The United Kingdom and the United States have signed a landmark bilateral deal that will guarantee no import taxes on British medicine exports being sold in the American market.
Agreement Details of the Deal
Under the terms of the agreement, the UK has agreed to raise spending on medicines through the NHS. This move secures that duties on these vital goods will remain at zero for a period of three years.
This development comes after earlier statements to significantly raise import taxes on branded drug products, with figures floated as high as one hundred percent.
"This deal with the United Kingdom reinforces the global environment for cutting-edge drugs and brings long-overdue equity to transatlantic pharmaceutical trade," a statement noted.
Trade Importance
Medicines are one of the Britain's largest export categories to the US, which is easily the primary market for leading British pharmaceutical firms.
Export figures show that in the year to the end of last September, the UK exported medicines worth £11.1bn to the US. This figure made up 17.4% of total UK exports in that period.
"This guarantee secures jobs, boosts investment and facilitates the UK to establish itself as a global hub for life sciences," a minister stated.
Specific British Pledges
The agreement involves several key changes from the United Kingdom:
- Revised Affordability Limit: The UK will increase the cost ceiling at which it deems new therapies to be unaffordable by twenty-five percent.
- Higher Drug Budget: There is a goal to increase total public funding on drugs from 0.3% of the national economy to 0.6 percent over the coming ten years.
- Refund Ceiling: The percentage drug companies must pay back to the NHS to stay within budget will be capped at fifteen percent. In the past, repayments exceeded twenty percent.
Industry Background
The deal follows a long-running row between the drug companies and the ministers over medicine costs and approval rates.
The disagreement were intensified by assertions that American customers were paying significantly more for the same drugs than people in the UK and Europe.
In recent months, several significant drug company projects in the UK have been halted or cancelled, while major funding commitments have been pledged toward projects in the United States.
A senior figure acknowledged that the NHS had to increase expenditure on medicines, noting that its budget allocation on drugs had decreased as a percentage of its resources over the past decade.
