New study: Taxes on medicines are a tax on the sick

For immediate release

LONDON, 25 JANUARY -- New analysis released today by think tank International Policy Network shows that import tariffs on medicines are gradually falling throughout the world, but remain stubbornly high in some countries – acting as a tax on the sick.

The global average is now 3.5%, down from 5% in 2005. However, this masks exceptionally high tariff rates in countries such as Iran (30%), Burundi (15%), Nigeria (14.8%) and Tunisia (13%), the study shows.

Other low-income countries such as Ghana and Bangladesh increase the cost of medicines with import duties of between 6% and 8% - self-defeating in countries with such high disease burdens.

Some countries levy especially punitive tariffs on antibiotics, hampering the fight against infectious disease. The worst offenders are Nigeria (20%), Burundi (15%), Nepal (15%) and Congo (15%).

In contrast, countries like Rwanda, Kenya, Gabon and Saudi Arabia have recently abolished import duties on medicines, joining the likes of wealthy European Union countries, Canada and the USA, as well as poorer countries like Benin, Malawi, and South Africa. Indian tariffs have fallen from 35% to 10% since 2001.

Study author Philip Stevens said: “Many lower income countries suffer high rates of diseases that are easy to treat or prevent with appropriate medicines. Lack of proper health systems means that many people have to pay for medicines out of their own pockets. It is therefore unconscionable that governments still tax sick people”.

“All countries should strive to abolish medicine tariffs, and join the increasing number of countries that do not impose these unfair taxes on the sick,” Stevens said.

The report is available here: http://www.policynetwork.net/health/publication/death-and-taxes-2010

IPN has also launched a new interactive global map of medicine tariffs: http://www.policynetwork.net/health/map

IPN (www.policynetwork.net) is a global think-tank based in London, and is a non-profit, non-partisan organisation. IPN runs campaigns seeking to educate the public about the importance of markets and market institutions in the context of global policies relating to development, trade, health, accountability and the environment.