E-DRUG: Effect of pharmaceutical tariffs on prices, local manufacturing, revenues
------------------------------------------------------------------------
Dear E-Druggers,
I would like to draw your attention to a recent paper that Muge Olcay and I have written for the Commission on Intellectual Property Rights,Innovation and Public Health Health. The URL for the paper is http://www.who.int/intellectualproperty/studies/tariffs/en/
The abstract for the paper reads
"Pharmaceutical Tariffs: What is their effect on prices, protection of local industry and revenue generation?"
Muge Olcay, Secretariat for the Commission on Intellectual Property Rights, Innovation and Public Health and Richard Laing, World Health Organization
The objective of this study was to examine tariffs levied on medicines. The paper provides data on the tariff rates levied and revenue generated by over 150 countries around the world on different categories of pharmaceutical products. These categories include active pharmaceutical ingredients, finished products and vaccines for human medicines. Data for selected sub-categories of pharmaceutical products is also provided. The analysis has shown that many countries for which data are available do not levy duties on pharmaceutical products. Ninety percent of countries apply less than 10% tariff rates on medicines. Pharmaceutical tariffs generate less than 0.1% of Gross Domestic Product (GDP) in 92% of countries for which data is available. Furthermore, pharmaceutical tariffs generally do not appear to be structured to protect local pharmaceutical industries. According to the study, factors other than tariffs such as manufacturer's prices, sales taxes including value-added tax (VAT), mark-ups and other charges are likely to impact the price of medicines more than tariffs do. Nonetheless tariffs are a regressive form of taxation which target the sick. The paper concludes that pharmaceutical tariffs could be eliminated without adverse revenue or industrial policy impacts.
To facilitate other people studying this topic we have made our data tables available at
http://www.who.int/intellectualproperty/studies/tariffs_data/en/
We would like to write a short summary paper for publication in a journal so we would welcome feed back on the paper.
Richard Laing (Medical Officer)
Policy, Access and Rational Use,
Medicine Policy and Standards,
World Health Organization
CH-1211 Geneva 27, Switzerland
Tel 41 22 791 4533
Fax 41 22791 4167
E-mail laingr@who.int