The UK and US have hammered out a significant trade agreement that will keep no import taxes on British drug products entering the American market.
Agreement Details of the Deal
Under the terms of the agreement, the UK has pledged to boost funding on drugs through the NHS. This pledge ensures that tariffs on these vital exports will stay at zero for a period of three years.
This deal is in response to recent threats to significantly raise tariffs on patented pharmaceutical imports, with figures floated reaching 100%.
"This arrangement between the UK reinforces the worldwide climate for innovative medicines and introduces much-needed balance to American-British drug exports," a statement noted.
Commercial Impact
Drugs constitute one of the the United Kingdom's biggest export categories to the US, which is clearly the biggest buyer for major companies like GSK and AstraZeneca.
Export figures show that in the year leading up to the third quarter, the UK shipped pharmaceutical products totaling billions to the US. This amount made up a significant portion of all goods exports in that span.
"This agreement secures work, stimulates funding and paves the way for the UK to become a worldwide center for medical research," a minister commented.
Key British Pledges
The deal includes several specific commitments from the United Kingdom:
- Price Threshold Increase: The UK will lift the cost ceiling at which it judges new medicines to be unaffordable by a quarter.
- Higher Drug Budget: There is a target to raise total health service expenditure on drugs from 0.3% of the national economy to 0.6 percent over the next decade.
- Payback Limit: The sum manufacturers must refund to the NHS to control costs will be restricted at 15%. Last year, refunds were more than twenty percent.
Industry Background
The pact takes place against a long-running tension between the drug companies and the ministers over spending levels and regulatory access.
These tensions were intensified by assertions that US customers were charged several times more for the same drugs than consumers in the other developed nations.
Recently, several major drug company projects in the UK have been delayed or scrapped, while major funding commitments have been announced toward American operations.
One official stated that the NHS needed to spend more on treatments, noting that its expenditure on drugs had decreased as a share of its resources over the previous ten-year period.
