The UK and US have established a landmark trade agreement that will guarantee zero import taxes on British medicine exports going into the American market.
Key Provisions of the Pact
In exchange for the tariff guarantee, the UK has agreed to raise funding on medicines through the NHS. This move secures that import taxes on these vital products will remain at nothing for a period of 36 months.
This deal follows recent statements to hike duties on patented drug imports, with figures discussed reaching 100%.
"This agreement between the United Kingdom reinforces the worldwide climate for innovative medicines and introduces long-overdue equity to American-British drug exports," an announcement noted.
Trade Importance
Pharmaceuticals are one of the UK's largest exports to the America, which is by far the largest market for major companies like GSK and AstraZeneca.
Trade data indicate that in the one-year period to the end of September, the UK sold medicines valued at billions to the US. This figure accounted for a significant portion of all goods exports in that timeframe.
"This agreement secures employment, boosts investment and facilitates the UK to establish itself as a international leader for medical research," the Business and Trade Secretary stated.
Specific UK Commitments
The pact includes several specific changes from the UK:
- Revised Affordability Limit: The UK will increase the price threshold at which it judges new treatments to be unaffordable by 25%.
- Higher Drug Budget: There is a target to raise total public funding on treatments from 0.3 percent of Gross Domestic Product to 0.6% over the coming ten years.
- Rebate Cap: The percentage manufacturers must refund to the NHS to control costs will be limited at fifteen percent. In the past, refunds exceeded 20%.
Recent Tensions
The pact follows a long-running row between the sector and the UK government over medicine costs and regulatory access.
The disagreement were intensified by claims that US consumers were charged significantly more for the same drugs than patients in the other developed nations.
Recently, several significant manufacturing plans in the UK have been delayed or scrapped, while substantial expansions have been pledged toward projects in the United States.
The Science Minister publicly accepted that the NHS must spend more on drugs, noting that its budget allocation on drugs had shrunk as a share of its total funding over the previous ten-year period.
