The United Kingdom and the United States have agreed to a key bilateral deal that will maintain no duties on British pharmaceutical shipments being sold in the US market.
The Terms of the Accord
Under the terms of the agreement, the UK has committed to raise funding on pharmaceuticals through the National Health Service (NHS). This move ensures that import taxes on these crucial products will stay at nothing for a duration of the next three years.
This development is in response to previous warnings to significantly raise import taxes on patented pharmaceutical imports, with potential rates mentioned reaching 100%.
"This deal between the United Kingdom strengthens the worldwide climate for new treatments and brings much-needed balance to U.S.–U.K. drug exports," a statement noted.
Trade Importance
Drugs represent one of the the United Kingdom's most significant goods shipped to the United States, which is clearly the largest destination for large companies like GSK and AstraZeneca.
Export figures reveal that in the 12 months to the end of the third quarter, the UK shipped medicines valued at over eleven billion pounds to the US. This figure accounted for nearly one-fifth of total UK exports in that period.
"This agreement secures employment, stimulates funding and sets the stage for the UK to become a worldwide center for medical research," a minister commented.
Specific British Pledges
The pact involves several notable changes from the British government:
- Revised Affordability Limit: The UK will lift the price threshold at which it considers new treatments to be too expensive by 25%.
- Increased NHS Spending: There is a target to raise total public funding on medicines from 0.3% of GDP to 0.6 percent over the coming ten years.
- Payback Limit: The amount pharmaceutical firms must refund to the NHS to stay within budget will be capped at fifteen percent. Previously, refunds topped twenty percent.
Recent Tensions
This agreement follows a long-running row between the sector and the UK government over spending levels and approval rates.
This friction were exacerbated by assertions that US customers were charged several times more for the same drugs than consumers in the UK and Europe.
Recently, several significant manufacturing plans in the UK have been halted or scrapped, while major investments have been announced toward projects in the United States.
The Science Minister publicly accepted that the NHS had to spend more on treatments, noting that its budget allocation on drugs had shrunk as a percentage of its total funding over the last ten years.
