USA, Switzerland and Singapore press for removal of import tariffs on drugs

In a joint initiative, the governments of the USA, Switzerland and Singapore have urged that the Doha Development Round of the World Trade Organization negotiations to call for the removal of import tariffs on pharmaceuticals and medical devices.

This follows similar pressure last year by the 10 international development and health care organizations and members of the No Taxes on Drugs and Devices Initiative (NiDDi) ahead of the Hong Kong Ministerial meeting (Marketletter December 12, 2005). Moreover, the World Health Organization recognizes the negative impact on public health of tariffs on medicines. In April 2005, the WHO published a report showing that, of 153 countries surveyed, 35% still have tariffs greater than 5% on finished pharmaceuticals. Iran has the highest rates (54%), followed by Nigeria (20%), Thailand (18%), Zimbabwe (17.6%) and India (16%). The WHO concluded that "tariffs on medicines are essentially a regressive form of taxation since a smaller proportion of the payers' income is affected by the tariff as income rises. This regressive 'tax' on medicines targets the poor and the sick."

In their official communication on this initiative, the three nations point out that almost $33.0 billion of trade in pharmaceuticals is subject to duty, imposed predominanlty by developing countries. Only 22 nations, out of 149 WTO members, are signatories to the WTO Pharmaceutical Agreement for elimination of tariffs over medicines and no developing country has signed it.