The UK and US have agreed to a major commercial pact that will preserve zero duties on British pharmaceutical shipments entering the American market.
The Terms of the Accord
As part of the deal, the UK has agreed to increase spending on medicines through the National Health Service (NHS). This commitment secures that duties on these key products will be held at nothing for a timeframe of 36 months.
This deal comes after earlier warnings to dramatically increase import taxes on patented drug products, with increases mentioned reaching 100%.
"This deal between the Britain strengthens the global environment for cutting-edge drugs and introduces long-overdue equity to American-British pharmaceutical trade," a statement declared.
Economic Importance
Medicines constitute one of the Britain's biggest export categories to the US, which is by far the biggest market for large companies like GSK and AstraZeneca.
Statistics reveal that in the one-year period prior to September, the UK shipped medicines worth £11.1bn to the US. This amount made up 17.4% of total UK exports in that span.
"This deal secures employment, boosts funding and sets the stage for the UK to establish itself as a international leader for biotech and pharma," the Business and Trade Secretary stated.
Key NHS Changes
The agreement entails several key pledges from the United Kingdom:
- Price Threshold Increase: The UK will raise the price threshold at which it deems new medicines to be too expensive by 25%.
- Boosted Medicine Funding: There is a aim to raise total health service expenditure on medicines from 0.3 percent of the national economy to 0.6% over the next decade.
- Rebate Cap: The percentage manufacturers must pay back to the NHS to prevent overspending will be limited at 15%. In the past, repayments were more than 20%.
Recent Tensions
The pact takes place against a long-running tension between the sector and the ministers over spending levels and NHS adoption.
The disagreement were heightened by claims that US patients were charged a premium for the identical medicines than people in the UK and Europe.
In recent months, several major manufacturing plans in the UK have been delayed or abandoned, while substantial expansions have been pledged toward projects in the United States.
The Science Minister stated that the NHS needed to increase expenditure on drugs, noting that its spending on drugs had decreased as a percentage of its total funding over the previous ten-year period.
