The UK and US have announced a key trade agreement that will keep no duties on British medicine shipments being sold in the American market.
The Terms of the Deal
As part of the deal, the UK has pledged to raise funding on drugs through the public health system. This move ensures that tariffs on these key products will remain at zero for a duration of three years.
This agreement comes after recent threats to significantly raise duties on patented drug imports, with increases floated as high as 100%.
"This deal with the United Kingdom strengthens the worldwide climate for cutting-edge drugs and brings long-overdue fairness to transatlantic drug exports," an announcement declared.
Trade Significance
Drugs are one of the Britain's biggest goods shipped to the US, which is clearly the biggest destination for large companies like GSK and AstraZeneca.
Statistics indicate that in the one-year period prior to last September, the UK exported pharmaceutical products valued at over eleven billion pounds to the US. This figure made up a significant portion of British export trade in that period.
"This agreement protects work, boosts funding and facilitates the UK to become a worldwide center for medical research," a government official commented.
Detailed UK Commitments
The pact involves several specific pledges from the UK:
- Revised Affordability Limit: The UK will raise the affordability limit at which it considers new treatments to be prohibitively costly by 25%.
- Boosted Medicine Funding: There is a target to increase total NHS spending on drugs from 0.3% of GDP to 0.6% over the coming ten years.
- Rebate Cap: The percentage pharmaceutical firms must return to the NHS to stay within budget will be capped at 15%. Previously, repayments topped 20%.
Recent Tensions
This agreement takes place against a long-running row between the sector and the UK government over spending levels and regulatory access.
This friction were exacerbated by arguments that American patients were paying 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 delayed or cancelled, while major funding commitments have been directed toward projects in the United States.
One official stated that the NHS must invest a greater share on treatments, noting that its budget allocation on drugs had decreased as a share of its overall budget over the past decade.
