Pharmaceutical executive calls proposed VAT on tirzepatide “a measure pulled out of thin air”

A proposal to impose a 5% value-added tax on tirzepatide has sparked strong opposition from Paraguay's pharmaceutical sector. Óscar Vicente Scavone said the measure lacks a sound justification and could make an important treatment less accessible.

“Taxing a medicine that fights overweight and obesity, improves cholesterol and blood sugar, reduces fat, and has no side effects is completely pulled out of thin air,” Scavone said. The proposal was initially examined by the National Directorate of Tax Revenue, led by Óscar Orué, after being promoted by lawmaker Carlos Marcial Godoy of Caaguazú.

Scavone noted that medicines in Paraguay already receive preferential tax treatment and generally pay a reduced 5% rate. He said that arrangement helps keep treatments accessible to patients and final consumers. Sales of GLP-1 inhibitors, the category that includes tirzepatide, have grown moderately, by between 4% and 4.5%, he said.

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Taxing a medicine that fights overweight and obesity, improves cholesterol and blood sugar, reduces fat, and has no side effects is completely pulled out of thin air.

He also addressed the medicine's lower price in Paraguay compared with Brazil. According to Scavone, Brazil has active patents that strongly protect the product, while Eli Lilly did not file a local patent in Paraguay. That difference has allowed greater freedom to develop and market the product in Paraguay.

Scavone urged health and economic authorities to encourage the use of innovative treatments rather than impose additional taxes. “In the long run, the result is a direct benefit to public health and lower spending for the state,” he said.

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In the long run, the result is a direct benefit to public health and lower spending for the state.