The United Kingdom and the United States have forged a key bilateral deal that will guarantee no levies on British medicine products entering 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 NHS. This pledge secures that import taxes on these key exports will be held at zero for a duration of 36 months.
This deal is in response to previous threats to hike duties on branded pharmaceutical products, with potential rates floated as high as one hundred percent.
"This deal between the United Kingdom strengthens the global environment for new treatments and introduces much-needed fairness to transatlantic medicine commerce," an announcement noted.
Economic Impact
Medicines are one of the Britain's biggest exports to the United States, which is clearly the biggest market for large UK drugmakers.
Export figures indicate that in the one-year period leading up to September, the UK exported drugs totaling £11.1bn to the US. This amount accounted for nearly one-fifth of British export trade in that timeframe.
"This guarantee secures employment, boosts funding and facilitates the UK to establish itself as a worldwide center for medical research," a government official remarked.
Key UK Commitments
The agreement entails several key commitments from the United Kingdom:
- Higher Cost Ceiling: The UK will raise the price threshold at which it deems new therapies to be unaffordable by 25%.
- Increased NHS Spending: There is a target to double overall NHS spending on drugs from 0.3 percent of GDP to 0.6 percent over the next decade.
- Payback Limit: The percentage drug companies must pay back to the NHS to control costs will be limited at 15%. In the past, repayments were more than 20%.
Recent Tensions
The pact follows a protracted row between the pharmaceutical industry and the UK government over spending levels and approval rates.
These tensions were exacerbated by arguments that American patients were charged several times more for the same drugs than consumers in the Britain and the EU.
Recently, several significant pharmaceutical investments in the UK have been delayed or cancelled, while multi-billion-dollar investments have been announced toward projects in the United States.
The Science Minister publicly accepted that the NHS must increase expenditure on drugs, noting that its budget allocation on drugs had declined as a share of its total funding over the previous ten-year period.
