Britain and America have hammered out a key bilateral deal that will maintain no tariffs on UK pharmaceutical shipments going into the US market.
Agreement Details of the Accord
As part of the deal, the UK has agreed to raise expenditure on medicines through the National Health Service (NHS). This pledge secures that import taxes on these crucial goods will be held at nothing for a timeframe of the next three years.
This deal follows recent threats to dramatically increase duties on branded pharmaceutical products, with increases mentioned reaching double the cost.
"This arrangement with the United Kingdom reinforces the worldwide climate for new treatments and establishes much-needed balance to transatlantic medicine commerce," an announcement noted.
Commercial Impact
Medicines are one of the Britain's largest exports to the America, which is easily the biggest buyer for large UK drugmakers.
Trade data show that in the year leading up to last September, the UK shipped drugs totaling over eleven billion pounds to the US. This amount accounted for nearly one-fifth of total UK exports in that span.
"This deal secures employment, boosts funding and sets the stage for the UK to emerge as a global hub for biotech and pharma," the Business and Trade Secretary stated.
Key UK Commitments
The agreement includes several specific commitments from the UK:
- Price Threshold Increase: The UK will raise the affordability limit at which it considers new therapies to be unaffordable by twenty-five percent.
- Boosted Medicine Funding: There is a goal to increase overall NHS spending on drugs from 0.3 percent of GDP to 0.6 percent over the coming ten years.
- Refund Ceiling: The percentage drug companies must pay back to the NHS to control costs will be capped at 15%. Last year, refunds topped 20%.
Recent Tensions
The deal comes amid a protracted dispute between the drug companies and the UK government over spending levels and NHS adoption.
This friction were intensified by arguments that US patients were paying several times more for the same drugs than patients in the UK and Europe.
Recently, several major drug company projects in the UK have been delayed or scrapped, while major investments have been pledged toward US facilities.
One official publicly accepted 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 last ten years.
