AFM Media Release on USTR WTO Initiative to Remove Tariffs on Medicines & Medical Devices

Roger Bate & Richard Tren | 25 Feb 2006
Africa Fighting Malaria

For Immediate Release

Contacts: Richard Tren 202-420-1837 - rtren@fightingmalaria.org

Roger Bate 202-828-6029 - rbate@aei.org


Taxed To Death: Government ImposedTariff Barriers

Harm Health and WTO should encourage their removal

Washington DC - Import tariffs, duties and sales taxes on medicines, medical devices, and the ingredients to make pharmaceuticals block access to medicines in the developing world, according to a new paper published by the AEI - Brookings Joint Center in Washington, DC[1].

Titled Still Taxed to Death: The role that taxes, tariffs and regulations play in denying essential medicines to patients in the developing world, the paper finds that many developing countries' governments impose onerous tariffs and taxes of over 20% on medicines, gauze, bandages and other medical needs.

The researchers find a significant inverse relationship between the level of import tariffs and access to medicines. This relationship is even stronger when one analyses the effect of import tariffs on vaccines and rates of immunization.

Economists at the World Health Organisation confirm that tariffs lower access to medicines and are not important for revenue generation[2]. With the rampant malaria and HIV problem in Africa as well as the rise of global travel, health of nation states are more intertwined than ever before. Like AFM, the WHO economists call for the removal of tariffs on medical interventions.

AFM welcomes the news that on Monday the US Government will announce that the United States (with support from Switzerland and Singapore) will introduce a proposal that would eliminate the tariffs imposed on the trade of medicines and medical devices.

According to Dr. Roger Bate of the American Enterprise Institute, co-author of the paper "State imposed barriers to access are exacerbating an already damaging situation and governments have it within their powers to remove these regressive and pernicious barriers immediately. I hope the US initiative succeeds."

Africa Fighting Malaria Director Richard Tren who co-authored the report added: "Countries with some of the worst health crises in the world have chosen to put these oppressive barriers in place for the sake of revenue generation, and worse protection of inefficient local industries, now they have a chance to help themselves remove these barriers through the WTO, I hope they grasp it".



[1] R. Bate, R. Tren & J. Urbach (2006) "Still Taxed to Death: The role that taxes, tariffs and regulations play in denying access to essential medicines to patients in the developing world" AEI-Brookings Joint Centre. Washington DC, http://www.aei-brookings.org/publications/abstract.php?pid=930

[2] M. Olcay & R. Laing (2005) "Pharmaceutical Tariffs: What is Their Effect on Prices, Protection of Local Industry, and Revenue Generation" CIPR, http://www.who.int/intellectualproperty/studies/TariffsonEssentialmedicines.pdf