Agreement On Trade In Pharmaceutical Products

Agreement On Trade In Pharmaceutical Products

Trade in our sector helps spread the health benefits of new drugs around the world. While they ensure the high quality of the medicines we supply, governments should avoid imposing taxes, tariffs and other unnecessary barriers to trade. We believe that governments should refrain from implementing trade restrictions that are not intended to protect public health. Why, simply because they could delay the patient`s access to the drugs they desperately need. Unfortunately, there are also other technical barriers to trade that have a negative impact on the international flow of medicines. For example, long and bureaucratic procurement procedures that are not transparent. Our industry is one of the most regulated sectors and most governments have the necessary structures in place to ensure the quality, safety and effectiveness of drugs marketed in their jurisdiction. As a result, the pharmaceutical trade is often subject to numerous health regulations. The latest update, which came into effect on January 1, 2011, added 735 new products to the list of drugs eligible for duty-free treatment.

The initial agreement and subsequent updates include more than 10,000 products. Under the 1994 agreement and subsequent audits, participating members pledged to eliminate tariffs and all other duties and taxes not only on all finished pharmaceuticals, whether sold in bulk or in retail-dosed packaging (paracetamol, antibiotics, vaccines, etc.), but also on more than 7,000 active substances and chemical components used in pharmaceutical supply chains. An indicative list of identified positions is included in JOB/MA/142. During the Uruguay Round WTO negotiations, the United States and several other major trading partners agreed on the reciprocal removal of tariffs, a «zero to zero» initiative for pharmaceuticals and chemical intermediates used in drug manufacturing. At the same time, WTO negotiators could consider simplifying the methodology to ensure that future updates are no longer needed and to encourage more WTO member states to join the agreement. Such an initiative would be part of the new round of trade negotiations and, while welcome, should not prevent or delay the rapid completion of the long-awaited update that was promised during the Uruguay Round. During Uruguay, the signatories of the agreement pledged to update at least every three years the list of products covered by the agreement to include new active substances and intermediate products developed since the signing of the agreement. The second update came into effect in July 1999 (3), meaning that the third update (update III) should have been completed 18 months ago. Since the 1999 update, thousands of new products have been developed waiting to qualify for a zero tariff. The agreement on the elimination of tariffs on medicines was concluded by 22 countries (1) during Uruguay`s trade cycle and came into force on 1 January 1995.

It has meant the abolition of tariffs on thousands of pharmaceutical companies and implies the obligation not to replace customs barriers with non-tariff barriers and even extends to products imported from states that have not signed the agreement. All finished pharmaceuticals (2) are automatically covered by the agreement, but active substances and intermediate products (used in the manufacture of finished medicines) are not automatically eligible for zero tariffs and must be formally included on the list of authorized products. The 1994 Pharmaceutical Trade Agreement (also known as the Pharmaceutical or Pharmaceutical Agreement) removes tariffs and other duties and taxes on a large number of drugs and substances used for their manufacture and binds them permanently to the level of tariffs.