The UK and US have hammered out a important trade agreement that will ensure zero duties on British medicine shipments being sold in the US market.
Key Provisions of the Pact
As part of the deal, the UK has pledged to raise expenditure on drugs through the NHS. This pledge secures that import taxes on these vital goods will remain at zero for a duration of 36 months.
This development comes after recent threats to dramatically increase tariffs on patented drug imports, with figures floated reaching double the cost.
"This agreement between the UK bolsters the international landscape for new treatments and brings long-overdue equity to transatlantic drug exports," a statement said.
Economic Impact
Drugs constitute one of the UK's most significant exports to the US, which is by far the largest market for leading British pharmaceutical firms.
Statistics show that in the year to the end of September, the UK exported medicines totaling £11.1bn to the US. This value made up 17.4% of all goods exports in that timeframe.
"This guarantee secures jobs, stimulates capital expenditure and facilitates the UK to become a worldwide center for medical research," the Business and Trade Secretary stated.
Key UK Commitments
The agreement involves several key pledges from the United Kingdom:
- Revised Affordability Limit: The UK will increase the affordability limit at which it deems new treatments to be too expensive by a quarter.
- Boosted Medicine Funding: There is a target to double total NHS spending on medicines from 0.3 percent of GDP to 0.6 percent over the following ten-year period.
- Rebate Cap: The percentage drug companies must pay back to the NHS to stay within budget will be limited at 15%. Last year, rebates topped twenty percent.
Recent Tensions
The pact follows a long-running tension between the drug companies and the UK government over drug pricing and regulatory access.
The disagreement were exacerbated by claims that American customers were charged a premium for the same drugs than people in the UK and Europe.
Over the last 18 months, several significant drug company projects in the UK have been paused or abandoned, while substantial expansions have been directed toward American operations.
The Science Minister stated that the NHS needed to invest a greater share on drugs, noting that its spending on drugs had declined as a share of its overall budget over the previous ten-year period.
