Friday, April 29, 2005
Roger Bate, Richard Tren & Jasson Urbach have posted Taxed to Death on the American Enterprise Institute/Brookings Institution Joint Center for Regulatory Studies. Here is the abstract:
This paper examines the role that tariffs, domestic taxes, and regulatory requirements pose on access to essential drugs and devices for the diseases that afflict the developing world, especially HIV/AIDS. While aid has increased in recent years and the price of many drugs has fallen, access to medicines and devices has not increased greatly. There are numerous reasons for this. The major one, discussed in this paper, is the barriers imposed by recipient countries themselves. For example the combined tax and tariff barrier in India and Brazil are respectively over 60% and 38%. Only just over a third of Indians have access to essential drugs and it is likely that a reduction of these financial impediments would increase access. Removal of these barriers would therefore likely save thousands of lives across the developing world. Southern African countries generally have fewer tariff barriers. But if South Africa removed its 14% sales tax, HIV patients could afford more food, and many are currently malnourished. Furthermore, many Southern African countries, such as Namibia, impose regulatory constraints (expensive and time consuming registration of products already approved in US/EU), which reduce access to essential medicines.