The UK and US have hammered out a important bilateral deal that will maintain no import taxes on British pharmaceutical shipments being sold in the US market.
Key Provisions of the Accord
As part of the deal, the UK has committed to increase expenditure on medicines through the NHS. This commitment guarantees that tariffs on these vital exports will be held at zero for a period of the next three years.
This deal follows recent warnings to hike import taxes on patented pharmaceutical imports, with figures floated up to 100%.
"This arrangement with the UK strengthens the international landscape for new treatments and establishes much-needed fairness to American-British medicine commerce," a release declared.
Trade Importance
Medicines constitute one of the the United Kingdom's most significant export categories to the United States, which is by far the biggest market for large companies like GSK and AstraZeneca.
Statistics show that in the year prior to September, the UK sold drugs worth £11.1bn to the US. This amount represented 17.4% of total UK exports in that period.
"This guarantee secures work, stimulates investment and paves the way for the UK to become a international leader for medical research," the Business and Trade Secretary remarked.
Specific UK Commitments
The agreement involves several key pledges from the British government:
- Price Threshold Increase: The UK will lift the price threshold at which it considers new therapies to be unaffordable by twenty-five percent.
- Boosted Medicine Funding: There is a goal to double total health service expenditure on medicines from 0.3% of the national economy to 0.6% over the next decade.
- Rebate Cap: The amount pharmaceutical firms must pay back to the NHS to stay within budget will be limited at fifteen percent. In the past, repayments exceeded twenty percent.
Recent Tensions
The pact takes place against a long-running tension between the sector and the UK government over spending levels and approval rates.
The disagreement were exacerbated by claims that American customers were paying significantly more for the same drugs than patients in the other developed nations.
Over the last 18 months, several major drug company projects in the UK have been delayed or cancelled, while substantial expansions have been directed toward American operations.
The Science Minister acknowledged that the NHS had to spend more on medicines, noting that its spending on drugs had declined as a percentage of its total funding over the previous ten-year period.
