Britain and America have hammered out a significant bilateral deal that will preserve zero duties on UK drug shipments going into the US market.
Key Provisions of the Accord
As part of the deal, the UK has agreed to boost spending on medicines through the NHS. This commitment secures that duties on these key goods will stay at nothing for a period of three years.
This deal comes after recent threats to dramatically increase tariffs on branded drug imports, with potential rates discussed reaching 100%.
"This deal between the United Kingdom reinforces the global environment for new treatments and brings long-overdue equity to U.S.–U.K. drug exports," an announcement declared.
Trade Importance
Pharmaceuticals are one of the the United Kingdom's largest export categories to the United States, which is by far the largest buyer for major companies like GSK and AstraZeneca.
Export figures reveal that in the year to the end of last September, the UK sold drugs worth over eleven billion pounds to the US. This figure made up nearly one-fifth of British export trade in that timeframe.
"This deal secures jobs, stimulates capital expenditure and paves the way for the UK to emerge as a worldwide center for medical research," the Business and Trade Secretary stated.
Key NHS Changes
The agreement includes several notable pledges from the British government:
- Revised Affordability Limit: The UK will increase the price threshold at which it judges new treatments to be unaffordable by a quarter.
- Increased NHS Spending: There is a aim to double total NHS spending on treatments from 0.3% of the national economy to 0.6% over the next decade.
- Rebate Cap: The percentage pharmaceutical firms must refund to the NHS to control costs will be restricted at 15%. Last year, refunds were more than 20%.
Industry Background
This agreement follows a protracted row between the sector and the UK government over spending levels and NHS adoption.
This friction were heightened by assertions that US patients were charged several times more for the identical medicines than people in the other developed nations.
Over the last 18 months, several major drug company projects in the UK have been halted or scrapped, while major expansions have been announced toward American operations.
A senior figure publicly accepted that the NHS needed to invest a greater share on medicines, noting that its expenditure on drugs had declined as a percentage of its total funding over the previous ten-year period.
