German Pharmacists View VAT Cut, OTCs

At their annual conference, Germany's pharmacists have urged thegovernment to cut value-added tax from 15% to 7%, saying this would relieve the health funds of a 2.3 billion Deutschemarks ($1.29 billion) cost burden and ease their financial crisis. The pharmacists said the full rate of VAT is not applied in almost all other comparable European Union member states, and only in Denmark is a higher rate of VAT applied to drugs than in Germany.

They also agreed on a plan to expand self-medication with a higher level of advice from pharmacies, by restricting nonprescription items such as health teas and garlic preparations to pharmacies, and thus excluding them from drugstores, supermarkets and similar outlets.

The pharmacists say they account for only about 700 million marks of nonprescription products' 2 billion marks annual sales, the rest going to superstores and chains. Self-medication sales account for 18% of pharmacy sales and are rising. German pharmacy sales rose 4.5% to 45 billion marks in 1996.