The UK and US have concluded a important bilateral deal that will preserve zero levies on British drug products entering the US market.
The Terms of the Deal
As part of the deal, the UK has pledged to increase funding on drugs through the public health system. This pledge guarantees that tariffs on these key products will be held at zero for a period of three years.
This deal is in response to previous statements to significantly raise tariffs on branded pharmaceutical products, with increases discussed up to one hundred percent.
"This deal between the Britain bolsters the international landscape for innovative medicines and establishes long-overdue balance to transatlantic drug exports," an announcement said.
Economic Impact
Medicines are one of the Britain's most significant goods shipped to the America, which is easily the biggest destination for leading companies like GSK and AstraZeneca.
Statistics show that in the 12 months prior to last September, the UK sold drugs valued at over eleven billion pounds to the US. This amount accounted for 17.4% of all goods exports in that span.
"This deal secures employment, stimulates investment and paves the way for the UK to establish itself as a worldwide center for medical research," the Business and Trade Secretary remarked.
Specific British Pledges
The agreement includes several key commitments from the British government:
- Revised Affordability Limit: The UK will raise the price threshold at which it considers new medicines to be unaffordable by twenty-five percent.
- Increased NHS Spending: There is a target to double total NHS spending on medicines from 0.3 percent of the national economy to 0.6% over the coming ten years.
- Refund Ceiling: The percentage drug companies must refund to the NHS to prevent overspending will be capped at 15%. Previously, rebates exceeded 20%.
Recent Tensions
The pact follows a ongoing dispute between the sector and the British authorities over drug pricing and regulatory access.
The disagreement were exacerbated by claims that US customers were paying several times more for the equivalent treatments than people in the UK and Europe.
Recently, several major pharmaceutical investments in the UK have been halted or cancelled, while substantial investments have been pledged toward projects in the United States.
One official publicly accepted that the NHS must spend more on drugs, noting that its expenditure on drugs had shrunk as a proportion of its overall budget over the past decade.
