The United Kingdom and the United States have announced a important trade agreement that will guarantee no duties on UK medicine products being sold in the US market.
The Terms of the Deal
As part of the deal, the UK has committed to raise expenditure on medicines through the public health system. This move ensures that duties on these vital exports will remain at nothing for a timeframe of the next three years.
This agreement is in response to recent statements to hike import taxes on patented pharmaceutical products, with figures discussed as high as double the cost.
"This agreement between the Britain strengthens the worldwide climate for innovative medicines and introduces long-overdue fairness to transatlantic pharmaceutical trade," a statement noted.
Commercial Importance
Pharmaceuticals represent one of the UK's biggest export categories to the US, which is easily the largest buyer for large British pharmaceutical firms.
Export figures indicate that in the 12 months prior to September, the UK exported medicines worth billions to the US. This figure represented 17.4% of all goods exports in that timeframe.
"This agreement secures employment, increases investment and sets the stage for the UK to emerge as a global hub for life sciences," a minister commented.
Specific NHS Changes
The agreement entails several notable pledges from the UK:
- Price Threshold Increase: The UK will increase the affordability limit at which it considers new medicines to be unaffordable by 25%.
- Higher Drug Budget: There is a goal to double total health service expenditure on treatments from 0.3% of GDP to 0.6% over the coming ten years.
- Rebate Cap: The percentage pharmaceutical firms must refund to the NHS to control costs will be limited at 15%. Last year, repayments were more than 20%.
Broader Context
The deal comes amid a ongoing row between the drug companies and the ministers over spending levels and regulatory access.
The disagreement were exacerbated by claims that American patients were paying significantly more for the same drugs than people in the Britain and the EU.
Recently, several large pharmaceutical investments in the UK have been paused or cancelled, while major investments have been announced toward American operations.
One official publicly accepted that the NHS had to spend more on treatments, noting that its expenditure on drugs had decreased as a share of its resources over the past decade.
