Leaders of the Group of Eight (G8) wealthy nations have called on governments worldwide to abolish tariffs, import duties and other taxes on medicines, following their annual meeting in St Petersburg, Russia, this weekend.
Tariffs levied by developing country governments have long been criticised by pharmaceutical companies as serious obstacles to reducing the prices of medicines, particularly antiretrovirals.
Abolition of tariffs on medicines has been strongly advocated by the United States during World Trade Organization negotiations.
A report to the World Health Organization last year found that:
- 61% of countries levy tariffs on pharmaceutical products
- 35% of countries levy tariffs on vaccines
- 90% of countries apply tariffs of less than 10%
A European Commission study carried out between 2001 and 2003 concluded that despite least developed countries generally having the lowest tariff rates for pharmaceutical products, “taxes and duties collected on pharmaceutical products represent 17% of the public health expenditure of least developed countries”.
The European Commission found the highest total burden of duties and taxes in India, where imported pharmaceutical products attracted a surcharge of 55% including value added tax, and in Iran, where finished products face a 100% surcharge.