The UK and US have secured a key trade agreement that will keep no tariffs on British drug exports going into the American market.
The Terms of the Deal
Under the terms of the agreement, the UK has committed to increase funding on pharmaceuticals through the public health system. This move ensures that import taxes on these key goods will be held at nothing for a period of the next three years.
This development is in response to recent statements to significantly raise import taxes on branded drug imports, with figures floated up to one hundred percent.
"This agreement with the UK reinforces the worldwide climate for new treatments and brings long-overdue balance to transatlantic medicine commerce," an announcement said.
Economic Impact
Medicines constitute one of the UK's biggest exports to the US, which is easily the biggest destination for leading companies like GSK and AstraZeneca.
Export figures indicate that in the year leading up to September, the UK exported medicines totaling billions to the US. This figure accounted for nearly one-fifth of British export trade in that period.
"This guarantee protects work, stimulates funding and paves the way for the UK to emerge as a international leader for biotech and pharma," the Business and Trade Secretary commented.
Specific British Pledges
The agreement involves several key commitments from the UK:
- Higher Cost Ceiling: The UK will raise the cost ceiling at which it judges new medicines to be prohibitively costly by twenty-five percent.
- Boosted Medicine Funding: There is a aim to increase total NHS spending on treatments from 0.3% of GDP to 0.6% over the next decade.
- Rebate Cap: The amount drug companies must return to the NHS to prevent overspending will be capped at 15%. In the past, rebates topped 20%.
Industry Background
The deal takes place against a protracted tension between the drug companies and the UK government over spending levels and NHS adoption.
The disagreement were heightened by assertions that American consumers were charged significantly more for the same drugs than consumers in the Britain and the EU.
Over the last 18 months, several major manufacturing plans in the UK have been delayed or scrapped, while major funding commitments have been directed toward US facilities.
A senior figure acknowledged that the NHS must increase expenditure on drugs, noting that its expenditure on drugs had decreased as a share of its resources over the previous ten-year period.
