The UK and US have concluded a major trade agreement that will maintain no duties on British drug shipments being sold in the American market.
Agreement Details of the Accord
Under the terms of the agreement, the UK has committed to increase funding on pharmaceuticals through the National Health Service (NHS). This commitment secures that import taxes on these key products will remain at zero for a timeframe of three years.
This deal comes after earlier statements to significantly raise import taxes on patented pharmaceutical imports, with figures discussed as high as double the cost.
"This agreement with the UK bolsters the worldwide climate for new treatments and introduces much-needed fairness to American-British medicine commerce," a statement said.
Commercial Importance
Medicines represent one of the Britain's largest export categories to the United States, which is easily the primary market for leading British pharmaceutical firms.
Export figures show that in the one-year period to the end of last September, the UK exported pharmaceutical products valued at £11.1bn to the US. This value accounted for a significant portion of all goods exports in that period.
"This deal safeguards employment, boosts investment and sets the stage for the UK to establish itself as a global hub for medical research," the Business and Trade Secretary remarked.
Detailed UK Commitments
The agreement includes several specific commitments from the UK:
- Price Threshold Increase: The UK will increase the price threshold at which it deems new medicines to be too expensive by 25%.
- Boosted Medicine Funding: There is a goal to increase overall NHS spending on medicines from 0.3% of Gross Domestic Product to 0.6 percent over the following ten-year period.
- Refund Ceiling: The percentage manufacturers must refund to the NHS to control costs will be restricted at fifteen percent. In the past, refunds were more than twenty percent.
Broader Context
The deal takes place against a long-running dispute between the drug companies and the UK government over spending levels and regulatory access.
The disagreement were exacerbated by claims that American patients were charged several times more for the same drugs than people in the UK and Europe.
Over the last 18 months, several significant manufacturing plans in the UK have been paused or abandoned, while major expansions have been directed toward US facilities.
The Science Minister acknowledged that the NHS needed to invest a greater share on medicines, noting that its expenditure on drugs had shrunk as a percentage of its total funding over the previous ten-year period.
