Abolishing Pharmaceutical and Vaccine Tariffs to Promote Access

Abstract

This research note attempts to identify major trends in pharmaceutical tariffs since the early 2000s, in particular average tariff rates and the scale of individual product coverage by tariffs. It concludes by calling for international action to legally oblige governments to reduce tariffs on medicines and vaccines.

Pharmaceutical tariffs have been declining over the last twenty years, falling from a global average of 4.9% in 2001 to 3.4% in 2018 (latest available data). Nevertheless, jurisdictions and customs territories continue to apply tariffs of up to 20% on pharmaceuticals and 10% on vaccines (although increasing numbers of governments apply no tariffs at all). Reductions in tariffs rates are being undermined by a trend for governments to increase the categories of imported medicines subject to tariffs, potentially to recoup revenue lost from lowering headline tariff rates. The COVID-19 crisis reemphasises the need to reduce inflationary trade barriers to increase access to medicines and vaccines. Expanding and updating the WTO Pharmaceutical Agreement would be a powerful avenue to achieve this.

Keywords: tariffs, trade, pharmaceuticals, vaccines, COVID, WTO Pharmaceutical Agreement

JEL Classification: F13, F62, I15, I18