs of 2,000 to 4,000 people within a specific geographic region. Additionally, dental health teams, consisting of one dentist and one or two dental assistants, may also be assigned to serve these populations.

The growth of primary care has led to an increase in outpatient visits and a subsequent decrease in hospital admissions. Within the SUS, Brazilians have direct access to primary care and emergency services, though referrals are needed for outpatient specialities and hospital services.

However, the quality of primary care services has been a significant issue. To tackle this, the federal government implemented a pay-for-performance program for family health teams in 2011.

In the private insurance sector, health plans are beginning to offer access to family doctors without copayments as an alternative to specialist visits, a policy promoted by the National Agency of Supplementary Health.

Outpatient Specialist Care

Speciality care services are managed by state or municipal governments, which handle both service provision and provider payments. Outpatient speciality care is typically associated with hospital care and can be offered in various facilities, ranging from specialized ambulatory care centres to polyclinics with multiple specialities. These services can be provided by public entities or private facilities, with the majority being in the private sector.

Patients can access outpatient specialists through SUS after hospital discharge or with a referral from a primary care physician. The federal government reimburses states or municipalities based on the volume of specialist services provided, and these services are usually paid for on a fee-for-service basis. The fees follow the national SUS procedure list, which often falls below the actual service costs. For instance, the fee for a specialist consultation is less than BRL 10 (USD 2.33).

Specialists working in the public sector are allowed to practice privately and treat private patients as well.

Hospitals

While the federal government supports the financing and delivery of services in federal hospitals, the responsibility for contracting and reimbursing hospital services lies with the state or municipal government.

• In 2015, Brazil had 6,154 hospitals, both general and specialized, with a total of 443,257 beds, 71% of which were within the SUS system. Of these hospitals, 38% were public and 62% private

• Among public hospitals, 4% were federally owned, 25% were state-owned, and 70% were municipality-owned

• Among private hospitals, 38% were nonprofit, while 63% were for-profit.

Inpatient Care Funding Mechanisms

Brazil's inpatient care is funded through two primary mechanisms.

• First, the federal government projects the number and nature of hospital admissions required for each municipality or state, taking into account population needs, existing infrastructure, and historical data.

  • Payments are predetermined for various diagnoses, including a set package of procedures and an expected length of hospital stay for each diagnosis. Based on these projections, the Ministry of Health allocates funds to the states or municipalities, which then reimburse hospitals on a fee-for-service basis.

• The second mechanism involves funding for high-complexity procedures. Facilities that perform advanced procedures, such as chemotherapy or provide high-cost medications, are reimbursed under this system.

  • The Ministry of Health directly compensates municipalities or states based on the volume of complex services rendered, and these local governments, in turn, pay the service-providing facilities.

Both payment systems adhere to the national list of SUS procedures, which is infrequently updated. This lack of regular updates causes distortions in relative pricing. To partially address this issue, the Ministry of Health has introduced performance-based incentives for hospitals owned by states or municipalities. These incentives aim to meet specific goals, including the integration of hospitals with other healthcare providers.

Drug Pricing

Brazil establishes new drug pricing framework under CMED Resolution No. 3/2025

The Drug Market Regulation Chamber (CMED) has introduced Resolution CM/CMED No. 3/2025, creating an updated regulatory structure for determining medicine prices in Brazil. This new framework replaces the prior rules that governed pharmaceutical pricing for more than 20 years. It brings substantial revisions to how medicines are categorized, priced, and managed from an administrative perspective for companies operating in the Brazilian market.

Restructuring of medicine price regulation

The new regulation modernizes the existing price control system by redefining classification standards and introducing fresh drug categories. It sets updated parameters for calculating the Factory Price (PF) based on product’s level of innovation, the availability of comparator drugs, and overall market competition.

One of the most notable changes is the formal acknowledgment of incremental innovation as a key factor in price determination. This recognition could encourage pharmaceutical companies to invest in new formulations, dosage forms, combinations, or delivery routes. Moreover, Resolution No. 3/2025 outlines tailored pricing criteria for biologics, biosimilars, and generic medicines, as well as guidelines for price reassessment when a marketing authorization changes ownership.

Strengthened role of the Price Information Document (DIP)

The regulation enhances the importance of the Price Information Document (DIP), making it a mandatory prerequisite for defining a medicine’s price. The DIP must now be filed with CMED after submitting the marketing authorization request to the Brazilian Health Regulatory Agency (ANVISA) but before ANVISA publishes its final decision.

Category	Category description	Pricing rule
Category 1	A medicine newly introduced in the country that contains an active pharmaceutical ingredient (API) not previously marketed locally and that provides a superior therapeutic benefit compared with existing treatment options.	The factory-level price must be set at or below the lowest price identified in the selected group of reference countries, with the addition of any applicable taxes. In situations where no international price is available in those reference markets and the product, including its manufacturing process and development, is carried out in Brazil, CMED may define a maximum allowable price (PF) for medicines in this category, using a justification submitted by the company and assessed by CMED.
Category 2	A medicine recently introduced in the country that contains an active pharmaceutical ingredient (API) not previously available domestically, but that does not provide additional therapeutic benefit when compared with existing treatment options.	The maximum selling price (PF) will be calculated using the treatment cost of the chosen comparator medicine as the basis, and it may not be higher than the lowest price observed in the designated reference countries. In addition, the sole paragraph clarifies that the total treatment cost of this product must not surpass the treatment cost of the comparator medicine.
Category 3	A medicine that incorporates an incremental improvement, which may include: (a) a new fixed-dose combination; (b) a new product containing a single active substance; (c) a different route of administration; (d) a modified strength; (e) an alternative dosage form; (f) redesigned or updated packaging; or (g) another type of incremental modification.	The PF (proposed price) will be determined from the value suggested by the manufacturer, as long as all of the following conditions are satisfied: the product delivers some additional advantage to the production process, the development and manufacturing take place in Brazil, and it is introduced into a relevant market whose Herfindahl Hirschman Index (HHI) is below 2,500, calculated per API and including only companies belonging to different economic groups. For an incrementally modified medicine that does not provide added therapeutic benefit, the allowed PF (product price) must not be higher than the PF of the original reference product from which the incremental change was derived.
Category 4	A fresh formulation of a medication that matches one of these conditions: (a) newly added to the product lineup of the submitting firm, excluding scenarios outlined in Categories 1 and 7; or (b) an existing product from the submitting firm, now offered in a novel dosage format that cannot be aggregated with prior versions.	The PF (pricing multiplier) gets calculated from the volume-weighted average cost of similar formulations containing identical active ingredients (API) and potency levels, available commercially in comparable dosage types.
Category 5	A revised version of a medication already sold by the submitting firm and affiliates in the same corporate family, using a comparable dosage format, aside from instances listed under Category 7.	The PF (pricing multiplier) is computed as the simple average cost across existing versions of this medications with matching potency and aggregateable dosage types sold by the firm and its group affiliates; generic equivalents must factor into the computation.
Category 6	This product qualifies as a generic equivalent.	Its PF (likely denoting a targeted item or offering) must stay at or below 65% of the reference products price.
Cate gory 7	A biosimilar medication not deemed a novel entry or stemming from gradual enhancements.	Its PF must remain under 80% of the original biologic’s PF value.
Category 8	A medication arising from a corporate ownership shift.	The PF follows guidelines in Resolution No. 3/2025, varying by transfer context (specifically, whether the acquiring firm already offers a version with matching API, potency, and aggregateable dosage format).

 

Brazil’s reference countries under the new framework include:  

Australia, Canada, Spain, United States, France, Greece, Italy, Portugal, South Africa, Germany, Japan, Mexico, Norway, and the United Kingdom.