Deputy US Trade Representative and Ambassador to the WTO, Peter F. Allgeier today announced that the United States joined Switzerland and Singapore in introducing a proposal that would eliminate the tariffs imposed on the trade of medicines and medical devices. According to United Nations statistics, almost $33 billion in pharmaceuticals and $23 billion in medical equipment are still traded subject to duty, predominantly by developing countries.
"It is ironic that many of the countries that are in urgent need of cheap medicines also have a significant tax added to the drugs and medical devices they import," said Ambassador Allgeier. "As import tariffs on medicines comprise a small proportion of government revenues, these countries should immediately eliminate these tariffs and improve access to medicines and medical devices."
The joint proposal calls for the elimination of tariffs and non-tariff barriers to trade in medicines and medical devices as part of the WTO's non-agriculture market access agenda. The United States has worked closely with healthcare NGOs in developing this proposal.
A recent research paper published by the AEI-Brookings Joint Centre finds that several countries inflate the price of medicines to patients by around 10% and often higher. Researchers Roger Bate of AEI and Richard Tren & Jasson Urbach of Africa Fighting Malaria find a significant inverse relationship between the level of import tariffs and access to medicines. This relationship is even stronger when one analyzes the effect of import tariffs on vaccines and rates of immunization.
Last year a report by the World Health Organization confirmed that many countries, many of which are grappling with severe public health problems such as HIV/AIDS, TB, and malaria, continue to impose import tariffs on medicines and medical devices. The WHO urges countries to remove these tariffs and argues that the loss of government revenue will be insignificant.
With increased international travel and trade, healthcare of all nations is now increasingly connected. Removing tariffs on medicines and medical devices, such as essential diagnostic equipment, will assist all countries in tackling both emerging and existing health problems. Support for this proposal would improve development and public health and advance the aims of the Doha Development Agenda.