The United Kingdom and the United States have secured a significant bilateral deal that will guarantee zero duties on British drug products going into the US market.
Agreement Details of the Accord
Under the terms of the agreement, the UK has agreed to increase funding on pharmaceuticals through the public health system. This pledge ensures that duties on these vital products will stay at zero for a period of the next three years.
This development is in response to earlier statements to hike import taxes on branded pharmaceutical imports, with figures discussed as high as 100%.
"This agreement between the United Kingdom reinforces the worldwide climate for new treatments and introduces much-needed fairness to American-British drug exports," a statement noted.
Commercial Importance
Drugs constitute one of the Britain's largest exports to the US, which is clearly the largest market for leading British pharmaceutical firms.
Export figures indicate that in the year leading up to September, the UK sold drugs totaling over eleven billion pounds to the US. This amount represented nearly one-fifth of British export trade in that span.
"This agreement protects employment, increases investment and facilitates the UK to become a global hub for biotech and pharma," a government official remarked.
Key NHS Changes
The pact entails several key pledges from the United Kingdom:
- Revised Affordability Limit: The UK will raise the price threshold at which it considers new treatments to be too expensive by 25%.
- Boosted Medicine Funding: There is a goal to double overall health service expenditure on drugs from 0.3% of Gross Domestic Product to 0.6 percent over the following ten-year period.
- Payback Limit: The percentage drug companies must return to the NHS to stay within budget will be limited at 15%. Previously, refunds topped 20%.
Recent Tensions
The deal follows a protracted row between the drug companies and the UK government over spending levels and regulatory access.
The disagreement were exacerbated by assertions that US patients were charged several times more for the same drugs than people in the UK and Europe.
In recent months, several large drug company projects in the UK have been paused or cancelled, while substantial expansions have been announced toward American operations.
The Science Minister stated that the NHS needed to increase expenditure on medicines, noting that its spending on drugs had declined as a share of its resources over the last ten years.
