Stop taxing the poor patients
Demand to immediately withdraw the 15% General Sales Tax on Medicines

“If you can’t help them – dump them, seems like the policy of the government” said the representative of the TheNetwork for Consumer Protection while addressing a press conference. The press conference was organized to condemn the government decision and raise a demand for immediate withdrawal of 15% GST slapped on all kinds of medicines by the government.

Dr. Zafar Mirza sharply criticized Government’s policy as grossly unjust, exploitative and inequitable. He said that in the presence of already very high drug prices, the GST would serve as a last nail in the coffins of sick and poor. On the one hand health is considered as a basic human right and on the other hand, not only that government has failed to ensure provision of basic health services to the people (not more than 20% people are served through public health care system) but also it is making almost impossible for people to have financial access to needed treatments even if they want to buy it out of their shallow pockets. He termed the government action as “absolutely insensitive” on two accounts: one, that instead of protecting the poor it has planned to “earn” revenue from them and that too at the behest of IMF and two, the policy is absolutely blind to recognized market failures in health.

On 10th of December 2001 government announced drug price increase of 3% on controlled and 4% on decontrolled category of drugs respectively. Apparently a very benign increase in drug price but in fact the prices went up to 40%. Such an increase in medicine prices is due to the tricky policies of government, whose brunt is to be faced by the poor consumers. While still in a sate of shock due to the price increase in last December this new increase is the most dreadful news they expected.

The GST policy is symbolic of the elitist economy – where rich become richer and are diligently protected by the State and poor become poorer and are left to wither. The Rs. four billion revenue collected at the cost of sick and poor could easily be gathered from the elite classes by just making them to pay what they owe to the State in the form of unpaid taxes (total annual tax evasion amounts to Rs. 152 billion), defaulted loans (29% of total advances from public sector banks go astray) etc. not to mention the off-shore siphoned billions. Governement’s claim that collected Rs. four billion would be spent on health sector also sounds farcical as no specific policy in this regard has been made public.

It is a strangest and most damaging public policy which, people wonder, how the President Pervaiz Musharraf has endorsed. It is juxtaposed with  the stated objectives of the Government i.e. to make basic services of health and education accessible to the people! On the one hand there is a lot of lip service to poverty eradication and on the other hand poor are especially being targeted. Governments, in many countries take special measures to insulate the prices of basic goods and services from being kicked up by having special regulations. They are neither fully deregulated nor taxed in order to keep them affordable by the people, especially the lower classes. Many western countries, who champion the cause of free market economy, themselves formulate special economic and taxation policies back home to ensure the provision of basic services to their population. It seems like our Governments economic policy is becoming more loyal than the king.

Pakistan currently ranks 135th in the human development scale out of 174 countries and its health care system ranks 122nd among 191 countries in terms of “over all health system performance”.

Dr. Zafar Mirza said that prices of medicines are matters of life and death for the ill and the poor people. Keeping in view the inelasticity of demand, poor buy medicines even if they have to sell their other belongings – and yet Government deliberately wants to further increase the drug prices! >From public health perspective Government should not forget that untreated communicable diseases, because of people’s lack of access to the needed medicines can further increase the burden of these diseases on society.

TheNetwork has demanded an immediate withdrawal and review of GST policy on medicines before a public outcry erupts. The organization is going to run a campaign against this policy and it has also initiated a study into this area and soon a detailed document would be released on the implications of this policy.