Britain and America have agreed to a major trade agreement that will preserve no import taxes on British pharmaceutical products being sold in the US market.
Key Provisions of the Deal
As part of the deal, the UK has committed to raise spending on drugs through the NHS. This commitment guarantees that import taxes on these key goods will stay at zero for a timeframe of the next three years.
This deal follows recent warnings to hike tariffs on branded pharmaceutical products, with increases discussed reaching double the cost.
"This arrangement between the UK bolsters the worldwide climate for cutting-edge drugs and brings long-overdue fairness to American-British medicine commerce," a release noted.
Trade Impact
Pharmaceuticals represent one of the the United Kingdom's largest goods shipped to the United States, which is clearly the largest market for major companies like GSK and AstraZeneca.
Statistics show that in the year prior to last September, the UK sold pharmaceutical products totaling £11.1bn to the US. This amount represented nearly one-fifth of all goods exports in that period.
"This guarantee secures jobs, boosts funding and facilitates the UK to establish itself as a global hub for life sciences," a minister remarked.
Key British Pledges
The pact includes several key changes from the United Kingdom:
- Price Threshold Increase: The UK will raise the price threshold at which it deems new medicines to be too expensive by a quarter.
- Boosted Medicine Funding: There is a target to double overall health service expenditure on treatments from 0.3 percent of GDP to 0.6 percent over the following ten-year period.
- Payback Limit: The sum manufacturers must pay back to the NHS to prevent overspending will be capped at 15%. Last year, repayments topped twenty percent.
Industry Background
The deal follows a long-running row between the drug companies and the British authorities over spending levels and approval rates.
The disagreement were heightened by arguments that US customers were paying several times more for the identical medicines than patients in the Britain and the EU.
Recently, several major drug company projects in the UK have been paused or cancelled, while major investments have been directed toward American operations.
A senior figure acknowledged that the NHS must invest a greater share on drugs, noting that its spending on drugs had decreased as a percentage of its resources over the last ten years.
