The United Kingdom and the United States have announced a significant bilateral deal that will guarantee no levies on British pharmaceutical shipments entering the US market.
The Terms of the Pact
As part of the deal, the UK has committed to raise spending on medicines through the public health system. This pledge secures that tariffs on these key exports will remain at nothing for a period of three years.
This development follows recent warnings to significantly raise tariffs on patented drug products, with increases discussed as high as 100%.
"This agreement between the UK reinforces the international landscape for new treatments and brings long-overdue balance to transatlantic pharmaceutical trade," a release said.
Trade Impact
Medicines are one of the Britain's largest exports to the United States, which is by far the largest destination for large companies like GSK and AstraZeneca.
Statistics reveal that in the 12 months leading up to last September, the UK exported drugs totaling £11.1bn to the US. This amount accounted for nearly one-fifth of total UK exports in that span.
"This agreement protects work, increases capital expenditure and paves the way for the UK to emerge as a international leader for life sciences," the Business and Trade Secretary remarked.
Key British Pledges
The deal includes several specific commitments from the United Kingdom:
- Price Threshold Increase: The UK will lift the affordability limit at which it deems new therapies to be unaffordable by a quarter.
- Boosted Medicine Funding: There is a aim to raise overall public funding on drugs from 0.3 percent of Gross Domestic Product to 0.6 percent over the following ten-year period.
- Rebate Cap: The percentage pharmaceutical firms must pay back to the NHS to control costs will be limited at fifteen percent. Last year, rebates were more than twenty percent.
Broader Context
The deal takes place against a ongoing dispute between the sector and the British authorities over medicine costs and NHS adoption.
This friction were intensified by claims that US patients were charged several times more for the same drugs than consumers in the other developed nations.
Over the last 18 months, several significant pharmaceutical investments in the UK have been delayed or scrapped, while multi-billion-dollar investments have been announced toward projects in the United States.
The Science Minister acknowledged that the NHS must invest a greater share on medicines, noting that its spending on drugs had shrunk as a proportion of its overall budget over the last ten years.
