[e-drug] EAC finally suspends 10pc tax on imported drugs

["Serutoke, Mr. Joseph - ug" <Serutokej@ug.afro.who.int>]

E-DRUG: EAC finally suspends 10pc tax on imported drugs 
-----------------------------------------------------
 
Copied for fair use
 
http://www.nationmedia.com/eastafrican/current/Regional/Regional3.html
 
By DAGI KIMANI 
Special Correspondent 
The East African Community has suspended a 10 per cent tax imposed on
drugs imported into the region under the common tariff regime. 

Leading pharmaceutical distributors and local subsidiaries of
multinational drug companies, who had complained that the tax would
raise the cost of healthcare across the region, welcomed the temporary
removal of the tax. 

"We are happy with the suspension and request that it be made permanent
because of the tax's implications on the access of drugs such as
antiretrovirals (ARVs) and anti-malarials by the poor," said Ms Melanie
Ribeiro, the Kenya manager for American drug giant Merck Sharp & Dohme
(MSD).  

MSD, which manufactures the ARVs Crixivan and Stocrin, was among
Nairobi-based pharmaceutical companies that petitioned the EAC
secretariat in Arusha for the suspension of the duty. The company also
wrote to Kenyan President Mwai Kibaki, seeking his intervention in the
matter. 

The tax regime was imposed in January. Speaking to The EastAfrican at
the time, Davies Gichuhi, East Africa's commercial director of
GlaxoSmithKline, said that due to the tax, Kenyan patients would have
had to pay more than Ksh1 billion ($13.5 million) for imported drugs,
based on the value of the local drug industry, which is worth about $160
million annually. In Uganda, where the drug retail industry is worth
about $73 million per year, patients would have had to pay an extra $7.3
million per year. Tanzanian patients would, however, not have felt the
pinch, since the country already had been charging a similar domestic
tax before the commencement of the common external tariffs. East Africa
imports as much as 80 per cent of its medicines, with the bulk of the
rest being manufactured in Kenya. 

Although the new tax regime would have affected all patients who used
imported drugs, industry experts had warned that patients on long-term
treatment for chronic ailments such as Aids, cancer and hypertension
would have been particularly hard hit, because they have to use
medicines on a daily basis. 

By raising the cost of ARVs, the tax would also have had the effect of
narrowing access to the life-saving medicines by the region's estimated
400,000 HIV-positive people who need them, increasing the likelihood of
East Africa not meeting its part of the World Health Organisation 3-by-5
initiative, which seeks to treat three million people globally with ARVs
by the end of the year. 

Without the new tax, Mukesh Mehta, managing director of Philips
Pharmaceuticals, said distributors who handle ARVs under the
UN-supported access initiative by such multinational companies as MSD
and GlaxoSmithKline will only charge a 5 per cent handling fee. The
drugs will subsequently be made available to patients at cost. 

Joseph Serutoke 
Pharmacist
Uganda.
"Serutoke, Mr. Joseph - ug" <Serutokej@ug.afro.who.int>