Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

ZANTAC IMPORT DUTY SUSPENSION IS APPROPRIATE ISSUE FOR GATT

Executive Summary

ZANTAC IMPORT DUTY SUSPENSION IS APPROPRIATE ISSUE FOR GATT, SmithKline Beecham suggests in June 12 comments to the House Ways & Means Committee. As part of its objection to a House bill (HR 1963) requesting a four-year suspension of the 3.7% ad valorem tax on Glaxo's anti-ulcer ingredient ranitidine, SmithKline Beecham proposes that "Congress should now defer the ranitidine matter to the GATT [General Agreement on Trade and Tariffs] Round." Deferring the issue to the GATT talks would allow U.S. negotiators to "ask for something in return" for the tariff concession, SmithKline Beecham recommended. As an example of one possible quid pro quo, SmithKline suggested "the elimination of the 4% tariff" the company pays on Tagamet (cimetidine) imports to Japan. SB's comments represent a continuation of the company's campaign to prevent the Glaxo tariff relief. SmithKline was successful in blocking a similar bill last year due to Congress' policy of approving only "noncontroversial" suspensions. The controversy is unusual within the pharmaceutical industry, which generally has supported the suspension of all duties. SB appears to be alone among anti-ulcer marketers in its quest: Lilly, Merck and Marion Merrell Dow all supported the Glaxo bill in 1990. The ranitidine import bill is one of 233 tariff bills submitted in the House this year; about one-third of the bills concern pharmaceutical products, according to a Ways & Means/Trade subcommittee staffer. The subcommittee expects that only a "half- dozen" of the bills may be subject to hearings in mid-September to assess the impact of the legislation on domestic competition. The dispute over the anti-ulcer drug is not likely to require a hearing this year given the thorough examination of the issue last year, the staffer noted. Both Glaxo and SmithKline Beecham testified last September at a hearing, which was held after the Zantac provision had been withdrawn from trade legislation in July ("The Pink Sheet" Oct. 1, T&G-4). In addition, the International Trade Commission conducted a review at the request of the Senate Finance Committee and submitted a report in February 1991 ("The Pink Sheet" Feb. 18, T&G-5). Glaxo hopes the ITC report will help disprove SmithKline Beecham's claims that the tariff suspension puts it at a competitive disadvantage and thereby remove the controversy now associated with the ranitidine duty suspension. In its most recent comments to the subcommittee, SmithKline Beecham references the ITC estimates that Tagamet sales would probably decline only $ 5 mil.-$ 8 mil. a year if the duty were lifted (1990 U.S. sales were $ 560 mil.) while Zantac, with 1990 domestic sales of $ 1.3 bil., might add an additional $ 24 mil.-$ 29 mil. Despite the relatively minor change, SmithKline Beecham continues to argue that "the U.S. government would be perversely interfering in the competitive marketplace by subsidizing the importing company whose high-priced medicine holds the dominant share."

You may also be interested in...



Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth

UsernamePublicRestriction

Register

ID007083

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel