Britain and America have signed a important trade agreement that will keep no levies on UK drug shipments going into the US market.
The Terms of the Deal
Under the terms of the agreement, the UK has agreed to increase funding on drugs through the public health system. This pledge ensures that duties on these crucial exports will remain at zero for a timeframe of the next three years.
This deal comes after recent statements to significantly raise import taxes on patented drug imports, with increases discussed up to 100%.
"This agreement between the United Kingdom bolsters the worldwide climate for new treatments and introduces much-needed equity to transatlantic medicine commerce," a statement declared.
Trade Importance
Pharmaceuticals constitute one of the the United Kingdom's most significant goods shipped to the US, which is easily the primary destination for major companies like GSK and AstraZeneca.
Export figures show that in the 12 months to the end of last September, the UK exported drugs worth over eleven billion pounds to the US. This amount represented a significant portion of British export trade in that timeframe.
"This agreement protects work, boosts funding and sets the stage for the UK to become a global hub for biotech and pharma," a minister remarked.
Specific UK Commitments
The deal entails several specific commitments from the UK:
- 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 target to double total health service expenditure on treatments from 0.3 percent of Gross Domestic Product to 0.6% over the following ten-year period.
- Payback Limit: The percentage pharmaceutical firms must refund to the NHS to prevent overspending will be restricted at fifteen percent. Last year, repayments topped twenty percent.
Industry Background
This agreement follows a protracted row between the pharmaceutical industry and the ministers over medicine costs and approval rates.
These tensions were heightened by arguments that American patients were paying a premium for the equivalent treatments than people in the UK and Europe.
Over the last 18 months, several major manufacturing plans in the UK have been delayed or cancelled, while multi-billion-dollar funding commitments have been announced toward US facilities.
One official stated that the NHS must spend more on drugs, noting that its expenditure on drugs had decreased as a percentage of its resources over the previous ten-year period.
