The United Kingdom and the United States have concluded a major commercial pact that will keep no duties on British medicine shipments going into the US market.
Agreement Details of the Deal
Under the terms of the agreement, the UK has committed to boost spending on medicines through the public health system. This move secures that tariffs on these crucial products will be held at zero for a period of the next three years.
This agreement follows recent statements to hike duties on patented pharmaceutical products, with figures floated up to one hundred percent.
"This agreement with the UK bolsters the international landscape for cutting-edge drugs and establishes long-overdue equity to American-British pharmaceutical trade," an announcement said.
Trade Importance
Medicines represent one of the UK's largest export categories to the US, which is easily the primary market for large companies like GSK and AstraZeneca.
Statistics show that in the 12 months leading up to the third quarter, the UK exported medicines worth billions to the US. This value made up nearly one-fifth of all goods exports in that period.
"This guarantee safeguards work, stimulates capital expenditure and sets the stage for the UK to establish itself as a worldwide center for life sciences," the Business and Trade Secretary commented.
Key UK Commitments
The pact involves several specific pledges from the British government:
- Price Threshold Increase: The UK will increase the cost ceiling at which it considers new medicines to be unaffordable by twenty-five percent.
- Increased NHS Spending: There is a target to increase overall health service expenditure on drugs from 0.3% of the national economy to 0.6% over the following ten-year period.
- Payback Limit: The amount pharmaceutical firms must refund to the NHS to stay within budget will be restricted at 15%. Previously, refunds were more than 20%.
Recent Tensions
This agreement follows a protracted row between the drug companies and the UK government over drug pricing and NHS adoption.
This friction were exacerbated by claims that US customers were paying a premium for the same drugs than people in the UK and Europe.
Recently, several major drug company projects in the UK have been halted or abandoned, while multi-billion-dollar funding commitments have been pledged toward American operations.
One official publicly accepted that the NHS had to invest a greater share on drugs, noting that its spending on drugs had decreased as a share of its overall budget over the past decade.
