The United Kingdom and the United States have established a major bilateral deal that will ensure no duties on UK drug exports entering the American market.
Agreement Details of the Accord
Under the terms of the agreement, the UK has pledged to increase spending on drugs through the public health system. This pledge guarantees that duties on these key products will be held at zero for a period of three years.
This deal comes after previous threats to dramatically increase tariffs on branded drug products, with figures discussed as high as double the cost.
"This deal between the United Kingdom strengthens the global environment for innovative medicines and establishes long-overdue equity to American-British pharmaceutical trade," an announcement said.
Commercial Impact
Drugs are one of the the United Kingdom's biggest exports to the United States, which is by far the largest market for leading companies like GSK and AstraZeneca.
Statistics reveal that in the year prior to the third quarter, the UK shipped pharmaceutical products totaling £11.1bn to the US. This value accounted for a significant portion of total UK exports in that span.
"This deal safeguards work, increases investment and sets the stage for the UK to become a global hub for medical research," the Business and Trade Secretary commented.
Detailed NHS Changes
The deal involves several notable pledges from the United Kingdom:
- Higher Cost Ceiling: The UK will lift the price threshold at which it deems new treatments to be too expensive by 25%.
- Boosted Medicine Funding: There is a goal to double total NHS spending on drugs from 0.3 percent of the national economy to 0.6% over the next decade.
- Rebate Cap: The sum manufacturers must return to the NHS to prevent overspending will be capped at fifteen percent. Last year, rebates exceeded twenty percent.
Recent Tensions
The deal follows a ongoing tension between the drug companies and the UK government over drug pricing and approval rates.
This friction were intensified by assertions that American customers were charged a premium for the equivalent treatments than consumers in the UK and Europe.
Over the last 18 months, several major manufacturing plans in the UK have been delayed or cancelled, while substantial funding commitments have been pledged toward American operations.
The Science Minister acknowledged that the NHS must invest a greater share on medicines, noting that its budget allocation on drugs had decreased as a percentage of its total funding over the past decade.
