Britain and America have agreed to a key bilateral deal that will keep zero duties on UK pharmaceutical products going into the US market.
Agreement Details of the Pact
Under the terms of the agreement, the UK has agreed to raise funding on pharmaceuticals through the public health system. This pledge ensures that import taxes on these key products will remain at zero for a timeframe of three years.
This deal comes after recent warnings to hike import taxes on branded drug products, with increases discussed as high as 100%.
"This deal between the United Kingdom reinforces the international landscape for cutting-edge drugs and establishes much-needed equity to transatlantic drug exports," an announcement noted.
Economic Impact
Drugs are one of the Britain's biggest export categories to the United States, which is easily the biggest buyer for leading British pharmaceutical firms.
Trade data indicate that in the one-year period leading up to the third quarter, the UK shipped medicines worth billions to the US. This value made up 17.4% of all goods exports in that span.
"This deal protects work, stimulates funding and paves the way for the UK to establish itself as a worldwide center for biotech and pharma," the Business and Trade Secretary commented.
Key British Pledges
The deal involves several notable commitments from the British government:
- Price Threshold Increase: The UK will raise the price threshold at which it judges new treatments to be unaffordable by twenty-five percent.
- Higher Drug Budget: There is a aim to raise total public funding on drugs from 0.3 percent of the national economy to 0.6% over the coming ten years.
- Refund Ceiling: The percentage manufacturers must refund to the NHS to stay within budget will be limited at 15%. Previously, repayments were more than 20%.
Recent Tensions
The pact comes amid a long-running row between the drug companies and the British authorities over spending levels and approval rates.
The disagreement were exacerbated by arguments that US customers were charged several times more for the equivalent treatments than patients in the UK and Europe.
Recently, several significant manufacturing plans in the UK have been delayed or cancelled, while multi-billion-dollar investments have been announced toward American operations.
The Science Minister acknowledged that the NHS needed to invest a greater share on medicines, noting that its spending on drugs had decreased as a proportion of its total funding over the last ten years.
