By Brazil Stock Guide – The Brazilian Association of Pharmacies and Drugstores (Abrafarma) has issued a strong response to Mercado Livre (Nasdaq: MELI) after the e-commerce giant reaffirmed its ambition to expand into the online drug market. The association says the company’s strategy — centered on the acquisition of Cuidamos Farma (Target) — may constitute an improper vertical integration, potentially allowing Mercado Livre to operate directly in pharmaceutical retail without the required health authorizations.
In a statement sent to the Administrative Council for Economic Defense (CADE), Brazil’s antitrust regulator, Abrafarma argued that the deal conflicts with ANVISA’s 2009 Resolution, which restricts the sale of medicines through marketplaces. The group warned that the move could enable Mercado Livre to obtain “what it lacked” — a sanitary license and a responsible pharmacist — to sell drugs directly on its platform.
Regulatory gaps and vertical risks
The dossier highlights possible horizontal overlaps in the retail pharmacy market and warns that large digital platforms could concentrate control over both prescription issuance and drug distribution. Abrafarma expressed concern about potential links between Mercado Livre and Memed, Brazil’s largest digital prescription platform, previously tied to the Target pharmacy acquired by Mercado Livre.
Sérgio Mena Barreto, CEO of Abrafarma, said the issue goes beyond competition policy. “Marketplaces still require stricter regulation and oversight before dealing with products that are sensitive and essential to public health. Consumer safety is at stake,” he said.
Case heads to CADE and ANVISA
Abrafarma’s statement comes as CADE reviews the Target acquisition, a move seen by the association as a potential regulatory workaround that undermines ANVISA’s authority. The group called for better coordination between the two agencies to prevent decisions that could distort competition and weaken health safeguards.
The trade body also warned that the pharmaceutical e-commerce sector, which moves around R$200 billion (US$36 billion) a year in Brazil, could face systemic risks if major platforms expand without equivalent sanitary oversight. Abrafarma defends digital innovation “within the boundaries of regulation,” ensuring product traceability and fair competition among licensed operators.
What’s at stake
The clash between Mercado Livre and Abrafarma reflects a broader tension between digital disruption and regulatory control. For pharmacies, the risk is losing ground to online platforms that bypass strict sanitary rules. For Mercado Livre and other tech firms, the challenge lies in modernizing a legal framework still rooted in an offline era.
CADE’s decision is expected in the coming weeks. If the antitrust authority clears the deal, the matter will likely shift to ANVISA, which is currently discussing updates to its online medicine sales regulation — a change that could reshape the balance between innovation and consumer safety in Brazil’s pharmaceutical retail market.
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