The UK and US have announced a major trade agreement that will maintain zero duties on British medicine exports going into the US market.
Agreement Details of the Deal
As part of the deal, the UK has committed to increase spending on pharmaceuticals through the NHS. This move secures that tariffs on these key goods will stay at zero for a duration of 36 months.
This development is in response to recent statements to hike tariffs on patented pharmaceutical imports, with figures discussed as high as double the cost.
"This deal with the Britain strengthens the international landscape for cutting-edge drugs and brings long-overdue balance to transatlantic drug exports," a statement said.
Trade Impact
Pharmaceuticals represent one of the the United Kingdom's most significant exports to the America, which is clearly the largest buyer for major UK drugmakers.
Export figures reveal that in the 12 months to the end of September, the UK sold drugs valued at £11.1bn to the US. This value accounted for nearly one-fifth of total UK exports in that period.
"This deal safeguards work, stimulates funding and paves the way for the UK to emerge as a global hub for medical research," a minister stated.
Specific British Pledges
The deal entails several specific changes from the British government:
- Price Threshold Increase: The UK will lift the cost ceiling at which it judges new treatments to be unaffordable by 25%.
- Increased NHS Spending: There is a aim to double total NHS spending on treatments from 0.3 percent of the national economy to 0.6 percent over the following ten-year period.
- Payback Limit: The percentage drug companies must pay back to the NHS to control costs will be capped at fifteen percent. In the past, repayments exceeded 20%.
Recent Tensions
This agreement comes amid a ongoing tension between the drug companies and the UK government over spending levels and approval rates.
This friction were intensified by assertions that US patients were paying several times more for the equivalent treatments than consumers in the UK and Europe.
Over the last 18 months, several major manufacturing plans in the UK have been paused or scrapped, while multi-billion-dollar expansions have been pledged toward US facilities.
The Science Minister stated that the NHS must increase expenditure on medicines, noting that its budget allocation on drugs had declined as a proportion of its total funding over the last ten years.
