The UK and US have announced a key bilateral deal that will guarantee zero duties on UK medicine exports going into the US market.
Agreement Details of the Accord
Under the terms of the agreement, the UK has pledged to increase expenditure on pharmaceuticals through the National Health Service (NHS). This move ensures that tariffs on these key exports will be held at zero for a period of three years.
This deal comes after recent threats to hike tariffs on branded drug imports, with figures floated up to one hundred percent.
"This agreement with the Britain bolsters the worldwide climate for cutting-edge drugs and introduces much-needed balance to transatlantic pharmaceutical trade," an announcement declared.
Commercial Importance
Medicines are one of the UK's biggest goods shipped to the US, which is by far the largest market for major UK drugmakers.
Export figures show that in the year leading up to last September, the UK shipped drugs totaling billions to the US. This figure made up a significant portion of British export trade in that span.
"This agreement protects jobs, increases investment and paves the way for the UK to establish itself as a worldwide center for medical research," the Business and Trade Secretary commented.
Specific British Pledges
The agreement includes several specific pledges from the UK:
- Revised Affordability Limit: The UK will lift the cost ceiling at which it judges new therapies to be unaffordable by 25%.
- Boosted Medicine Funding: There is a aim to double total NHS spending on medicines from 0.3 percent of GDP to 0.6 percent over the coming ten years.
- Rebate Cap: The amount drug companies must refund to the NHS to prevent overspending will be limited at fifteen percent. In the past, refunds topped twenty percent.
Industry Background
The pact follows a long-running row between the sector and the ministers over drug pricing and NHS adoption.
The disagreement were exacerbated by arguments that US patients were charged several times more for the equivalent treatments than people in the other developed nations.
In recent months, several large pharmaceutical investments in the UK have been halted or scrapped, while major funding commitments have been directed toward projects in the United States.
The Science Minister stated that the NHS needed to increase expenditure on drugs, noting that its budget allocation on drugs had declined as a share of its total funding over the previous ten-year period.
