The United Kingdom and the United States have concluded a landmark trade agreement that will maintain no levies on British medicine exports being sold in the US market.
The Terms of the Accord
As part of the deal, the UK has agreed to increase expenditure on medicines through the public health system. This commitment secures that import taxes on these crucial goods will be held at zero for a timeframe of three years.
This agreement comes after previous warnings to hike import taxes on patented pharmaceutical imports, with potential rates floated reaching double the cost.
"This deal between the United Kingdom reinforces the global environment for new treatments and establishes much-needed balance to transatlantic drug exports," a release said.
Economic Significance
Drugs are one of the the United Kingdom's most significant exports to the US, which is clearly the largest destination for leading UK drugmakers.
Export figures reveal that in the year prior to September, the UK exported medicines worth over eleven billion pounds to the US. This value made up nearly one-fifth of total UK exports in that span.
"This guarantee secures jobs, increases capital expenditure and sets the stage for the UK to emerge as a international leader for medical research," the Business and Trade Secretary commented.
Detailed UK Commitments
The deal entails several key changes from the United Kingdom:
- Revised Affordability Limit: The UK will raise the price threshold at which it judges new therapies to be unaffordable by a quarter.
- Increased NHS Spending: There is a goal to double total NHS spending on treatments from 0.3 percent of the national economy to 0.6 percent over the following ten-year period.
- Refund Ceiling: The sum manufacturers must refund to the NHS to control costs will be restricted at 15%. In the past, rebates topped 20%.
Industry Background
The deal comes amid a long-running row between the pharmaceutical industry and the British authorities over spending levels and regulatory access.
These tensions were intensified by assertions that US patients were charged significantly more for the same drugs than patients in the Britain and the EU.
Recently, several major manufacturing plans in the UK have been delayed or abandoned, while major expansions have been announced toward projects in the United States.
The Science Minister stated that the NHS must invest a greater share on drugs, noting that its expenditure on drugs had shrunk as a share of its overall budget over the last ten years.
