Ministry mulls reduced VAT for medicines in Latvia

The Ministry of Health has prepared a proposal to reduce the price of medicines by reducing of value-added tax (VAT) for from 12% to 5%, Health Minister Daniels Pavļuts said on June 7 after the Coalition meeting.

The Minister for Health stressed the need for such a step, as medicines are needed also by the most socially vulnerable groups of people with low purchasing power. The proposal is being directed by the HM in relation to the 2023 budget.

Latvia has one of the lowest funding for healthcare in the EU, as well as relatively limited access to medicines for residents, Pavļuts said.

The proposal, which includes both requirements for budget financing and those that can be implemented without additional means, was presented by Pavļuts to the coalition partners on Monday.

The Ministry proposes to determine the permissible surcharge of a wholesaler, not as a percentage of the manufacturer's price, but at a fixed level, for example, the surcharge of medicinal products above 200 euros should not exceed six euros, just as it has been established in Lithuania and Estonia.

VM also calls for the setting of the maximum allowable total patient co-payment amount and a review of the principles of drug pricing.

The conceptual report has been released for public consultation by June 16 and suggestions can be submitted electronically via the Law Portal.

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