Key Messages

• Trade in medicines and health technologies should flow freely and effectively across national boundaries for the benefit of patients in need.
• Taxes, tariffs and other barriers delay the flow and increase the cost of medicines and other health related products and therefore should be removed.
• Governments should ensure that effective customs procedures and border controls are in place to ensure the efficient flow of legitimate medicines and other health related products.

Background

The research-based pharmaceutical industry is a global industry operating in an increasingly interconnected world. Its research, development and manufacturing draws on numerous different countries and cultures resulting in the development of the vast majority of new life saving or health improving treatments for the benefit of patients worldwide. It is therefore crucial that the international trading system allows for the effective and efficient flow of pharmaceutical products across all countries of the world.

Tariffs and taxes on pharmaceuticals have a detrimental effect on public health. In countries where an insurance system is not in place they are borne directly by the patients, who are often already in a financially vulnerable situation. In 1995, as part of the WTO Uruguay Round, 22 countries agreed to eliminate tariffs on approximately 7,000 pharmaceutical products, their derivatives, and certain chemical intermediates used to manufacture pharmaceuticals. Since the original agreement entered into force, it has been updated three times—in 1997, 1999, and 2006—to expand the list of products that can be imported free of duty_(i).

In order for patients to have access to more affordable drugs, current and future WTO negotiations should aim at increasing both the number of countries part to this agreement and the number pharmaceutical products, their derivatives, and certain chemical intermediates that are covered by it.

There are also other technical barriers to trade which adversely affects the international flow of pharmaceutical products, such as lengthy and bureaucratic Government procurement procedures which are not fully transparent.  The pharmaceutical industry is one of the most highly regulated industries and most governments have established needed structures to ensure the quality, safety and efficacy of the medicines distributed in their jurisdiction. As a consequence, pharmaceutical trade is often subject to many health-related regulations. Nevertheless, governments should abstain from implementing additional trade restrictions not aimed at safeguarding public health, as it could delay patients access to needed medicines.