Patent Medicines. In popular language this term is very loosely applied; being used to include not only patent medicines strictly so called, but also all proprietary medicines and all medicines liable to stamp-duty. The exact meaning of the technical phrase 'patent medicine' has never been defined by a legal judgment, but it is almost certain that it would only be held to include such medicines as are sold under the authority of letters-patent (i.e. for which a patent has been taken out), and that it does not include other dutiable medicines. The number of medicines for the making of which patents have been taken out in Britain is comparatively small, amounting only to about 220 articles between the years 1711 and 1887, and most of these are no longer in use. Patented medicines, therefore, constitute only a very small proportion of those medicinal preparations which are liable to stamp-duty. Medicines which are so liable embrace a very wide category. A preparation to be liable to stamp-duty must be one which is to be 'used or applied externally or internally as a medicine or medicament for the prevention, cure, or relief of a disorder or complaint incident to or in any wise affecting the human body.' Then it must also be brought under one of the following six causes, which constitute liability to duty: (1) the seller must have or claim to have an occult secret or art for making or preparing, or (2) an exclusive right or title to making or preparing; or (3) it must have been patented; or (4) it must be, or have been, recommended to the public as a nostrum (Lat. noster, 'our') or proprietary medicine, or (5) as a specific, or (6) as beneficial for the prevention, cure, or relief of any disease. Any one of these entails liability to stamp-duty independently of the others.
All other medicines are exempt from stamp-duty; that is to say, drugs the 'denominations, properties, qualities, virtues, and efficacies' of which are known and admitted in medicine, and in the making or preparing of which no secret art or exclusive right is claimed by any person. Instruments, electric and galvanic apparatus, liver-pads, and similar appliances, cigarettes, preparations intended to be burned and inhaled or used as disinfectants, natural products, mineral waters, lozenges and confectionery, articles of toilet and perfumery, are all as a rule exempt from stamp-duty unless under special circumstances. The first tax on proprietary and secret medicines in Great Britain was imposed in 1783, when all persons who sold medicines and who had not been bred as doctors or apothecaries were required to take out a license on which they paid stamp-duty, and in addition ad valorem stamp-duties were imposed on the medicines. It was estimated by the then Chancellor of the Exchequer that the new tax would yield £15,000 per annum. This act was amended two years later, and has been so altered by thirteen subsequent acts that none of its original provisions now remain. The patent-medicine stamp is a narrow label convenient for pasting on to a bottle or box. Such stamps are supplied by the commissioners of stamps, but for an extra payment any person may have the privilege of having stamps printed in the stamping department of Somerset House for his own exclusive use and on his own forms. The stamp affords no government guarantee of purity; its presence on any bottle or package simply signifies that the duty has been paid. The medicine must be stamped before it is sold either wholesale or retail, or for foreign or home consumption. Medicines are not considered liable to duty as long as they remain in bulk, nor are samples distributed gratis liable. The rates of duty vary from 1½d. on a package not exceeding 1s. in value to £1 on a package upwards of 50s. in value. The vendors of dutiable medicines are required to take out a yearly license, for which they pay 5s. Penalties are enforced for any infringement of the regulations. In 1860 the medicine-stamp duty yielded a revenue of £43,692; in 1870, £72,353; in 1880, £135,366; the year ending March 31, 1890, it was £217,264. See Alpe, Handy Book of Medicine Stamp Duty.