German demand for drug VAT cut

A total of 15 drug industry and pharmacy associations and organizations linked to health care in Germany are backing the demand by the technical sector health fund (TK) for a reduction in the rate of value-added tax on medicines. The demand - in the so-called Dusseldorf Declaration - is for a reduction from a current 19% to 7%. Medical bodies and patient associations are among those supporting the call.

The pharmacy federation, ABDA, says that a moderate reduction in VAT would free the health care system from a financial burden of 2.5 billion euros ($3.6 billion) a year and allow the public-sector health funds to cut their rates at least 0.2% a year. The declaration says that whether France, Italy or Poland is considered, the VAT rates almost everywhere are lower than in Germany, where veterinary drugs are taxed lower than those for humans.