The United Kingdom and the United States have secured a significant commercial pact that will keep zero import taxes on British pharmaceutical exports being sold in the US market.
The Terms of the Deal
As part of the deal, the UK has agreed to raise funding on pharmaceuticals through the National Health Service (NHS). This move ensures that tariffs on these key goods will remain at zero for a duration of three years.
This deal is in response to recent threats to significantly raise duties on patented drug products, with figures mentioned up to one hundred percent.
"This deal with the UK strengthens the international landscape for innovative medicines and establishes much-needed fairness to American-British pharmaceutical trade," a release said.
Commercial Significance
Medicines constitute one of the Britain's largest exports to the America, which is by far the largest market for large companies like GSK and AstraZeneca.
Statistics reveal that in the year prior to last September, the UK sold pharmaceutical products valued at over eleven billion pounds to the US. This value made up a significant portion of all goods exports in that timeframe.
"This deal protects jobs, increases capital expenditure and sets the stage for the UK to emerge as a global hub for life sciences," the Business and Trade Secretary remarked.
Specific British Pledges
The pact includes several notable commitments from the UK:
- Revised Affordability Limit: The UK will increase the cost ceiling at which it considers new treatments to be too expensive by a quarter.
- Boosted Medicine Funding: There is a target to double total health service expenditure on treatments from 0.3 percent of GDP to 0.6 percent over the next decade.
- Refund Ceiling: The sum drug companies must refund to the NHS to control costs will be restricted at 15%. Last year, refunds exceeded twenty percent.
Recent Tensions
The deal follows a protracted tension between the drug companies and the UK government over drug pricing and approval rates.
The disagreement were exacerbated by claims that American patients were paying significantly more for the same drugs than patients in the UK and Europe.
Recently, several significant pharmaceutical investments in the UK have been halted or cancelled, while multi-billion-dollar investments have been pledged toward projects in the United States.
The Science Minister acknowledged that the NHS had to spend more on drugs, noting that its expenditure on drugs had shrunk as a proportion of its total funding over the previous ten-year period.
