The UK and US have hammered out a important bilateral deal that will maintain zero duties on British pharmaceutical products entering the American market.
Agreement Details of the Deal
Under the terms of the agreement, the UK has pledged to boost spending on drugs through the NHS. This pledge secures that tariffs on these vital products will be held at zero for a duration of the next three years.
This development comes after recent statements to hike tariffs on patented drug products, with increases mentioned up to double the cost.
"This deal with the UK strengthens the worldwide climate for innovative medicines and brings long-overdue fairness to American-British drug exports," a statement said.
Trade Significance
Pharmaceuticals are one of the UK's most significant goods shipped to the US, which is easily the biggest buyer for major companies like GSK and AstraZeneca.
Export figures show that in the one-year period leading up to the third quarter, the UK sold pharmaceutical products worth £11.1bn to the US. This figure represented a significant portion of British export trade in that period.
"This deal secures work, increases investment and paves the way for the UK to emerge as a international leader for medical research," a minister commented.
Key British Pledges
The agreement entails several key pledges from the British government:
- Price Threshold Increase: The UK will increase the cost ceiling at which it judges new treatments to be unaffordable by a quarter.
- Boosted Medicine Funding: There is a goal to double overall NHS spending on medicines from 0.3 percent of GDP to 0.6% over the coming ten years.
- Payback Limit: The amount drug companies must refund to the NHS to stay within budget will be capped at fifteen percent. Previously, repayments were more than 20%.
Industry Background
This agreement follows a long-running dispute between the sector and the British authorities over medicine costs and approval rates.
These tensions were exacerbated by claims that American consumers were paying several times more for the equivalent treatments than patients in the Britain and the EU.
Over the last 18 months, several large drug company projects in the UK have been halted or abandoned, while multi-billion-dollar investments have been announced toward projects in the United States.
The Science Minister publicly accepted that the NHS must increase expenditure on treatments, noting that its spending on drugs had decreased as a percentage of its overall budget over the past decade.
