The UK and US have reached a key bilateral deal that will preserve zero tariffs on UK medicine exports entering the American market.
The Terms of the Deal
As part of the deal, the UK has pledged to raise expenditure on pharmaceuticals through the National Health Service (NHS). This move guarantees that import taxes on these crucial goods will stay at zero for a period of three years.
This development follows earlier warnings to dramatically increase duties on patented pharmaceutical products, with potential rates discussed reaching double the cost.
"This deal between the UK strengthens the international landscape for innovative medicines and brings long-overdue balance to transatlantic drug exports," a release noted.
Trade Impact
Medicines represent one of the UK's most significant export categories to the America, which is by far the biggest destination for large British pharmaceutical firms.
Export figures indicate that in the year leading up to last September, the UK exported drugs worth billions to the US. This value made up 17.4% of all goods exports in that timeframe.
"This agreement secures employment, stimulates investment and paves the way for the UK to become a global hub for biotech and pharma," a minister commented.
Key UK Commitments
The pact involves several key changes from the UK:
- Price Threshold Increase: The UK will increase the price threshold at which it judges new therapies to be too expensive by 25%.
- Boosted Medicine Funding: There is a aim to double overall NHS spending on drugs from 0.3% of the national economy to 0.6 percent over the following ten-year period.
- Payback Limit: The sum drug companies must refund to the NHS to stay within budget will be capped at 15%. Previously, refunds were more than twenty percent.
Recent Tensions
The pact comes amid a ongoing row between the pharmaceutical industry and the British authorities over drug pricing and NHS adoption.
The disagreement were heightened by arguments that US customers were charged several times more for the equivalent treatments than consumers in the UK and Europe.
Recently, several large drug company projects in the UK have been delayed or abandoned, while multi-billion-dollar expansions have been directed toward US facilities.
The Science Minister stated that the NHS must spend more on medicines, noting that its budget allocation on drugs had shrunk as a percentage of its total funding over the past decade.
