Countries must rethink tariffs on bio-manufacturing

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Thaddeus Burns, Head of Life Science Government & Public Affairs, Merck & Jennifer Brant, CEO and Founder, Innovation Insights


  • COVID-19 has shown the global manufacturing capacity for vaccines, therapeutics and diagnostics is insufficient to support an effective pandemic response.
  • More investment is needed in bio-manufacturing and R&D capacity.
  • Tariff reduction provides a clear opportunity to improve access to vaccines, therapeutics and diagnostics globally.

Bio-pharmaceuticals are increasingly central to healthcare delivery in high and low-income countries alike. Well-known examples of these large molecule-based treatments are vaccines and monoclonal antibodies to treat COVID-19.

Today there are also a myriad of “biologics” on the market to treat non-communicable diseases (NCDs) such as arthritis, cancer and diabetes, and to prevent some infectious diseases.

But COVID-19 has revealed that the global manufacturing capacity for vaccines, therapeutics and diagnostics is insufficient to support an effective pandemic response, and by addressing the current gaps, healthcare delivery and health security more broadly could benefit.

More investment now for the next pandemic

Governments, in partnership with the private sector, must commit to invest in more, globally distributed bio-manufacturing and R&D capacity. Advances in technology enable agile production facilities to be rapidly established and at a much lower cost than in the past. This opens opportunities for new actors to participate in globally distributed vaccine, therapeutic and diagnostic value chains.

Despite these advances, it takes time to build physical capacity and to train the workforce. Investments must therefore be made today to be ready for the next pandemic.

Joining up health, trade and investment: rethink tariffs

The successful promotion of bio-manufacturing and R&D activities globally will require that governments adopt coherent policies in the inter-related areas of health, trade, and investment. The right trade policies can be crucial enablers of global bio-pharmaceuticals manufacturing and trade.

A promising new proposal on Trade and Health is on the table at the WTO, submitted by the Ottawa Group. This proposal opens a potential route towards new action to reduce and remove tariffs on health products and their raw materials and inputs. WTO Members should seize this opportunity. To provide predictability and legal certainty, they must aim for more than temporary tariff reductions as part of the COVID-19 response.

Tariff reduction provides a clear opportunity to improve access to vaccines, therapeutics and diagnostics globally. Actors in the business of developing, producing and moving health products around the world see firsthand how tariffs can interrupt the efficient operation of supply chains, from R&D to the manufacturing and distribution of final products. To put it simply, whether imposed on raw materials and inputs or on final products, tariffs raise the cost of health products.

There are significant opportunities for companies in emerging markets to integrate into bio-pharmaceutical value chains, particularly in light of the current global focus on expanding bio-manufacturing and R&D capacity. The economic feasibility of geographically distributed R&D and manufacturing activities depends, in part, on access to the required tools and other inputs. Unfortunately, in many places, such access is hampered by counterproductive government policies notably tariff imposition.

Despite a general trend of decreasing tariffs on finished products for the bio-pharmaceutical industry, countries still show substantial average customs duties across these products – and particularly on the raw materials and inputs that are needed for the development and production of bio-pharmaceuticals such as vaccines, diagnostics, and monoclonal antibodies. Tariffs are imposed by developed and developing countries. Multilateral action is required to ensure health products and their inputs can move freely along supply chains and at the lowest possible cost to manufacturers and patients.

Examples of inputs that are critical for the COVID-19 response and that have been subject to substantial average tariffs include: compounds used in diagnostic testing kits, such as guanidine thiocyanate; single-use bioreactors and their consumables including plastic bags and filters; and solutions used to grow cell cultures when manufacturing COVID-10 therapeutics and vaccines.

Given the potential of bio-manufacturing and R&D to improve health security and delivery of healthcare in the coming years, trade and industry officials and health officials should agree to update the “zero-for-zero” agreement. The Ottawa Group proposal can potentially provide a basis for new negotiations in this regard.

Extending zero-for-zero product coverage during 2021 to include all medicines, whether small molecules or biologics, together with their R&D and manufacturing raw materials and inputs, will be essential to health security and the ability of the global community to respond to COVID-19 and future health crises, including pandemics, and to improve healthcare delivery overall.

Thanks to new technology solutions, more flexible bio-manufacturing and quicker scale-up is now possible in more places. Work is needed to ensure that inappropriate border measures will not slow down this positive evolution in global value chains.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

UN chief welcomes South Sudan’s Unity government, lauds parties for ‘significant achievement’

With lifelong learning, you too can join the digital workplace

Legendary Harlem Globetrotters slam-dunk at the UN, with message that brings families, nations together

German stock market is not affected by the Greek debt revolution while Athens is running out of time

A Europe that delivers: EU citizens expect more EU level action in future

Ukraine: Temperatures plunge amid rising humanitarian needs

How to talk about climate change: 5 tips from the front lines

This Canadian start-up turns millions of chopsticks into sustainable furniture

OECD Secretary-General Gurría welcomes announcement of new trade agreement between the US, Mexico and Canada

How tech is helping the agriculture sector curb carbon emissions

2019 data on official development aid & online discussion of ODA’s role in the Covid-19 crisis

Spanish vote – bad luck for Greece: Does Iphigenia need to be sacrificed for favourable winds to blow in Eurozone?

How three US cities are using data to end homelessness

MEPs want to ensure sufficient funding for Connecting Europe’s future

Post-Brexit muddled times: the resignation of UK’s top ambassador and Theresa May’s vague plans

Re-open EU: Commission launches a website to safely resume travelling and tourism in the EU

How to make primary healthcare a favourable career choice for medical students: strategies and reflections

Eastern Partnership: Commission proposes new policy objectives for beyond 2020

What if big-tech companies became non-profits?

South Sudan: UN rights experts see little headway on peace deal amid spike in local-level violence

UN official sees ‘unprecedented opportunities’ to make progress on peace in Afghanistan

Commission supports reform projects in Member States for more jobs and sustainable growth

Polish de facto ban on abortion puts women’s lives at risk, says Parliament

Mobile health technology: Advances, Facilitations and Promotion of Autonomy

Road injuries leading cause of death for the young, despite safety gains: UN report

State aid: Commission approves up to €4 billion French measure to recapitalise Air France

Iran: UN rights chief ‘deeply disturbed’ by continuing executions of juvenile offenders

This afternoon Britain will be once more isolated from mainland Europe

MEPs want ambitious funding for cross-border projects to connect people

EU’s guidelines on net neutrality see the light although grey areas do remain

Why South Africa is on a path of economic renewal

Built by a woman: supporting the dreams of mum entrepreneurs

Texting is a daily source of stress for 1/3 of people – are you one of them?

Pandemic versus fear

A breath of fresh air: How three disused industrial areas became beautiful parks

Will the French let Macron destroy their party political system?

Pro-EU forces won a 70% triumph in the European elections

Norway has successfully enforced its foreign bribery laws but faces potential obstacles

EU is not only obsessed with Facebook but also blaims now innocent websites using social plugins to serve democratic dialogues?

Right-wing “sovranism” harm national identity

EU revengefully shows no mercy to Cameron by demanding a fast and sloppy Brexit now

What wealth managers can learn from family dynamics

How global food safety protects the planet and begins on the farm

OECD: Mind the financial gap that lies ahead

Why collaboration will be key to creating the workforce of the future

Green Deal: How MEPs wish to channel EU investment to sustainable activities

VW emissions scandal: While U.S. car owners are vindicated, Europe still unable to change its laws and protect its consumers

If on a summer’s night: is UK businesses’ “new deal” the only key to the “best of all worlds”?

The needs, challenges and power dynamics of refugee resettlement

A jingoistic Spanish ‘war’ from the past

Euro celebrates its 20th birthday

Students & Allies Unite Globally To Launch #Students_Against_COVID

This team of Saudi women designed an award-winning app to make the Hajj safer

Here’s how we get businesses to harmonize on climate change

Forty-two countries adopt new OECD Principles on Artificial Intelligence

No more lead in PVC to protect public health, say MEPs

‘Multiplicity’ of rights violations in Ukraine as fifth winter of conflict bites

5G: How a ‘legion of robots’ could help save the rhino

It’s Trump’s anti-globalization and inward-looking rhetoric that perturbs GOP and US

‘No shortcuts to a healthier world’: WHO chief sets out health priorities for the decade

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s