press release, 18. June 2018

Reducing micro-pollutants in water: How to finance?

UFZ researchers release report about introduction of a regulatory tax on pharmaceutical products in Germany

Pharmaceutical residues from domestic dwellings, hospitals and agriculture are contaminating our water. The introduction of a strategy to handle micro-pollutants aims to solve this problem in Germany in the future. However, the issue of how this is to be financed has to be addressed. One option would be the introduction of a payment scheme for the use of pharmaceutical products that pose a risk to water sources and supplies. For this reason, a mechanism for charging for pharmaceutical products, which takes into account both the legal and economic issues, has been discussed in greater detail in a scientific report produced by Helmholtz Centre for Environmental Research researchers for the Federal Environmental Agency (UBA) in Germany.

The effects of the medicines we take often reach far beyond our bodies. This is because water treatment plants are currently unable to remove many of the pharmaceutical residues, such as hormones or the analgesic Diclofenac, from waste water. These residues are more or less impervious to the treatment process, and therefore pass into the "treated" waste water and then into the environment. Residues of prescribed veterinary medicines are also a problem in the agricultural industry. They pass into animal manure, which is spread on the fields, where the rain washes it into rivers and into the ground water. These micro-pollutants can damage aquatic organisms and represent a serious environmental problem. And that's not all: they can even pass through the drinkable water barrier, and might well have negative effects on our health. So, what can we do to curb the incursion of micro-pollutants into our water?

Of course, it would be a good idea just to avoid using substances that pollute water in the first place. Nevertheless, this is not always possible - especially when it comes to medicine. However, there is a technical solution: "As part of a policy mix the "fourth treatment stage", as we call it, is a proven method for removing the majority of micro-pollutants from waste water. It can simply be implemented after the three standard treatment stages in selected waste water treatment plants", explained Prof. Erik Gawel from the Helmholtz Centre for Environmental Research. "This involves mature technology, which is available at an acceptable cost." However, the question of how to finance the installation of this fourth treatment stage at selected waste water treatment plants in Germany needs to be resolved, unless everything is to be paid for by sewerage charges. The introduction of a charging scheme for pharmaceutical products is discussed here, as a means of making manufacturers take some responsibility before the residues enter the water system.

At the request of the German Federal Environmental Agency (UBA), Erik Gawel and his colleagues at the Helmholtz Centre for Environmental Research have written a report in which they described a strategy for charging for pharmaceutical products, taking into account all the legal and economic issues involved. "From a legal point of view, introducing a charging scheme for pharmaceutical products wouldn't cause any particular legal problems and it would actually make good economic sense," said the environmental economist. "Tax revenues could also provide adequate finance for retro-fitting the fourth treatment stage in selected waste water treatment plants throughout Germany." Although it would be possible to finance this through taxation, or increasing the sewerage charge for the treatment plants involved, the scientist thinks this option would be unfair. "The production and use of substances that damage our water generate costs that polluters should bear. But why should all taxpayers have to foot the bill?", asked Gawel. "From our point of view, making the polluters the ones who pay would be fairer. And only increasing sewerage charges for the upgraded treatment plants would simply be arbitrary, because pharmaceutical residues affect our water everywhere."

The researchers have proposed a three-tier tariff for handling water pollutants: if it is unclear whether a pharmaceutical product actually causes damage to water, either the manufacturer or its delivery point (e.g. pharmacy) must pay a charge for the product's potential effect on water, as a precaution. An increased fee would be charged if it is clear that the product is a water pollutant. However, if it can be proven that the pharmaceutical product does not have any damaging effects on water, no fee would be charged for its active ingredients. "Manufacturers would have to prove that their products were not harmful to water", said Gawel. "However, strict legal requirements would apply to the test processes used by the manufacturers." The researchers also considered the possibility of having the contributory payment for human medicines reimbursed by health insurance companies. "This might only involve a very small, trivial amount of money, maybe as little as 50 Euro cents", said Gawel. "The primary intention is to create an awareness that the use of pharmaceutical products containing substances that are hazardous to water generates additional costs for society as a whole. If the contributory payment option was implemented, it would not be applicable in the case of this trivial amount."

In their report, the Helmholtz Centre for Environmental Research researchers strongly advocate the introduction of a charging scheme for pharmaceutical products as one of a range of mechanisms for financing the fourth treatment stage, and providing an effective, reasonably priced means of solving the problem of micro-pollutants. A comparable pesticide tax could make the case for micro-pollutants stemming from plant protection measures as well. "A charge on products ending up in micro-pollutants would make good commercial sense, would be legally possible, and also be very fair, in terms of its social impact", said Gawel. "Until now, the pharmaceutical industry has taken little responsibility for the damage that residues of its products have caused to our water sources and water supplies. Charging for pharmaceutical products would have an important compensatory function as part of a comprehensive strategy for combating micro-pollutants in Germany."

Publikation:
Gawel, E., Köck, W., Fischer, H., Möckel, S. (2017): Arzneimittelabgabe - Inpflichtnahme des Arzneimittelsektors für Maßnahmen zur Reduktion von Mikroschadstoffen in Gewässern, im Auftrag des Umweltbundesamtes, UBA-Texte115/2017, 91 S. Texte Umweltbundesamt 115/2017. Umweltbundesamt, Dessau-Roßlau, 91 S.
https://www.umweltbundesamt.de/publikationen/arzneimittelabgabe-inpflichtnahme-des-arz

Further information

Prof. Dr. Erik Gawel
Head of the UFZ Department of Economics
erik.gawel@ufz.de

UFZ press office

Susanne Hufe
Phone: +49 341 235-1630
presse@ufz.de