The UK and US have hammered out a significant bilateral deal that will maintain zero levies on British drug exports entering the US market.
The Terms of the Accord
As part of the deal, the UK has committed to increase spending on medicines through the NHS. This pledge ensures that duties on these key products will be held at zero for a timeframe of 36 months.
This deal follows earlier statements to significantly raise import taxes on patented drug imports, with figures mentioned reaching double the cost.
"This arrangement with the Britain bolsters the international landscape for cutting-edge drugs and establishes long-overdue equity to transatlantic drug exports," a statement declared.
Trade Impact
Medicines represent one of the UK's largest exports to the America, which is easily the biggest market for large British pharmaceutical firms.
Trade data reveal that in the one-year period to the end of September, the UK sold pharmaceutical products worth over eleven billion pounds to the US. This value made up nearly one-fifth of total UK exports in that period.
"This guarantee safeguards work, increases investment and facilitates the UK to establish itself as a international leader for medical research," the Business and Trade Secretary commented.
Specific UK Commitments
The agreement involves several key pledges from the British government:
- Revised Affordability Limit: The UK will increase the cost ceiling at which it considers new medicines to be unaffordable by 25%.
- Higher Drug Budget: There is a target to double total public funding on treatments from 0.3% of Gross Domestic Product to 0.6% over the coming ten years.
- Refund Ceiling: The sum manufacturers must return to the NHS to control costs will be capped at 15%. Previously, refunds exceeded 20%.
Industry Background
The pact comes amid a ongoing dispute between the sector and the British authorities over drug pricing and NHS adoption.
This friction were heightened by arguments that US consumers were charged significantly more for the same drugs than people in the other developed nations.
Recently, several significant manufacturing plans in the UK have been delayed or cancelled, while multi-billion-dollar investments have been announced toward US facilities.
One official acknowledged that the NHS needed to spend more on drugs, noting that its expenditure on drugs had decreased as a proportion of its total funding over the past decade.
