Britain and America have signed a key bilateral deal that will guarantee zero tariffs on UK medicine products going into the American market.
Key Provisions of the Pact
Under the terms of the agreement, the UK has pledged to increase spending on pharmaceuticals through the public health system. This pledge ensures that import taxes on these vital exports will remain at zero for a timeframe of three years.
This development is in response to recent statements to dramatically increase tariffs on patented drug products, with potential rates floated up to double the cost.
"This agreement between the United Kingdom bolsters the international landscape for cutting-edge drugs and establishes long-overdue fairness to American-British drug exports," a statement said.
Trade Impact
Pharmaceuticals constitute one of the Britain's most significant exports to the US, which is easily the biggest buyer for leading companies like GSK and AstraZeneca.
Trade data reveal that in the year to the end of last September, the UK sold pharmaceutical products worth over eleven billion pounds to the US. This figure accounted for a significant portion of total UK exports in that span.
"This guarantee protects jobs, stimulates investment and facilitates the UK to become a worldwide center for medical research," a minister remarked.
Detailed British Pledges
The pact involves several notable changes from the United Kingdom:
- Revised Affordability Limit: The UK will lift the price threshold at which it judges new treatments to be unaffordable by 25%.
- Boosted Medicine Funding: There is a target to increase overall health service expenditure on medicines from 0.3% of the national economy to 0.6% over the next decade.
- Rebate Cap: The percentage manufacturers must refund to the NHS to prevent overspending will be limited at 15%. Last year, repayments exceeded 20%.
Recent Tensions
The pact takes place against a long-running row between the drug companies and the British authorities over spending levels and approval rates.
These tensions were intensified by claims that American consumers were charged a premium for the equivalent treatments than patients in the UK and Europe.
Recently, several major drug company projects in the UK have been delayed or abandoned, while substantial expansions have been directed toward American operations.
A senior figure acknowledged that the NHS needed to invest a greater share on drugs, noting that its spending on drugs had decreased as a percentage of its resources over the last ten years.
