The UK and US have reached a major bilateral deal that will keep zero levies on British drug shipments going into the US market.
Key Provisions of the Deal
In exchange for the tariff guarantee, the UK has committed to raise funding on medicines through the public health system. This move secures that tariffs on these key exports will be held at nothing for a duration of the next three years.
This development follows previous warnings to dramatically increase duties on patented drug imports, with figures mentioned up to double the cost.
"This agreement with the United Kingdom strengthens the international landscape for new treatments and establishes long-overdue fairness to transatlantic medicine commerce," a statement declared.
Economic Impact
Pharmaceuticals constitute one of the the United Kingdom's biggest goods shipped to the America, which is by far the biggest buyer for major UK drugmakers.
Export figures reveal that in the 12 months leading up to last September, the UK shipped medicines valued at £11.1bn to the US. This amount accounted for a significant portion of total UK exports in that timeframe.
"This guarantee secures work, increases investment and facilitates the UK to establish itself as a international leader for biotech and pharma," a minister commented.
Specific British Pledges
The agreement includes several notable changes from the UK:
- Revised Affordability Limit: The UK will raise the cost ceiling at which it judges new medicines to be prohibitively costly by a quarter.
- Boosted Medicine Funding: There is a goal to double total NHS spending on treatments from 0.3% of Gross Domestic Product to 0.6% over the following ten-year period.
- Refund Ceiling: The percentage drug companies must refund to the NHS to prevent overspending will be capped at fifteen percent. Previously, repayments topped twenty percent.
Broader Context
This agreement takes place against a long-running row between the sector and the ministers over drug pricing and approval rates.
The disagreement were heightened by arguments that US customers were paying several times more for the identical medicines than patients in the UK and Europe.
Recently, several major drug company projects in the UK have been halted or abandoned, while major investments have been pledged toward US facilities.
The Science Minister stated that the NHS needed to spend more on drugs, noting that its budget allocation on drugs had declined as a proportion of its resources over the last ten years.
