The United Kingdom and the United States have announced a major bilateral deal that will ensure no duties on British drug products entering the American market.
Agreement Details of the Deal
As part of the deal, the UK has pledged to boost funding on medicines through the National Health Service (NHS). This move secures that tariffs on these vital exports will stay at zero for a timeframe of the next three years.
This agreement follows recent threats to dramatically increase duties on branded drug imports, with increases floated as high as 100%.
"This deal between the Britain reinforces the international landscape for new treatments and brings long-overdue equity to American-British medicine commerce," an announcement said.
Trade Impact
Drugs represent one of the UK's largest exports to the US, which is by far the biggest destination for leading UK drugmakers.
Export figures show that in the year leading up to last September, the UK exported medicines valued at billions to the US. This value represented 17.4% of all goods exports in that timeframe.
"This agreement protects employment, stimulates investment and sets the stage for the UK to establish itself as a worldwide center for life sciences," a minister stated.
Detailed British Pledges
The agreement involves several specific commitments from the UK:
- Higher Cost Ceiling: The UK will raise the price threshold at which it judges new therapies to be too expensive by a quarter.
- Increased NHS Spending: There is a aim to increase total health service expenditure on medicines from 0.3% of GDP to 0.6 percent over the coming ten years.
- Refund Ceiling: The sum drug companies must return to the NHS to stay within budget will be restricted at 15%. Last year, rebates exceeded 20%.
Industry Background
The deal comes amid a ongoing dispute between the sector and the British authorities over medicine costs and regulatory access.
The disagreement were intensified by claims that US patients were paying several times more for the equivalent treatments than consumers in the UK and Europe.
Recently, several large drug company projects in the UK have been delayed or scrapped, while substantial expansions have been pledged toward US facilities.
A senior figure acknowledged that the NHS needed to increase expenditure on drugs, noting that its expenditure on drugs had decreased as a proportion of its total funding over the last ten years.
