The United Kingdom and the United States have announced a major trade agreement that will maintain zero import taxes on UK drug shipments being sold in the US market.
Agreement Details of the Deal
As part of the deal, the UK has committed to raise funding on drugs through the public health system. This move secures that duties on these key goods will stay at nothing for a duration of the next three years.
This deal comes after recent warnings to significantly raise tariffs on patented drug products, with increases discussed reaching double the cost.
"This deal with the Britain bolsters the global environment for innovative medicines and brings long-overdue balance to U.S.–U.K. medicine commerce," a release noted.
Trade Impact
Drugs constitute one of the UK's biggest goods shipped to the US, which is easily the primary buyer for large companies like GSK and AstraZeneca.
Statistics reveal that in the one-year period to the end of last September, the UK sold drugs valued at £11.1bn to the US. This figure represented nearly one-fifth of all goods exports in that period.
"This guarantee safeguards work, boosts capital expenditure and paves the way for the UK to emerge as a worldwide center for life sciences," a minister commented.
Key British Pledges
The agreement entails several key pledges from the British government:
- Revised Affordability Limit: The UK will lift the price threshold at which it deems new therapies to be prohibitively costly by twenty-five percent.
- Increased NHS Spending: There is a aim to increase overall public funding on medicines from 0.3 percent of the national economy to 0.6 percent over the next decade.
- Rebate Cap: The amount pharmaceutical firms must pay back to the NHS to control costs will be limited at 15%. Last year, repayments were more than 20%.
Industry Background
The pact follows a ongoing tension between the pharmaceutical industry and the ministers over spending levels and NHS adoption.
The disagreement were exacerbated by assertions that American patients were paying significantly more for the equivalent treatments than people in the Britain and the EU.
Recently, several large drug company projects in the UK have been halted or scrapped, while substantial investments have been pledged toward projects in the United States.
The Science Minister publicly accepted that the NHS had to increase expenditure on medicines, noting that its spending on drugs had decreased as a proportion of its total funding over the past decade.
