Britain and America have reached a major trade agreement that will guarantee no import taxes on UK medicine products entering the American market.
Agreement Details of the Deal
As part of the deal, the UK has pledged to raise funding on pharmaceuticals through the public health system. This commitment ensures that tariffs on these crucial products will be held at nothing for a duration of 36 months.
This deal comes after earlier warnings to significantly raise tariffs on branded pharmaceutical products, with potential rates floated up to double the cost.
"This deal between the United Kingdom strengthens the worldwide climate for innovative medicines and introduces long-overdue fairness to transatlantic pharmaceutical trade," a release said.
Commercial Importance
Medicines constitute one of the the United Kingdom's largest exports to the US, which is clearly the primary destination for large British pharmaceutical firms.
Statistics show that in the one-year period leading up to the third quarter, the UK sold pharmaceutical products valued at over eleven billion pounds to the US. This figure made up 17.4% of total UK exports in that timeframe.
"This guarantee secures work, stimulates investment and paves the way for the UK to become a global hub for biotech and pharma," the Business and Trade Secretary stated.
Key British Pledges
The agreement involves several specific commitments from the United Kingdom:
- Higher Cost Ceiling: The UK will lift the affordability limit at which it deems new treatments to be prohibitively costly by a quarter.
- Increased NHS Spending: There is a aim to increase overall NHS spending on medicines from 0.3% of the national economy to 0.6 percent over the next decade.
- Rebate Cap: The sum pharmaceutical firms must return to the NHS to control costs will be capped at 15%. In the past, refunds topped 20%.
Industry Background
This agreement follows a ongoing row between the sector and the British authorities over medicine costs and NHS adoption.
These tensions were exacerbated by arguments that US patients were paying several times more for the equivalent treatments than patients in the UK and Europe.
Recently, several significant pharmaceutical investments in the UK have been delayed or abandoned, while major investments have been announced toward US facilities.
The Science Minister publicly accepted that the NHS must invest a greater share on treatments, noting that its expenditure on drugs had decreased as a share of its overall budget over the previous ten-year period.
