Britain and America have forged a major trade agreement that will ensure no import taxes on British drug shipments going into the US market.
The Terms of the Accord
Under the terms of the agreement, the UK has pledged to boost spending on medicines through the National Health Service (NHS). This pledge ensures that import taxes on these crucial products will remain at nothing for a period of 36 months.
This agreement comes after previous warnings to significantly raise duties on patented drug products, with figures discussed up to 100%.
"This arrangement with the UK strengthens the worldwide climate for cutting-edge drugs and introduces much-needed equity to transatlantic drug exports," a release noted.
Commercial Importance
Medicines are one of the UK's largest goods shipped to the United States, which is easily the primary buyer for major companies like GSK and AstraZeneca.
Export figures show that in the year leading up to last September, the UK sold pharmaceutical products worth £11.1bn to the US. This value made up nearly one-fifth of total UK exports in that span.
"This deal secures employment, increases investment and paves the way for the UK to become a international leader for life sciences," a minister remarked.
Key UK Commitments
The deal involves several key commitments from the United Kingdom:
- Price Threshold Increase: The UK will increase the price threshold at which it deems new treatments to be prohibitively costly by 25%.
- Increased NHS Spending: There is a target to double total NHS spending on drugs from 0.3 percent of GDP to 0.6 percent over the coming ten years.
- Payback Limit: The percentage drug companies must refund to the NHS to stay within budget will be limited at 15%. Last year, rebates were more than 20%.
Broader Context
The deal follows a protracted tension between the drug companies and the UK government over spending levels and regulatory access.
The disagreement were intensified by assertions that US patients were charged several times more for the identical medicines than patients in the Britain and the EU.
Over the last 18 months, several significant pharmaceutical investments in the UK have been halted or scrapped, while major investments have been pledged toward projects in the United States.
One official stated that the NHS must spend more on medicines, noting that its expenditure on drugs had decreased as a proportion of its resources over the last ten years.
