The UK and US have reached a major bilateral deal that will keep no tariffs on British medicine shipments going into the American market.
Key Provisions of the Deal
Under the terms of the agreement, the UK has committed to raise expenditure on drugs through the NHS. This commitment secures that tariffs on these key products will stay at nothing for a timeframe of 36 months.
This agreement follows earlier statements to hike tariffs on patented drug products, with figures discussed as high as 100%.
"This agreement with the Britain reinforces the international landscape for new treatments and brings long-overdue fairness to American-British drug exports," a release said.
Economic Impact
Medicines are one of the UK's biggest exports to the US, which is clearly the primary destination for large companies like GSK and AstraZeneca.
Export figures show that in the one-year period prior to September, the UK sold drugs worth over eleven billion pounds to the US. This amount accounted for 17.4% of all goods exports in that timeframe.
"This deal safeguards employment, increases funding and paves the way for the UK to emerge as a international leader for biotech and pharma," the Business and Trade Secretary remarked.
Specific UK Commitments
The agreement includes several key changes from the British government:
- Price Threshold Increase: The UK will raise the cost ceiling at which it deems new medicines to be too expensive by twenty-five percent.
- Increased NHS Spending: There is a target to increase total NHS spending on medicines from 0.3 percent of Gross Domestic Product to 0.6% over the coming ten years.
- Refund Ceiling: The sum pharmaceutical firms must return to the NHS to stay within budget will be limited at fifteen percent. Previously, repayments topped 20%.
Industry Background
This agreement comes amid a protracted tension between the sector and the British authorities over spending levels and NHS adoption.
This friction were exacerbated by assertions that US customers were paying several times more for the same drugs than people in the other developed nations.
In recent months, several significant pharmaceutical investments in the UK have been delayed or abandoned, while major expansions have been pledged toward US facilities.
A senior figure stated that the NHS must increase expenditure on drugs, noting that its expenditure on drugs had declined as a percentage of its overall budget over the last ten years.
