The UK and US have signed a major commercial pact that will maintain zero duties on UK medicine products going into the American market.
The Terms of the Deal
As part of the deal, the UK has pledged to raise funding on medicines through the National Health Service (NHS). This commitment ensures that import taxes on these key products will remain at zero for a period of the next three years.
This development comes after previous warnings to significantly raise tariffs on patented pharmaceutical imports, with potential rates floated up to double the cost.
"This agreement between the UK strengthens the international landscape for innovative medicines and establishes much-needed equity to American-British pharmaceutical trade," a release declared.
Trade Importance
Medicines constitute one of the Britain's largest exports to the US, which is clearly the biggest buyer for large companies like GSK and AstraZeneca.
Trade data indicate that in the one-year period to the end of September, the UK shipped medicines totaling billions to the US. This value made up a significant portion of all goods exports in that timeframe.
"This deal protects employment, stimulates capital expenditure and sets the stage for the UK to establish itself as a international leader for medical research," the Business and Trade Secretary commented.
Key British Pledges
The deal entails several notable pledges from the United Kingdom:
- Revised Affordability Limit: The UK will raise the affordability limit at which it judges new therapies to be prohibitively costly by a quarter.
- Boosted Medicine Funding: There is a goal to raise total NHS spending on medicines from 0.3% of GDP to 0.6% over the following ten-year period.
- Rebate Cap: The amount manufacturers must refund to the NHS to control costs will be restricted at fifteen percent. Previously, rebates exceeded twenty percent.
Recent Tensions
This agreement takes place against a long-running dispute between the sector and the UK government over medicine costs and regulatory access.
These tensions were heightened by claims that American patients were charged a premium for the equivalent treatments than patients in the Britain and the EU.
In recent months, several significant manufacturing plans in the UK have been delayed or abandoned, while substantial expansions have been directed toward projects in the United States.
The Science Minister acknowledged that the NHS had to invest a greater share on medicines, noting that its spending on drugs had shrunk as a proportion of its total funding over the previous ten-year period.
