WTO agrees rules

When pharmaceutical companies dilute imported medicinal ingredients to make a final product they have, in most instances, legally created a new locally manufactured medicine, the rules of origin committee of the World Trade Organisation (WTO) has ruled.

The decision means that worldwide, such products would in future be affected by duties, quotas and other import and export regulations relating to the country where they were diluted, rather than where the ingredients were produced.

This ruling will apply to all WTO members and is part of an ongoing process to harmonise rules of origin internationally.

However, the dilution decision will not come into force until agreement is reached on all the 5,500 tariff lines recognised by the WTO, a task likely to stretch into next year and maybe beyond.

Meanwhile, the WTO is also considering other origin issues such as whether dosing and mixing ingredients should create a legally new product.