The current form of the clawback tax limits investments in the pharma sector, AmCham says

Newsroom 11/10/2011 | 16:08

The American Chamber of Commerce in Romania (AmCham Romania) recommends that the current clawback tax be altered since it form sends a strong negative signal towards the investment climate.

 “We consider that the clawback tax, as it was adopted, significantly limits the development of investments in the pharmaceutical sector as it does not ensure the necessary predictability in setting the annual budget. At the same time, the adopted measure has no economic logic as long as it taxes only pharmaceutical companies on incomes generated by the entire supply chain” stated Alexandra Gatej, AmCham Romania President.

 “A realistic budget allocation for medicines must take into account the real needs of the patients and the health status of the population. Consumption is directly related to people’s needs for medicines and to the general health status of Romanians. On the other hand, a realistic budget has to consider the consumption level of the previous year. In all European countries where a clawback tax is applied, a maximum treshhold has been set for the industry to cover, which is what we are also requesting for Romania” said Pascal Prigent, President of the AmCham Romania Healthcare Committee.

 AmCham Romania representatives have also signaled the fact that drug producers are the only ones held accountable for the budget control, according to the clawback mechanism enforced as of October 1.

 In fact, they say, market growth is not controlled by producers, the consumption increase in absolute terms compared to the quarterly allocated budget is determined by the drug prescriptions and inefficiencies in the healthcare system.

 So, by way of introducing such tax, the state transfers on the private sector both the system inefficiencies and a virtual increase of the drug consumption, says AmCham.

 AmCham Romania recommends capping the clawback tax percent and using the producer price as base in calculating the clawback tax, so that drug manufactures will not be the only ones to cover costs related to potential overspending compared to the initial budget allocated for drugs, thus authorities penalizing their presence on the market.

 From a fiscal perspective, AmCham Romania emphasizes that the wording of Ordinance 77/2011 may lead to situations in which same drug deliveries could be taxed twice. Moreover, the new system implies applying clawback on VAT, which also leads to another type of double taxation, thus breaching basic fiscal principles.

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