Britain and America have secured a key bilateral deal that will maintain no import taxes on UK medicine exports going into the US market.
Key Provisions of the Deal
Under the terms of the agreement, the UK has pledged to raise spending on pharmaceuticals through the public health system. This pledge guarantees that import taxes on these key goods will be held at nothing for a timeframe of three years.
This agreement comes after recent warnings to hike tariffs on branded drug products, with increases discussed up to double the cost.
"This agreement with the United Kingdom strengthens the global environment for new treatments and brings long-overdue equity to transatlantic pharmaceutical trade," a release noted.
Trade Impact
Pharmaceuticals represent one of the the United Kingdom's most significant export categories to the United States, which is by far the largest destination for major companies like GSK and AstraZeneca.
Statistics reveal that in the 12 months leading up to the third quarter, the UK shipped drugs valued at £11.1bn to the US. This amount made up a significant portion of all goods exports in that period.
"This guarantee safeguards employment, stimulates funding and sets the stage for the UK to emerge as a international leader for medical research," a government official stated.
Detailed British Pledges
The pact includes several specific commitments from the British government:
- Price Threshold Increase: The UK will lift the affordability limit at which it judges new medicines to be unaffordable by twenty-five percent.
- Boosted Medicine Funding: There is a aim to double total public funding on drugs from 0.3% of the national economy to 0.6 percent over the coming ten years.
- Payback Limit: The percentage drug companies must refund to the NHS to control costs will be capped at 15%. Last year, refunds topped 20%.
Industry Background
The pact follows a protracted tension between the pharmaceutical industry and the British authorities over medicine costs and NHS adoption.
This friction were heightened by arguments that American patients were charged a premium for the equivalent treatments than consumers in the Britain and the EU.
Recently, several major drug company projects in the UK have been halted or cancelled, while major funding commitments have been pledged toward US facilities.
One official publicly accepted that the NHS must spend more on treatments, noting that its budget allocation on drugs had declined as a share of its total funding over the last ten years.
