The United Kingdom and the United States have forged a significant commercial pact that will preserve no import taxes on British medicine exports going into the US market.
The Terms of the Deal
Under the terms of the agreement, the UK has agreed to raise funding on medicines through the public health system. This commitment secures that duties on these crucial products will be held at zero for a period of the next three years.
This agreement follows earlier statements to dramatically increase duties on patented drug imports, with potential rates floated reaching 100%.
"This arrangement between the UK strengthens the international landscape for new treatments and establishes much-needed balance to transatlantic drug exports," a release noted.
Trade Impact
Medicines represent one of the Britain's most significant goods shipped to the US, which is easily the primary buyer for major UK drugmakers.
Export figures show that in the year leading up to the third quarter, the UK exported drugs worth £11.1bn to the US. This figure accounted for 17.4% of British export trade in that span.
"This agreement safeguards employment, increases capital expenditure and sets the stage for the UK to emerge as a worldwide center for life sciences," the Business and Trade Secretary commented.
Specific British Pledges
The deal includes several specific commitments from the UK:
- Higher Cost Ceiling: The UK will lift the cost ceiling at which it deems new medicines to be too expensive by 25%.
- Higher Drug Budget: There is a goal to increase total NHS spending on drugs from 0.3 percent of GDP to 0.6% over the following ten-year period.
- Refund Ceiling: The percentage pharmaceutical firms must refund to the NHS to stay within budget will be limited at fifteen percent. Previously, refunds exceeded twenty percent.
Industry Background
The pact comes amid a protracted tension between the pharmaceutical industry and the ministers over spending levels and approval rates.
The disagreement were heightened by assertions that American customers were charged a premium for the identical medicines than consumers in the UK and Europe.
Recently, several significant drug company projects in the UK have been halted or scrapped, while multi-billion-dollar investments have been pledged toward projects in the United States.
A senior figure acknowledged that the NHS had to spend more on treatments, noting that its spending on drugs had shrunk as a percentage of its total funding over the last ten years.
