Britain and America have secured a key trade agreement that will ensure zero tariffs on UK drug shipments going into the US market.
Agreement Details of the Accord
In exchange for the tariff guarantee, the UK has pledged to increase spending on pharmaceuticals through the NHS. This pledge secures that tariffs on these key goods will remain at nothing for a duration of three years.
This deal follows previous warnings to hike duties on patented pharmaceutical products, with increases discussed up to double the cost.
"This agreement between the Britain reinforces the worldwide climate for innovative medicines and brings much-needed equity to American-British pharmaceutical trade," a release noted.
Economic Importance
Pharmaceuticals constitute one of the UK's biggest export categories to the America, which is by far the biggest buyer for major UK drugmakers.
Export figures reveal that in the one-year period to the end of September, the UK sold drugs worth £11.1bn to the US. This figure represented 17.4% of British export trade in that period.
"This deal safeguards jobs, stimulates investment and sets the stage for the UK to establish itself as a international leader for life sciences," a minister commented.
Detailed British Pledges
The pact includes several specific pledges from the British government:
- Price Threshold Increase: The UK will raise the price threshold at which it deems new treatments to be prohibitively costly by a quarter.
- Boosted Medicine Funding: There is a aim to increase total public funding on medicines from 0.3 percent of the national economy to 0.6% over the next decade.
- Refund Ceiling: The percentage drug companies must pay back to the NHS to stay within budget will be limited at 15%. Last year, repayments exceeded 20%.
Recent Tensions
The pact comes amid a protracted tension between the sector and the ministers over medicine costs and regulatory access.
These tensions were exacerbated by claims that American consumers were charged a premium for the equivalent treatments than patients in the UK and Europe.
Recently, several large pharmaceutical investments in the UK have been halted or cancelled, while major expansions have been directed toward American operations.
The Science Minister acknowledged that the NHS had to invest a greater share on drugs, noting that its expenditure on drugs had decreased as a percentage of its overall budget over the last ten years.
