The United Kingdom and the United States have finalized a major bilateral deal that will ensure zero duties on UK medicine shipments entering the US market.
Key Provisions of the Deal
As part of the deal, the UK has agreed to raise spending on medicines through the public health system. This pledge secures that import taxes on these crucial exports will stay at zero for a period of 36 months.
This deal follows previous statements to significantly raise import taxes on branded drug products, with figures mentioned reaching one hundred percent.
"This agreement between the Britain reinforces the worldwide climate for new treatments and establishes much-needed fairness to American-British pharmaceutical trade," a statement said.
Commercial Importance
Medicines are one of the the United Kingdom's largest exports to the US, which is by far the biggest destination for large companies like GSK and AstraZeneca.
Export figures reveal that in the year prior to the third quarter, the UK exported medicines totaling £11.1bn to the US. This value represented 17.4% of British export trade in that span.
"This deal safeguards work, stimulates investment and paves the way for the UK to become a worldwide center for biotech and pharma," a minister remarked.
Key UK Commitments
The pact includes several key changes from the British government:
- Revised Affordability Limit: The UK will increase the affordability limit at which it considers new medicines to be prohibitively costly by twenty-five percent.
- Boosted Medicine Funding: There is a aim to double total public funding on medicines from 0.3% of the national economy to 0.6% over the next decade.
- Rebate Cap: The amount manufacturers must pay back to the NHS to stay within budget will be restricted at 15%. Last year, refunds topped 20%.
Broader Context
This agreement follows a long-running dispute between the sector and the British authorities over medicine costs and regulatory access.
These tensions were intensified by claims that US consumers were charged a premium for the equivalent treatments than patients in the Britain and the EU.
Recently, several major manufacturing plans in the UK have been halted or abandoned, while major funding commitments have been announced toward projects in the United States.
The Science Minister stated that the NHS needed to invest a greater share on medicines, noting that its spending on drugs had decreased as a percentage of its overall budget over the previous ten-year period.
