The UK and US have established a landmark trade agreement that will preserve no tariffs on British pharmaceutical shipments being sold in the American market.
Agreement Details of the Deal
Under the terms of the agreement, the UK has pledged to raise spending on pharmaceuticals through the NHS. This pledge guarantees that tariffs on these vital products will be held at nothing for a period of 36 months.
This agreement follows earlier statements to significantly raise import taxes on patented pharmaceutical products, with increases discussed up to double the cost.
"This deal with the UK bolsters the international landscape for new treatments and brings much-needed fairness to transatlantic medicine commerce," an announcement said.
Economic Impact
Pharmaceuticals constitute one of the the United Kingdom's most significant goods shipped to the United States, which is by far the biggest buyer for major companies like GSK and AstraZeneca.
Statistics indicate that in the one-year period to the end of September, the UK sold drugs valued at billions to the US. This figure accounted for a significant portion of all goods exports in that period.
"This agreement protects work, increases funding and paves the way for the UK to establish itself as a international leader for biotech and pharma," the Business and Trade Secretary commented.
Key UK Commitments
The pact entails several specific commitments from the UK:
- Price Threshold Increase: The UK will lift the price threshold at which it deems new therapies to be prohibitively costly by 25%.
- Increased NHS Spending: There is a target to increase overall health service expenditure on drugs from 0.3% of Gross Domestic Product to 0.6 percent over the next decade.
- Refund Ceiling: The amount drug companies must refund to the NHS to control costs will be capped at 15%. Previously, refunds topped 20%.
Recent Tensions
The pact takes place against a long-running row between the sector and the UK government over medicine costs and NHS adoption.
These tensions were intensified by arguments that US customers were paying several times more for the identical medicines than patients in the UK and Europe.
Recently, several large pharmaceutical investments in the UK have been delayed or scrapped, while major expansions have been announced toward US facilities.
A senior figure publicly accepted that the NHS must spend more on medicines, noting that its spending on drugs had declined as a proportion of its total funding over the previous ten-year period.
