US Debates Dropping Duty for Drug Intermediates Imports

21-Jul-2013 - Last updated on 22-Jul-2013 at 13:40 GMT

Related tags International trade Import

Import duties on some pharma intermediates could be suspended temporarily under legislation being debated in the US House of Representatives.

The current “Miscellaneous Tariff Bill” seeks to grant temporary duty suspension on a wide range of goods imported to the US, including some chemical intermediates used to make drugs.

There are certain caveats. Firstly, the duty waiver can only be applied to goods that are not produced in the US. The other key point is that US Customers Revenue lost as a result cannot total more than $500,000 (€379,947).

The proposals have been welcomed by a range of industry groups –from sports equipment manufacturers and cobblers’ associations to the US Chamber of Commerce – which all describe the plans as a much needed boost for American manufacturers.

The Society for Chemical Manufacturers and Affiliates (SOCMA) – which counts drug industry suppliers like Lonza, Ashland, Albemarle, Novasep and Cambridge Major Labs as members – also backs the planned duty waivers.

Justine Freisleben, Manager of the SOCMA Government Relations team told in-Pharmatechnologist.com that: “Granting duty-free access on inputs into US manufacturing processes supports the US manufacturing base and the production of higher value added products.

“Other countries have similar policies, such as Canada, the EU and Brazil. US chemical intermediate importers compete against other countries as well that have the advantage of locally sourcing these products and not paying tariffs.

She added that: “This legislation helps level the playing field, especially when companies are importing to then export, so companies are not paying tariffs on imports and having customers pay tariffs on their exported products increasing the price of goods.”

Freisleben rejected the suggestion that removing the duties would see US manufacturers import more chemical intermediates to the detriment of drugmakers elsewhere.

“With the $500,000 ceiling, I would not anticipate such a great amount of imports that it would divert typical supply chains. And to my knowledge, this has not happened in years past.”

A full list of the chemicals for which temporary duty waivers are being sort is available here.