Taxes, Tariffs & Access to Medicine

July 13, 2006

Poor countries have long claimed that their people suffer needless sickness and death because the price of medicines is too high. They are right. But often part of the fault lies in their own policies, which jack up prices by taxing medicines, raw materials for drugs and medical devices.

So states a New York Times editorial denouncing this destructive practice, which Roger Bate at the American Enterprise Institute has analyzed in depth. His findings, summarized in a recent Foreign Policy article (subscription required), informed a new proposal to eliminate tariffs on medicines (.pdf). The New York Times, however, isn't very optimistic about the prospects for success:

The proposal to the World Trade Organization would probably have gotten a lot more support by now if it weren't coming from Washington, allowing some countries to dismiss it as a way to help American drug makers while scoring public relations points. It may be that, but it's also a good idea.

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.