The United Kingdom and the United States have secured a key bilateral deal that will ensure no import taxes on UK drug products entering the American market.
The Terms of the Pact
As part of the deal, the UK has pledged to boost spending on medicines through the public health system. This move secures that duties on these crucial goods will be held at zero for a timeframe of the next three years.
This deal follows recent threats to significantly raise import taxes on branded drug imports, with potential rates discussed reaching 100%.
"This deal between the United Kingdom bolsters the international landscape for new treatments and establishes much-needed balance to American-British drug exports," a statement noted.
Trade Impact
Drugs constitute one of the Britain's most significant export categories to the US, which is easily the biggest market for major companies like GSK and AstraZeneca.
Export figures indicate that in the 12 months to the end of the third quarter, the UK sold drugs totaling billions to the US. This value represented nearly one-fifth of all goods exports in that period.
"This deal safeguards employment, stimulates investment and paves the way for the UK to emerge as a global hub for medical research," a minister remarked.
Specific UK Commitments
The pact involves several notable commitments from the United Kingdom:
- Revised Affordability Limit: The UK will raise the price threshold at which it judges new therapies to be too expensive by 25%.
- Higher Drug Budget: There is a target to double overall health service expenditure on drugs from 0.3 percent of Gross Domestic Product to 0.6 percent over the next decade.
- Payback Limit: The amount manufacturers must refund to the NHS to prevent overspending will be capped at fifteen percent. Last year, refunds were more than 20%.
Broader Context
This agreement comes amid a long-running row between the sector and the ministers over medicine costs and approval rates.
This friction were exacerbated by claims that US customers were paying several times more for the equivalent treatments than people in the UK and Europe.
Recently, several significant manufacturing plans in the UK have been halted or scrapped, while major funding commitments have been pledged toward projects in the United States.
The Science Minister stated that the NHS needed to increase expenditure on treatments, noting that its spending on drugs had declined as a proportion of its resources over the last ten years.
