Britain and America have reached a key bilateral deal that will maintain no levies on British pharmaceutical exports going into the American market.
Agreement Details of the Accord
As part of the deal, the UK has agreed to raise spending on pharmaceuticals through the NHS. This commitment guarantees that import taxes on these key products will remain at nothing for a duration of three years.
This deal comes after previous warnings to hike import taxes on branded pharmaceutical products, with increases mentioned reaching 100%.
"This arrangement with the United Kingdom strengthens the global environment for new treatments and brings long-overdue balance to American-British medicine commerce," a release said.
Trade Significance
Medicines constitute one of the the United Kingdom's most significant export categories to the America, which is easily the biggest buyer for large companies like GSK and AstraZeneca.
Export figures reveal that in the one-year period prior to the third quarter, the UK exported drugs totaling over eleven billion pounds to the US. This figure represented 17.4% of total UK exports in that timeframe.
"This guarantee protects employment, increases funding and paves the way for the UK to become a worldwide center for medical research," a minister commented.
Specific British Pledges
The agreement includes several specific commitments from the British government:
- Higher Cost Ceiling: The UK will raise the price threshold at which it deems new medicines to be prohibitively costly by 25%.
- Higher Drug Budget: There is a aim to increase total NHS spending on medicines from 0.3% of Gross Domestic Product to 0.6 percent over the next decade.
- Refund Ceiling: The sum drug companies must pay back to the NHS to stay within budget will be limited at fifteen percent. Previously, repayments were more than twenty percent.
Industry Background
The pact follows a ongoing row between the drug companies and the British authorities over drug pricing and NHS adoption.
These tensions were exacerbated by arguments that American customers were paying significantly more for the equivalent treatments than patients in the UK and Europe.
In recent months, several large drug company projects in the UK have been delayed or abandoned, while major investments have been announced toward US facilities.
A senior figure stated that the NHS must increase expenditure on medicines, noting that its expenditure on drugs had shrunk as a proportion of its total funding over the previous ten-year period.
