The UK and US have secured a landmark bilateral deal that will guarantee no tariffs on British medicine shipments entering the American market.
The Terms of the Accord
Under the terms of the agreement, the UK has agreed to raise spending on pharmaceuticals through the National Health Service (NHS). This pledge ensures that tariffs on these crucial exports will stay at nothing for a duration of the next three years.
This deal follows earlier statements to hike duties on patented drug imports, with figures mentioned as high as 100%.
"This agreement between the Britain strengthens the worldwide climate for cutting-edge drugs and introduces much-needed fairness to transatlantic pharmaceutical trade," an announcement noted.
Economic Importance
Drugs are one of the the United Kingdom's largest export categories to the US, which is clearly the largest destination for leading UK drugmakers.
Statistics indicate that in the one-year period leading up to last September, the UK shipped medicines valued at £11.1bn to the US. This figure accounted for nearly one-fifth of British export trade in that span.
"This agreement protects employment, increases funding and paves the way for the UK to emerge as a worldwide center for life sciences," a minister commented.
Specific UK Commitments
The deal entails several notable changes from the British government:
- Revised Affordability Limit: The UK will lift the cost ceiling at which it considers new therapies to be too expensive by 25%.
- Higher Drug Budget: There is a target to raise total health service expenditure on medicines from 0.3 percent of the national economy to 0.6% over the next decade.
- Refund Ceiling: The amount drug companies must return to the NHS to control costs will be capped at 15%. Last year, rebates were more than twenty percent.
Recent Tensions
The deal takes place against a protracted dispute between the pharmaceutical industry and the ministers over medicine costs and regulatory access.
These tensions were intensified by arguments that American consumers were charged a premium for the equivalent treatments than consumers in the other developed nations.
Recently, several large manufacturing plans in the UK have been delayed or scrapped, while multi-billion-dollar funding commitments have been announced toward projects in the United States.
A senior figure acknowledged that the NHS had to spend more on drugs, noting that its expenditure on drugs had declined as a percentage of its total funding over the last ten years.
