The UK and US have established a major trade agreement that will preserve no duties on UK pharmaceutical exports being sold in the US market.
The Terms of the Accord
As part of the deal, the UK has committed to boost spending on pharmaceuticals through the National Health Service (NHS). This commitment guarantees that import taxes on these vital exports will be held at zero for a timeframe of three years.
This development follows earlier statements to significantly raise import taxes on branded pharmaceutical products, with increases discussed up to one hundred percent.
"This deal between the United Kingdom bolsters the global environment for innovative medicines and introduces much-needed equity to American-British pharmaceutical trade," a statement noted.
Trade Significance
Drugs are one of the the United Kingdom's largest goods shipped to the US, which is easily the biggest buyer for leading UK drugmakers.
Statistics indicate that in the 12 months to the end of September, the UK exported drugs totaling over eleven billion pounds to the US. This amount represented nearly one-fifth of all goods exports in that timeframe.
"This deal safeguards jobs, stimulates investment and paves the way for the UK to become a international leader for biotech and pharma," the Business and Trade Secretary stated.
Detailed British Pledges
The agreement involves several specific pledges from the United Kingdom:
- Higher Cost Ceiling: The UK will increase the affordability limit at which it considers new therapies to be prohibitively costly by a quarter.
- Boosted Medicine Funding: There is a aim to increase overall public funding on drugs from 0.3 percent of GDP to 0.6 percent over the coming ten years.
- Refund Ceiling: The amount pharmaceutical firms must return to the NHS to stay within budget will be limited at 15%. Last year, rebates were more than 20%.
Industry Background
The deal comes amid a protracted row between the drug companies and the British authorities over drug pricing and NHS adoption.
This friction were intensified by claims that US consumers were paying significantly more for the equivalent treatments than patients in the UK and Europe.
In recent months, several major drug company projects in the UK have been halted or cancelled, while major expansions have been pledged toward American operations.
A senior figure stated that the NHS had to increase expenditure on drugs, noting that its expenditure on drugs had decreased as a share of its resources over the last ten years.
