Bio-pharmaceutical R&D and manufacturing inputs include: chemical or biological reagents; equipment used in laboratories; microscope parts; equipment for manufacturing such as single-use bioreactors; and the full range of raw materials used for R&D and production of vaccines and other bio-pharmaceuticals, such as guanidine thiocyanate. Researchers use these tools to make scientific breakthroughs, and bio-pharmaceutical companies rely on them to discover, develop, validate, and manufacture lifesaving vaccines, drugs, and therapies – including those necessary to address COVID-19 and future global health crises.
Some countries impose tariffs on bio-pharmaceutical inputs, in some cases as high as 25%. This raises costs and makes it more difficult for fledgling producers to compete. Eliminating tariffs on bio-pharmaceutical inputs could help to resolve some of the current global distribution challenges for COVID-related products, thereby helping to make the global COVID-19 response more equitable, affordable, and sustainable.
Unilateral elimination of COVID-19 related tariffs would provide substantial benefits in terms of the short-term dissemination of pharmaceutical inputs and vaccines. Ultimately, however, tariff elimination should be made permanent and should cover a broader range of products. This would create legal certainty and predictability for actors along global value chains.
An appropriate vehicle for tariff elimination on inputs could be the WTO plurilateral agreement known as Zero for Zero, for which product coverage should be expanded to include the full range of COVID-19 bio-pharmaceutical inputs. In this respect, Innovation Council has developed a list of HS codes showing tariffs related to the inputs used for developing and producing COVID-19 vaccines, therapeutics and diagnostics. The list was developed in partnership with private sector actors in these value chains. A list of COVID-19 MFN product examples is available here.