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India should tax air tickets to pay for AIDS drugs: UN

Reuters
Jun 06, 2012 at 01:41am IST

New Delhi: Millions of the world's poorest people could have easier access to life-saving drugs if India introduces an air ticket tax to help fund purchases of cheap medicines for HIV/AIDS, malaria and tuberculosis, a senior UN official said.

UNITAID, a UN agency which negotiates for cheap medicines from pharmaceutical manufacturers to treat deadly diseases, is lobbying countries such as India to join its air ticket levy initiative which began in 2006.

Under the programme, countries put a nominal amount on the cost of air tickets which funds UNITAID to buy drugs for patients in the developing world. Ten countries have imposed the levy, generating $200 million annually for cheap medicine.

India should tax air tickets to pay for AIDS drugs: UN

Countries put a nominal amount on the cost of air tickets which funds UNITAID to buy drugs for patients in the developing world.

"What we want in India is a similar system by which a very small contribution which is painless to the traveler can be applied to large numbers of travelers," UNITAID Executive Director Denis Broun told AlertNet in an interview.

"Since air traffic is very high in India, the small amount of levy makes a huge difference to the amount of drugs that we can purchase and the number of poor who can benefit from them."

HIV/AIDS, malaria and tuberculosis kill 4.4 million people each year, UNITAID says. Approximately 14.2 million people are in need of anti-retroviral drugs globally, yet more than half cannot afford them.

India's airlines are reeling under a debt load of $20 billion and lost $2 billion last year, as high fuel prices, a weakening rupee and competition kept fares low and costs high.

But the country boasts the fastest growing air passenger market of major economies with 61 million people traveling last year, and still growing.

"People are saying I am coming at the wrongest possible moment. You hear all these arguments, but they are absolutely bogus. It has no impact on government budgets, airline traffic or the economy."

Win-win for India

Broun, who met civil aviation and health officials, said he was proposing a tax of 10 rupees (18 U.S. cents) on domestic tickets and $1 on international flights. He said discussions were at a very early stage.

Chile charges $1 per ticket as their levy, while Brazil charges $2 for international flights, he said. French passengers pay one euro for domestic and four euros for international tickets.

Mali, Mauritius, Madagascar, Cameroon, Congo, Niger and South Korea had also implemented air-ticket levies, said Broun.

He said it was a win-win situation for India as 80 percent of the drugs bought by UNITAID are from Indian pharmaceutical firms and some of which were for Indian patients.

"It would be a good thing for India. First of all, Indian patients benefit - 35,000 Indian children are treated for HIV using drugs paid for by UNITAID," he said.

"We buy most of our drugs from India so in a sense what would the tax do? It would go back into the Indian economy into the pharmaceutical sector. So its difficult to find arguments to say it would be bad."

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