The United Kingdom and the United States have forged a landmark commercial pact that will guarantee no tariffs on British medicine products being sold in the US market.
Agreement Details of the Pact
Under the terms of the agreement, the UK has pledged to increase funding on drugs through the public health system. This move ensures that import taxes on these key exports will remain at zero for a period of 36 months.
This agreement is in response to previous threats to dramatically increase duties on patented pharmaceutical products, with figures mentioned as high as one hundred percent.
"This agreement between the UK reinforces the international landscape for new treatments and brings long-overdue balance to transatlantic pharmaceutical trade," a release declared.
Economic Importance
Medicines represent one of the the United Kingdom's largest goods shipped to the US, which is clearly the largest buyer for large companies like GSK and AstraZeneca.
Trade data show that in the year to the end of last September, the UK shipped drugs worth £11.1bn to the US. This amount made up 17.4% of all goods exports in that period.
"This guarantee secures work, boosts funding and sets the stage for the UK to become a worldwide center for biotech and pharma," the Business and Trade Secretary remarked.
Key British Pledges
The pact entails several notable commitments from the British government:
- Price Threshold Increase: The UK will lift the price threshold at which it considers new treatments to be too expensive by twenty-five percent.
- Higher Drug Budget: There is a aim to double overall health service expenditure on drugs from 0.3% of GDP to 0.6 percent over the following ten-year period.
- Payback Limit: The amount drug companies must pay back to the NHS to control costs will be capped at 15%. Last year, refunds topped twenty percent.
Industry Background
The pact takes place against a long-running tension between the drug companies and the UK government over spending levels and regulatory access.
The disagreement were heightened by arguments that American patients were paying several times more for the equivalent treatments than patients in the Britain and the EU.
Over the last 18 months, several large manufacturing plans in the UK have been paused or scrapped, while substantial expansions have been announced toward US facilities.
The Science Minister acknowledged that the NHS had to increase expenditure on medicines, noting that its spending on drugs had decreased as a proportion of its total funding over the previous ten-year period.
