The Pandemic Denounces Barriers To Drug Trade

Member of the Academic Council of Libertad y Progreso.
PhD in Administration from the Catholic University of La Plata and Professor of Economics at the Faculty of Law and Social Sciences of the UBA. His research has been collected internationally and he has published books and scientific and outreach articles. He has served as Rector of ESEADE and as a consultant for the University of Manchester, Konrad Adenauer Stiftung, OAS, IDB and G7Group, Inc. He has received awards and scholarships, including the Eisenhower Exchange Fellowship and the Freedom Project of the John Templeton Foundation.

HOY ROJAS – We are seeing the race to get the Covid-19 vaccine as an accelerated version of the arrival on the Moon and we almost suspect that some will be ready this year and perhaps our next one will arrive.

What would Argentines think if at the time this happens they knew that medicines pay an average import tariff of 9.2%, which ranges from zero in some positions to 14% in others? .

What would you think if the whole list of taxes, fees and regulatory costs that normally affect you were also taken into account? .

Quarantine-type protests, such as Vicentin, would explode across the country. Of course, anticipating that, such a thing will not happen, when the vaccine arrives the pressure will be very great and it will be exempt from tax, although not from all the regulatory and tax burden. So this would be, until now, an anticipated “fake news”.

A recent study by Philip Stevens and Nilanjan Banik, “Removing drug and vaccine tariffs to promote access: a long way to go” (Geneva Network, July 2020), shows that while drug tariffs They have been falling in recent years from a world average of 4.9% in 2001 to 3.4% in 2018, in some countries reaching as much as 20% in drugs and 10% in vaccines.

The paradox is that they are all poor or middle-income countries, not developed ones.

This reduction is also offset by an extension of the tariff positions subject to tax; that is, tariffs are lowered, but the quantity of drugs subject to tariffs increases.

Needless to say, who is primarily harmed by these costs imposed by governments, and in times of a global pandemic, their harm could not be more evident.

The process of reducing tariffs is due, in part, to the implementation in 1995 of the Agreement for the Elimination of Customs Duties applicable to Pharmaceutical Products, within the framework of the WTO.

The signatories are Canada, the 28 countries of the European Union, Japan, Norway, Switzerland, the United States and Macao. They periodically agree to update the list of pharmaceutical products on which tariffs will be eliminated.

Low- and middle-income countries are not part of this, punishing their low- and middle-income citizens for spending more of their income on these products.

However, the study shows that India has been the country that has implemented the largest percentage reduction in tariffs, from an average of 34.4% in 2001 to 10% in 2018.

Nigeria, Ghana, Chile, Mongolia, Israel and Bahrain have eliminated them entirely.

The aforementioned Agreement has not advanced at the same speed as innovation in the pharmaceutical field. Many new products and ingredients have emerged since 1995, so today there are about 1,000 finished products and 700 ingredients that are not on the lists.

A study cited by Stevens and Banik argues that if the tariffs were repealed, patients would save up to $ 6.2 billion in China, $ 2.8 billion in Russia, $ 2.6 billion in Brazil, and $ 737 million in India. It does not mention Argentina, but we can get an idea.

So, now that the vaccine is coming, the questions that deserve an answer are: do we want it to carry duties and taxes? Also for remedies for the disease, or for its treatment? Also for the elements and equipment that help to treat the disease? And finally, why not, also for all the other drugs, ingredients and equipment that help patients in other types of diseases? .

It will not be easy to argue in favor of some, and not others.