The UK and US have agreed to a key bilateral deal that will preserve zero levies on British pharmaceutical shipments entering the American market.
The Terms of the Deal
Under the terms of the agreement, the UK has committed to raise expenditure on drugs through the National Health Service (NHS). This commitment guarantees that import taxes on these vital products will stay at zero for a period of three years.
This deal follows earlier statements to hike tariffs on branded drug products, with figures discussed as high as double the cost.
"This deal between the Britain strengthens the global environment for cutting-edge drugs and brings long-overdue equity to U.S.–U.K. pharmaceutical trade," a statement noted.
Commercial Importance
Drugs represent one of the UK's most significant export categories to the America, which is by far the biggest market for leading companies like GSK and AstraZeneca.
Export figures show that in the one-year period leading up to the third quarter, the UK shipped pharmaceutical products worth over eleven billion pounds to the US. This figure accounted for a significant portion of all goods exports in that period.
"This guarantee protects employment, stimulates investment and sets the stage for the UK to establish itself as a international leader for medical research," the Business and Trade Secretary stated.
Specific British Pledges
The pact involves several key changes from the British government:
- Price Threshold Increase: The UK will increase the cost ceiling at which it deems new treatments to be prohibitively costly by a quarter.
- Higher Drug Budget: There is a aim to raise overall NHS spending on treatments from 0.3 percent of Gross Domestic Product to 0.6 percent over the following ten-year period.
- Refund Ceiling: The sum manufacturers must pay back to the NHS to stay within budget will be capped at 15%. Previously, repayments were more than twenty percent.
Recent Tensions
This agreement comes amid a long-running dispute between the pharmaceutical industry and the British authorities over spending levels and NHS adoption.
The disagreement were intensified by claims that American patients were charged a premium for the same drugs than people in the UK and Europe.
Recently, several large manufacturing plans in the UK have been delayed or abandoned, while multi-billion-dollar investments have been pledged toward projects in the United States.
The Science Minister acknowledged that the NHS must spend more on medicines, noting that its expenditure on drugs had shrunk as a proportion of its resources over the last ten years.
