The United Kingdom and the United States have finalized a key trade agreement that will keep no duties on UK drug exports going into the American market.
The Terms of the Accord
Under the terms of the agreement, the UK has pledged to raise spending on drugs through the public health system. This commitment guarantees that import taxes on these vital goods will be held at nothing for a timeframe of three years.
This agreement follows recent statements to dramatically increase import taxes on patented drug products, with figures mentioned as high as double the cost.
"This arrangement with the Britain bolsters the global environment for innovative medicines and establishes long-overdue fairness to American-British drug exports," a statement noted.
Trade Significance
Medicines represent one of the Britain's largest export categories to the US, which is by far the biggest buyer for large British pharmaceutical firms.
Statistics show that in the 12 months to the end of last September, the UK shipped drugs valued at over eleven billion pounds to the US. This amount made up 17.4% of total UK exports in that timeframe.
"This deal safeguards employment, increases funding and paves the way for the UK to establish itself as a international leader for life sciences," the Business and Trade Secretary stated.
Specific British Pledges
The pact includes several key commitments from the British government:
- Revised Affordability Limit: 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 target to increase overall public funding on treatments from 0.3 percent of Gross Domestic Product to 0.6 percent over the next decade.
- Refund Ceiling: The percentage pharmaceutical firms must return to the NHS to stay within budget will be capped at fifteen percent. In the past, refunds were more than 20%.
Recent Tensions
This agreement comes amid a protracted row between the drug companies and the ministers over drug pricing and regulatory access.
The disagreement were heightened by claims that American consumers were paying significantly more for the equivalent treatments than consumers in the Britain and the EU.
In recent months, several major pharmaceutical investments in the UK have been halted or cancelled, while multi-billion-dollar investments have been directed toward projects in the United States.
The Science Minister stated that the NHS needed to invest a greater share on treatments, noting that its spending on drugs had declined as a proportion of its overall budget over the last ten years.
