The UK and US have forged a major bilateral deal that will keep zero import taxes on UK pharmaceutical shipments going into the US market.
Key Provisions of the Accord
In exchange for the tariff guarantee, the UK has agreed to boost expenditure on pharmaceuticals through the NHS. This move guarantees that import taxes on these key exports will remain at nothing for a timeframe of 36 months.
This agreement follows recent statements to significantly raise import taxes on patented pharmaceutical products, with increases floated as high as double the cost.
"This arrangement with the United Kingdom bolsters the international landscape for cutting-edge drugs and establishes much-needed balance to transatlantic drug exports," a release said.
Commercial Importance
Pharmaceuticals represent one of the Britain's biggest goods shipped to the United States, which is clearly the largest buyer for leading companies like GSK and AstraZeneca.
Statistics show that in the year prior to last September, the UK sold medicines valued at over eleven billion pounds to the US. This value accounted for a significant portion of all goods exports in that timeframe.
"This agreement protects jobs, stimulates funding and sets the stage for the UK to establish itself as a global hub for medical research," a minister remarked.
Detailed British Pledges
The pact entails several notable pledges from the British government:
- Price Threshold Increase: The UK will lift the affordability limit at which it considers new treatments to be unaffordable by 25%.
- Boosted Medicine Funding: There is a target to double total NHS spending on treatments from 0.3 percent of the national economy to 0.6 percent over the following ten-year period.
- Rebate Cap: The sum manufacturers must pay back to the NHS to control costs will be limited at fifteen percent. Previously, rebates topped twenty percent.
Recent Tensions
The pact takes place against a ongoing tension between the drug companies and the ministers over spending levels and NHS adoption.
These tensions were intensified by arguments that American patients were charged a premium for the same drugs than people in the Britain and the EU.
Recently, several large pharmaceutical investments in the UK have been delayed or scrapped, while major funding commitments have been pledged toward US facilities.
One official stated that the NHS needed to increase expenditure on drugs, noting that its spending on drugs had declined as a proportion of its overall budget over the last ten years.
