Supplementary Law No. 224, of December 26, 2025, entered into force with an explicit fiscal objective: to linearly reduce federal tax incentives and benefits.
The issue is that, under the adopted design, the cut directly affects one of the main tax relief mechanisms for the pharmaceutical sector, reigniting a debate that goes beyond tax technicalities: how should essential goods be treated under the tax system?

1) Did LC 224/25 reduce the presumed credit under Law No. 10,147?

LC 224/25 establishes that the reduction applies, among other benefits, to the presumed credit of the PIS/Pasep Contribution and Cofins provided for in Article 3 of Law No. 10,147.

The mechanism adopted is clear: financial or tax credits, including presumed or fictitious credits, now have their utilization limited to 90% of the originally calculated amount, with the non-utilizable portion being canceled.

In practice, this means that manufacturers and importers of medicines included in the positive list will be able to use only 90% of the presumed credit, calculated by applying the 12% PIS/Cofins rate to the sales revenue of these products. It therefore represents an increase in the effective tax burden, even without a nominal increase in tax rates.

2) Does this give rise to controversy in light of the principle of essentiality?

By preserving the tax relief granted to basic foodstuffs while simultaneously reducing the favorable treatment applicable to medicines, LC 224/25 highlights an asymmetry that is difficult to justify from the perspective of the principle of essentiality.

Food and medicines are goods that are equally indispensable to human dignity and to the preservation of the minimum existential standard. The legislative choice to fully protect one while relativizing the treatment of the other reveals a material inconsistency, which is likely to fuel legal debates—especially when the impact falls on medicines for continuous use and broad consumption.

3) What has been the inflation rate for medicines over the past 12 months?

Official data from the Brazilian Institute of Geography and Statistics (IBGE) help to gauge the inflation affecting medicines over the past 12 months. In 2025, the overall IPCA accumulated 4.26%. Meanwhile, “Food and beverages” stood at 2.95%, with a marked deceleration and even months of decline in at-home food prices. However, when looking specifically at the behavior of pharmaceutical products, the scenario is more sensitive.

According to Table 7060 of SIDRA/IBGE, the “Pharmaceutical products” subgroup recorded accumulated inflation of 5.42% over the period, above the overall average for the economy. Some segments showed even higher variations, such as analgesics and antipyretics (5.54%), while medicines for continuous use, such as anti-infectives and antibiotics, also experienced significant increases.

These figures show that medicines were already facing inflationary pressure above the IPCA even before the entry into force of LC 224/2025. It is therefore not a “protected” or artificially tax-relieved sector, but rather a market that operates under rising costs and demand that is relatively insensitive to price changes.

4) How may LC 224/25 further put pressure on medicine prices?

The economic mechanism is well known: taxes become costs, and costs tend to be passed on to prices, even if only partially. This effect is particularly pronounced in the pharmaceutical sector, which is characterized by continuous demand and regulated prices.

By reducing the presumed credit benefit by 10%, LC 224/25 effectively recalibrates the PIS/Cofins tax burden applied to a significant portion of the medicines market.

Among the best-selling medicines in the country, there are several examples of affected substances, such as losartan, hydrochlorothiazide, and enalapril—drugs for continuous use for which patients have no real option of non-consumption.

Although no significant and immediate impact is expected on the annual price adjustment authorized in March of this year, it is undeniable that the measure puts pressure on the sector’s average costs over the coming months, with potential spillover effects on subsequent regulatory cycles and on the commercial policies across the supply chain.

5) Illustrative estimate of the impact on prices

Considering:

• a hypothetical consumer price of BRL 100;

• an estimated manufacturer selling price of BRL 60;

• payment of 10% on the presumed PIS/Cofins credit calculated at a 12% rate.

This results in a potential cost increase passed on to the consumer of approximately 0.7% of the price of the medicine.

This is an illustrative estimate, intended solely to demonstrate the order of magnitude of the economic impact, and not an exact price projection.

Conclusion

The reduction of the presumed PIS/Cofins credit introduced by LC 224/2025 increases the effective tax burden on medicines, with the potential to put additional pressure on prices in an essential sector already subject to above-average inflation.

By protecting foodstuffs while relativizing tax relief for medicines, the legislature makes a choice driven by revenue simplicity, but one that is insufficiently sensitive to the concrete social impacts of that choice. The final effect is likely to be felt at the pharmacy counter and in access to healthcare in the country.