Britain and America have agreed to a key trade agreement that will guarantee zero import taxes on British drug shipments going into the American market.
Agreement Details of the Pact
Under the terms of the agreement, the UK has agreed to raise funding on pharmaceuticals through the NHS. This commitment secures that duties on these crucial goods will be held at zero for a period of 36 months.
This deal comes after earlier statements to dramatically increase import taxes on patented pharmaceutical imports, with figures mentioned up to double the cost.
"This agreement between the United Kingdom reinforces the international landscape for new treatments and establishes long-overdue fairness to American-British pharmaceutical trade," an announcement declared.
Economic Importance
Drugs are one of the UK's biggest export categories to the US, which is easily the biggest destination for major British pharmaceutical firms.
Export figures show that in the year leading up to last September, the UK exported medicines valued at over eleven billion pounds to the US. This amount accounted for a significant portion of all goods exports in that period.
"This agreement safeguards jobs, boosts funding and facilitates the UK to emerge as a global hub for life sciences," the Business and Trade Secretary stated.
Specific NHS Changes
The agreement includes several specific commitments from the United Kingdom:
- Higher Cost Ceiling: The UK will increase the price threshold at which it judges new therapies to be unaffordable by twenty-five percent.
- Boosted Medicine Funding: There is a aim to increase total health service expenditure on medicines from 0.3% of the national economy to 0.6% over the next decade.
- Payback Limit: The percentage manufacturers must refund to the NHS to control costs will be limited at fifteen percent. Last year, rebates exceeded twenty percent.
Recent Tensions
This agreement takes place against a protracted row between the drug companies and the UK government over medicine costs and approval rates.
These tensions were intensified by arguments that US patients were charged several times more for the same drugs than patients in the Britain and the EU.
Recently, several major drug company projects in the UK have been delayed or cancelled, while multi-billion-dollar funding commitments have been directed toward projects in the United States.
The Science Minister stated that the NHS must increase expenditure on treatments, noting that its expenditure on drugs had decreased as a percentage of its overall budget over the past decade.
