The Pin Factory Blog

According to the World Health Organization, an estimated 30 percent of the world’s population lacks regular access to medicines, with this figure rising to over 50 percent in the poorest parts of Asia and Africa. Governments have often blamed this on the price of medicines, and have responded with a number of market interventions such as price controls and compulsory licenses.

However, our new research released this week shows that governments themselves are major contributors to the final retail price of medicines, through import tariffs and a range of domestic taxes. While such tariffs are gradually declining around the world, they are still as high as 15% – thereby acting as a tax on sick people.

Other low-income countries such as Ghana and Bangladesh increase the cost of medicines with import duties of between 6% and 8% - self-defeating in countries with such high disease burdens. Some countries levy especially punitive tariffs on antibiotics, hampering the fight against infectious disease. The worst offenders are Nigeria (20%), Burundi (15%), Nepal (15%) and Congo (15%).

In contrast, countries like Rwanda, Kenya, Gabon and Saudi Arabia have recently abolished import duties on medicines, joining the likes of wealthy European Union countries, Canada and the USA, as well as poorer countries like Benin, Malawi, and South Africa. Indian tariffs have fallen from 35% to 10% since 2001.

In 2005, a coalition of Switzerland, Singapore and the USA proposed at the World Trade Organization that all countries should abolish tariffs on medicines, as they are a regressive tax on the sick. It’s encouraging that many countries are moving in that direction, but there are still too many governments who needlessly price their own citizens out of treatment.

A global interactive map of medicine tariffs is available here.

Philip Stevens is Senior Fellow at International Policy Network, a London-based think tank

Despite record levels of foreign aid for health, almost no progress is being made in improving child mortality in the poorest parts of sub-Saharan Africa.

Many countries are going backwards. This is not surprising. The UN and British government – egged on by NGOs and activists – has bet the house on the daft idea that if western governments transfer enough money to governments in poor countries, health systems will magically improve and medicines will get to sick kids. As far as strategies go, this is a turkey.

Once it makes it to the recipient government, what happens to that money is anyone's guess. There is almost no data on how aid money makes its way through recipient health systems.

We do know, however, that much of it is lost to corruption – from ministers skimming off their share of grants, to local health workers charging patients for nominally "free" services. Then the Western consultants and NGOs need to take their cut.

When some aid money does make it to local clinics, World Bank research shows it is most often the educated, urban classes who benefits, rather than the rural poor for whom it is really intended. To cap it all, the influence of Western NGOs on donors has also meant that "fashionable" diseases such as HIV get the lion's share of funding, to the detriment of less high profile problems such as pneumonia, which kill many, many more.

In the short-term, donors could spend taxpayer's money more wisely by bypassing governments altogether, instead putting health services out to competitive tendering amongst the voluntary or private sectors. In the long term, we can't hope to improve child mortality by simply beefing up aid. There is no way western aid agencies can fund a clean water supply, health services and a decent daily meal for every child in Africa. Even if such a thing were logistically possible, such large inflows of hard foreign currency would wreak havoc on fragile local economies.

In the end, the only way to solve child mortality is by fostering economic growth.

The author is Senior Fellow at the International Policy Network. This is taken from the Independent's World Vision blog: The Aid Debate

The WHO last week released its long-awaited report on the "Social Determinants of Health" - the social and economic factors behind disease.

As the report lands in the in-trays of ministers all over the world, they would do best to file it under ‘B’ for ‘bonkers’.

Declaring that 'social injustice is killing people on a grand scale', the report proposes a vertiginous list of government interventions to help iron out inequality, from taxation to town planning. Many of their recommendations are particularly aimed at developing countries.

Over the course of 247 pages, the authors make the case that only the wholesale socialisation of society and the economy can improve health. Economic growth, open markets and free trade cause ‘inequality’ and must be rejected.

Most of the recommendations – such as beefing up state welfare and employment regulation, and soaking the rich with tax – would almost certainly create economic stagnation and structural unemployment. 

And calling for an end to free trade is perverse in the extreme.  Free trade has been demonstrated to be the biggest weapon ever against poverty. Since China recommenced international trade in the 1980s, 400 million people lifted themselves out of poverty in that country alone.

The WHO also willfully underestimates the importance of economic growth for health. Despite the report’s undergraduate-style railing against globalization, economic growth is causatively associated with improved health, because it allows people to afford decent living conditions, clean water and fuel. 

Without economic growth, there will be no money to pay for these vital things.

In this time of global economic uncertainty, it is vital that WHO member states ignore every last word of this report -- unless they wish to consign themselves to economic oblivion.