[e-drug] Pakistan: Sales Tax on Medicines (cont)

[Azhar Hussain <azhar@thenetwork.org.pk>]

E-drug: Pakistan: Sales Tax on Medicines (cont)
---------------------------------------------

Dear E-Druggers,

I would like to thank all the friends who has supported our CAMPAIGN
AGAINST GST ON MEDICINES and provided us with the supporting
information.

Latest update on our campaign is available at our website address
www.thenetwork.org.pk
Azhar Hussain
Project Coordinator Pharmaceuticals
The Network for Consumer Protection
40-A, Ramzan Plaza, G-9 Markaz
Islamabad
Pakistan.
Tel:00-92-51-2261085
Fax:00-92-51-2262495
Azhar Hussain <azhar@thenetwork.org.pk>

[Azhar Hussain has also supplied the following two articles on this topic.  BS]

  Taxing Right to Live
  Azhar Hussain
Dawn Monday 1st April, 2002.

  The government's decision to impose 15 per cent General Sales Tax 
(GST) on medicines is unjust, exploitative and inequitable. Despite 
President  Musharraf's announcement to exempt life-saving drugs from 
the GST, the  scenario still looks grim as all medicines are 
important for the consumers.

  Drug prices in Pakistan are already very high and any further 
increase is  tantamount to denying the people access to health care. 
Access to health care is a fundamental human right that also includes 
access to medicines. However, the government, instead of protecting 
the poor, has planned to earn revenue by taxing their right to live 
and have a healthy life. The decision to withdraw GST on life saving 
drugs is not enough as price of all kinds of medicines is a matter of 
life and death for the patient. Pakistan   currently ranks 135th in 
the human development scale out of 174 countries and its health care 
system ranks 122nd among 191 countries in terms of "over all health 
system performance".

  Looking at the health sector spending pattern of the government it 
is clear that it has an urban bias, 80% of the health budget is spent 
on the urban based secondary and tertiary care hospitals while 
remaining 20% on the primary care hospitals.

Around sixty million people, out of a total population of 133 
million, do not have access to healthcare facilities in Pakistan. Up 
to 80 per cent of the  health care is provided by the private sector.
Almost per cent of the medicines are sold through private channels.

With increasing poverty - 33 million people living under absolute 
poverty line - soaring drug prices and public health care system
not being able to meet  the medical needs of the majority of population,
masses' access to essential treatment is further decreasing.

  The government has failed to ensure provision of basic health services to
  the people. According to an estimate, 50 to 60 per cent of the 
people in the  country do not have access to needed medicines. High
prices of drugs, coupled with low income levels, pose a serious
problem to common man.

Although, the number of sick people keep on increasing, the per capita use
of drugs has not increased, mainly due to affordability restraint. Prices of
  essential commodities are increasing regularly, while income of people
  remains the same for years.

  A sum of 4 billion that the government hopes to collect by imposing sales
  tax on medicines will cost precious lives to people.

The main objective of the National Drug Policy is "to encourage the
  availability and accessibility of drugs in all parts of the country 
with emphasis  on those which are included in the National Essential 
Drugs List". However, these objectives can not be achieved by 
stunting people's access to drugs.

  On December 10, 2001, the government announced price increase of 
three percent on controlled and four percent on decontrolled 
categories of drugs.  Apparently, a very benign increase in drug 
price has
charged consumers up to 40% in a number of cases. Such an increase in
medicine prices is due to  the faulty policies, and the ultimate suffers are
the poor consumers.

The government spending on health in Pakistan is 0.7 per cent of the GDP,
which is contrary to the global health agreement that ensures at 
least three percent expenditure on people's health, out of the
GDP. The imposition of  GST will also decrease the government's per 
capita spending in the country.

In public sector, up to 40 per cent of recurrent health budget is spent on
buying medicines, and 90 per cent of this spending goes to urban based
  tertiary and secondary public sector hospitals.

  More than 90 percent of the house holds' budget is spent on drugs in the
country, one of the highest in the world. According to Household Integrated
  Income and Expenditure Survey 1996-97 (HISE) and budget document,
house hold and government spent Rs. 15.4 billion on health care.

  Growing cost of healthcare is a contributing factor in the rise of 
disease in  developing countries. Poverty leads to disease and 
disease to poverty; it's a vicious cycle and, at time, it is 
difficult to guess
which comes first.

  Pakistan ranks 5th among the countries suffering at the hands of TB. 
With the rising resistance to existing anti-TB drugs, there are 
increasing numbers of Multi Drug Resistant (MDR) TB cases. A course 
for
treatment of MDR TB  for two years costs about Rs250,000 which is not
affordable for the poor people.

In developed countries like Sweden and United Kingdom, there is no sales
  tax charged on prescription drugs. Interestingly, even the developed
  countries with very strong socio economic indicators charge a small 
amount  in terms of sales tax on medicines. Health coverage in these 
countries is embedded in different formats like insurance, social 
security and  reimbursements; nothing goes out of the pocket of the 
sick.

  The percentage of sales tax on medicines in different developed 
countries is  as follows.  In Finland, sales tax on all drugs is 
eight per cent; Greece, eight percent;  Belgium, six percent; 
Netherlands, six per cent;
Portugal, five per cent; Spain, four percent; France, 5.5 percent;
Switzerland, 2.3 per cent.

  The imposition of GST on medicines in Pakistan has evoked a bitter 
reaction  from all sections of the society, specially the poor
and downtrodden.

__________________________________________________

Speakers ask govt to withdraw GST on drugs
TheNews 4 April 2002.
Syed Bukhar Shah (Edited Version)

PESHAWAR: Speakers at a seminar, here on Wednesday urged the 
government to withdraw general sales tax (GST) on medicines, reduce 
rulerís expenditure on luxuries and collect taxes from aff1uent 
rulers instead of imposing indirect taxes on consumers.

Almost all the speakers expressed concern over the imposition of GST on
medicines saying it directly affected the common consumers, who are
neither organized nor have any voice. Every government imposed taxes
but not a single one of them ever consulted the consumers. They asked 
the government to take consumers into confidence before imposing such 
taxes.

The Consumers Action Council NWFP in collaboration with the Network 
for Consumers Protection, Islamabad organized the seminar which 
beside the political activists was attended by members of various 
civil society
organizations including lawyers, doctors, religious workers and media
men. The speakers said the government would collect Rs five billion from
GST on medicines while it was not collecting Rs 152 billion from
influential people, who are not ready to pay it.

It, they said, was the responsibility of a government to provide free
health and education facilities but here in Pakistan only 20 percent
people were getting government health facilities while the rest were
paying for their health. It, they said, was deplorable to note that
governments had been spending billions of rupees from the hard earned
money of the poor people over luxuries of rulers and unnecessary lavish
programmes.

The provincial president of Jamaat-e-Islami Professor Mohammad 
Ibrahim, former deputy speaker NWFP Assembly and Awami National Party 
leader Haji Mohammad Adeel, deputy general secretary Jamiat 
illema-e-IsIam (F) Jalil Jan, provincial leader of Qaumi Jamhoori 
Party Mukhtiar Bacha, vice president of Tehrik-e-Insaf Zakria Khan, 
National Awami party Pakistan's representative Barrister Hashim Raza, 
Aurat Foundation representative ljaz Durrani, Azhar Husain Project 
Coordinator TheNetwork,Mohammad Arshad Program Coordinator
TheNetwork and Syed Shaukat Shah of Pakistan Awami Party addressed the meeting.

Haji Mohammad Adeel challenged the 15 percent GST figure saying it was
in fact 18 and 21 percent, adding the government should inform the
people about the details to of IMF loans. "Whether any hospital or
operation theatre has been constructed over the IMF loansî. He said the
government has increased the price of Sui gas by 10 percent. He said
since there was parliament, provincial assembly, the NGOs should play
their role in educating the people.

Abdul Jalil Jan observed that Muslims throughout the world and people in
NWFP in particular were being crushed under a pre planned conspiracy 
on the directive of IMF and World Bank. His party, he said, had 
opposed the present system because it would deprive citizens of their 
rights.

Hashim Raza of NAPP asked the political parties to promise with the
people to allocate 10 percent funds for health and education sectors and
criticized the political leaders for, denying their own assertions.

Mukhtiar Bacha of QJP said the NGOs should review their performance. He
asked them to do research work and give it to political parties so that
they could perform more effectively.





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