The United Kingdom and the United States have hammered out a significant bilateral deal that will maintain no import taxes on UK medicine exports being sold in the American market.
The Terms of the Deal
Under the terms of the agreement, the UK has pledged to raise spending on drugs through the public health system. This move secures that tariffs on these vital goods will be held at nothing for a timeframe of the next three years.
This deal follows earlier statements to hike duties on patented pharmaceutical imports, with potential rates floated as high as one hundred percent.
"This agreement with the United Kingdom strengthens the international landscape for innovative medicines and establishes much-needed equity to transatlantic medicine commerce," a release declared.
Commercial Impact
Drugs represent one of the UK's biggest exports to the US, which is easily the largest buyer for leading British pharmaceutical firms.
Trade data reveal that in the year prior to last September, the UK sold pharmaceutical products valued at £11.1bn to the US. This amount represented a significant portion of total UK exports in that timeframe.
"This deal protects employment, increases funding and sets the stage for the UK to become a worldwide center for medical research," the Business and Trade Secretary remarked.
Detailed NHS Changes
The agreement involves several notable changes from the UK:
- Price Threshold Increase: The UK will increase the price threshold at which it judges new medicines to be too expensive by 25%.
- Increased NHS Spending: There is a target to raise total NHS spending on treatments from 0.3 percent of the national economy to 0.6 percent over the next decade.
- Refund Ceiling: The percentage manufacturers must refund to the NHS to stay within budget will be capped at 15%. In the past, rebates were more than twenty percent.
Recent Tensions
The deal follows a ongoing tension between the pharmaceutical industry and the British authorities over spending levels and approval rates.
The disagreement were exacerbated by assertions that US patients were charged a premium for the equivalent treatments than patients in the Britain and the EU.
In recent months, several large pharmaceutical investments in the UK have been halted or abandoned, while substantial expansions have been announced toward US facilities.
The Science Minister acknowledged that the NHS had to increase expenditure on medicines, noting that its budget allocation on drugs had declined as a percentage of its total funding over the past decade.
