How Tariffs Impact Access to Medicines

The Covid-19 pandemic has illustrated the importance of international trade for access to all kinds of medical supplies, with many countries suffering from shortages of essential medical goods as a result of various government-imposed trade barriers. The negative impact of these new restrictions is now the subject of high-level political attention. Both within the policy response to Covid-19 and more broadly, the substantial adverse impacts of government-imposed import tariffs on global access to medicines and medical goods is still largely unaddressed.

Due to their effects on production and prices, import tariffs on pharmaceuticals and medical goods are inimical to affordable access to medicines and medical products. Because of their amplifying effect throughout the supply chain, import tariffs significantly inflate the wholesale and final prices of pharmaceuticals (up to 80% of the ex-factory sales price, according to one recent analysis) and active pharmaceutical ingredients (APIs) (ECIPE, 2017), as well as inputs to vaccines and materials supporting their distribution (OECD, 2021). Import tariffs on a wide range of medical supplies, medical equipment and personal protective products also inflate their domestic prices, thereby worsening affordability and access.

Price inflation, however, is not the only damaging impact on patients.  High tariffs also reduce supply – in the case of medicines, reduced exports and imports translate into fewer choices and less availability at the pharmacy counter or hospital.

The following policy brief provides an overview of current tariff policy for medical goods; shows economic estimates of the effects of tariffs on supply in different countries; and recommends the inclusion of tariff elimination for medicines, APIs and a broad spectrum of medical goods in ongoing discussions regarding trade and health.

To read the full report from the Geneva Network, please click here.