Britain and America have announced a key bilateral deal that will preserve no duties on British medicine products going into the US market.
Key Provisions of the Accord
Under the terms of the agreement, the UK has agreed to raise funding on drugs through the public health system. This move ensures that import taxes on these vital goods will remain at zero for a period of three years.
This deal follows previous statements to dramatically increase duties on branded drug imports, with increases mentioned as high as 100%.
"This agreement between the UK bolsters the global environment for innovative medicines and brings much-needed balance to U.S.–U.K. medicine commerce," an announcement said.
Trade Impact
Drugs represent one of the Britain's biggest export categories to the US, which is by far the biggest market for large companies like GSK and AstraZeneca.
Export figures indicate that in the year to the end of September, the UK sold pharmaceutical products valued at £11.1bn to the US. This value made up 17.4% of total UK exports in that timeframe.
"This deal safeguards work, increases investment and sets the stage for the UK to become a global hub for medical research," a minister stated.
Detailed UK Commitments
The deal includes several key changes from the UK:
- Higher Cost Ceiling: The UK will increase the affordability limit at which it deems new treatments to be too expensive by twenty-five percent.
- Higher Drug Budget: There is a goal to raise overall public funding on treatments from 0.3% of Gross Domestic Product to 0.6 percent over the following ten-year period.
- Rebate Cap: The percentage drug companies must pay back to the NHS to control costs will be capped at fifteen percent. In the past, rebates exceeded 20%.
Recent Tensions
The pact follows a protracted tension between the sector and the ministers over spending levels and approval rates.
These tensions were intensified by claims that American consumers were charged a premium for the equivalent treatments than consumers in the Britain and the EU.
In recent months, several significant manufacturing plans in the UK have been paused or scrapped, while major funding commitments have been pledged toward projects in the United States.
The Science Minister publicly accepted that the NHS had to spend more on medicines, noting that its expenditure on drugs had declined as a proportion of its resources over the previous ten-year period.
