Britain and America have announced a key trade agreement that will keep zero levies on UK drug shipments going into the US market.
Key Provisions of the Deal
Under the terms of the agreement, the UK has pledged to increase funding on drugs through the public health system. This pledge guarantees that duties on these key exports will remain at nothing for a timeframe of the next three years.
This development follows recent threats to dramatically increase duties on branded pharmaceutical products, with potential rates floated reaching double the cost.
"This deal between the UK bolsters the worldwide climate for new treatments and brings long-overdue equity to U.S.–U.K. pharmaceutical trade," a release declared.
Commercial Impact
Medicines constitute one of the Britain's largest exports to the United States, which is clearly the biggest market for large companies like GSK and AstraZeneca.
Export figures show that in the one-year period leading up to September, the UK shipped medicines totaling £11.1bn to the US. This amount made up a significant portion of total UK exports in that span.
"This agreement secures work, boosts investment and facilitates the UK to establish itself as a worldwide center for biotech and pharma," the Business and Trade Secretary remarked.
Key UK Commitments
The pact includes several notable commitments from the United Kingdom:
- Price Threshold Increase: The UK will raise the affordability limit at which it judges new therapies to be too expensive by twenty-five percent.
- Boosted Medicine Funding: There is a target to raise overall public funding on treatments from 0.3% of GDP to 0.6 percent over the next decade.
- Payback Limit: The percentage manufacturers must return to the NHS to stay within budget will be limited at fifteen percent. In the past, repayments topped 20%.
Industry Background
The pact follows a ongoing row between the sector and the UK government over spending levels and approval rates.
The disagreement were exacerbated by claims that American patients were paying significantly more for the same drugs than consumers in the Britain and the EU.
Over the last 18 months, several major drug company projects in the UK have been delayed or scrapped, while major investments have been directed toward US facilities.
A senior figure stated that the NHS had to spend more on medicines, noting that its expenditure on drugs had shrunk as a percentage of its overall budget over the last ten years.
