🔗 Share this article US and UK Reach No-Tariff Pact on Medicines. Stock image of pharmaceutical trade. The UK and US have concluded a major bilateral deal that will guarantee no duties on British pharmaceutical products entering the US market. The Terms of the Deal As part of the deal, the UK has pledged to raise expenditure on drugs through the public health system. This pledge secures that duties on these key goods will be held at nothing for a period of 36 months. This development is in response to previous threats to significantly raise import taxes on branded pharmaceutical products, with increases floated up to double the cost. "This arrangement with the UK reinforces the international landscape for innovative medicines and establishes long-overdue balance to transatlantic medicine commerce," an announcement said. Economic Significance Medicines constitute one of the the United Kingdom's most significant goods shipped to the United States, which is clearly the biggest destination for large British pharmaceutical firms. Trade data indicate that in the one-year period prior to last September, the UK exported medicines worth over eleven billion pounds to the US. This value made up nearly one-fifth of British export trade in that span. "This deal protects jobs, stimulates investment and sets the stage for the UK to become a worldwide center for biotech and pharma," a minister commented. Key UK Commitments The agreement entails several key changes from the UK: Revised Affordability Limit: The UK will raise the price threshold at which it considers new medicines to be unaffordable by 25%. Increased NHS Spending: There is a aim to increase overall NHS spending on drugs from 0.3 percent of GDP to 0.6 percent over the next decade. Payback Limit: The percentage drug companies must pay back to the NHS to control costs will be capped at 15%. Last year, rebates exceeded 20%. Industry Background The deal follows a protracted tension between the sector and the UK government over drug pricing and regulatory access. These tensions were intensified by arguments that American patients were paying a premium for the equivalent treatments than people in the Britain and the EU. In recent months, several large manufacturing plans in the UK have been delayed or abandoned, while multi-billion-dollar investments have been pledged toward projects in the United States. A senior figure stated that the NHS needed to increase expenditure on drugs, noting that its budget allocation on drugs had declined as a share of its overall budget over the last ten years.
Stock image of pharmaceutical trade. The UK and US have concluded a major bilateral deal that will guarantee no duties on British pharmaceutical products entering the US market. The Terms of the Deal As part of the deal, the UK has pledged to raise expenditure on drugs through the public health system. This pledge secures that duties on these key goods will be held at nothing for a period of 36 months. This development is in response to previous threats to significantly raise import taxes on branded pharmaceutical products, with increases floated up to double the cost. "This arrangement with the UK reinforces the international landscape for innovative medicines and establishes long-overdue balance to transatlantic medicine commerce," an announcement said. Economic Significance Medicines constitute one of the the United Kingdom's most significant goods shipped to the United States, which is clearly the biggest destination for large British pharmaceutical firms. Trade data indicate that in the one-year period prior to last September, the UK exported medicines worth over eleven billion pounds to the US. This value made up nearly one-fifth of British export trade in that span. "This deal protects jobs, stimulates investment and sets the stage for the UK to become a worldwide center for biotech and pharma," a minister commented. Key UK Commitments The agreement entails several key changes from the UK: Revised Affordability Limit: The UK will raise the price threshold at which it considers new medicines to be unaffordable by 25%. Increased NHS Spending: There is a aim to increase overall NHS spending on drugs from 0.3 percent of GDP to 0.6 percent over the next decade. Payback Limit: The percentage drug companies must pay back to the NHS to control costs will be capped at 15%. Last year, rebates exceeded 20%. Industry Background The deal follows a protracted tension between the sector and the UK government over drug pricing and regulatory access. These tensions were intensified by arguments that American patients were paying a premium for the equivalent treatments than people in the Britain and the EU. In recent months, several large manufacturing plans in the UK have been delayed or abandoned, while multi-billion-dollar investments have been pledged toward projects in the United States. A senior figure stated that the NHS needed to increase expenditure on drugs, noting that its budget allocation on drugs had declined as a share of its overall budget over the last ten years.