The United Kingdom and the United States have hammered out a important trade agreement that will ensure no duties on British medicine products entering the American market.
Agreement Details of the Accord
As part of the deal, the UK has committed to raise expenditure on pharmaceuticals through the National Health Service (NHS). This commitment secures that tariffs on these vital goods will remain at zero for a period of 36 months.
This deal follows previous warnings to dramatically increase import taxes on patented drug products, with potential rates floated up to one hundred percent.
"This agreement between the UK bolsters the international landscape for innovative medicines and introduces much-needed balance to American-British drug exports," a statement declared.
Economic Significance
Pharmaceuticals represent one of the the United Kingdom's biggest exports to the United States, which is easily the biggest destination for major British pharmaceutical firms.
Trade data reveal that in the year to the end of last September, the UK shipped drugs totaling over eleven billion pounds to the US. This figure accounted for 17.4% of total UK exports in that span.
"This guarantee secures jobs, stimulates capital expenditure and paves the way for the UK to establish itself as a worldwide center for biotech and pharma," the Business and Trade Secretary stated.
Specific British Pledges
The pact includes several specific pledges from the United Kingdom:
- Revised Affordability Limit: The UK will increase the cost ceiling at which it deems new medicines to be unaffordable by a quarter.
- Higher Drug Budget: There is a goal to increase total public funding on medicines from 0.3 percent of GDP to 0.6 percent over the next decade.
- Rebate Cap: The percentage pharmaceutical firms must refund to the NHS to control costs will be limited at 15%. Last year, rebates topped 20%.
Recent Tensions
This agreement takes place against a ongoing tension between the sector and the UK government over spending levels and approval rates.
These tensions were exacerbated by arguments that US patients were paying several times more for the same drugs than consumers in the Britain and the EU.
Recently, several large manufacturing plans in the UK have been delayed or scrapped, while major expansions have been directed toward US facilities.
The Science Minister acknowledged that the NHS must invest a greater share on drugs, noting that its spending on drugs had decreased as a percentage of its resources over the last ten years.
