The UK and US have hammered out a landmark trade agreement that will keep zero duties on British medicine products being sold in the US market.
The Terms of the Accord
Under the terms of the agreement, the UK has agreed to raise spending on pharmaceuticals through the NHS. This move guarantees that import taxes on these vital goods will be held at zero for a duration of the next three years.
This agreement is in response to previous threats to hike tariffs on patented pharmaceutical imports, with figures floated reaching double the cost.
"This agreement between the Britain strengthens the international landscape for cutting-edge drugs and introduces long-overdue balance to transatlantic drug exports," a statement said.
Economic Importance
Medicines are one of the UK's biggest goods shipped to the US, which is clearly the primary market for large British pharmaceutical firms.
Statistics show that in the one-year period prior to September, the UK sold drugs worth over eleven billion pounds to the US. This value accounted for 17.4% of all goods exports in that span.
"This deal secures jobs, increases capital expenditure and facilitates the UK to establish itself as a global hub for medical research," a government official remarked.
Detailed British Pledges
The agreement includes several specific pledges from the United Kingdom:
- Higher Cost Ceiling: The UK will raise the affordability limit at which it considers new treatments to be unaffordable by 25%.
- Boosted Medicine Funding: There is a aim to raise total health service expenditure on treatments from 0.3 percent of GDP to 0.6% over the next decade.
- Refund Ceiling: The percentage manufacturers must pay back to the NHS to control costs will be restricted at 15%. Previously, repayments exceeded 20%.
Industry Background
The pact comes amid a long-running dispute between the drug companies and the ministers over drug pricing and approval rates.
The disagreement were heightened by arguments that US patients were paying a premium for the identical medicines than patients in the Britain and the EU.
In recent months, several large drug company projects in the UK have been delayed or abandoned, while multi-billion-dollar expansions have been announced toward US facilities.
One official stated that the NHS had to invest a greater share on medicines, noting that its budget allocation on drugs had declined as a percentage of its total funding over the last ten years.
