The UK and US have established a landmark commercial pact that will ensure zero levies on UK drug products being sold in the American market.
Key Provisions of the Accord
As part of the deal, the UK has agreed to raise expenditure on drugs through the NHS. This pledge ensures that import taxes on these vital goods will be held at zero for a period of the next three years.
This deal is in response to earlier threats to dramatically increase import taxes on patented pharmaceutical imports, with figures mentioned as high as double the cost.
"This agreement with the United Kingdom bolsters the worldwide climate for new treatments and brings much-needed equity to transatlantic pharmaceutical trade," a release said.
Economic Importance
Medicines represent one of the UK's biggest goods shipped to the United States, which is easily the primary destination for leading UK drugmakers.
Export figures show that in the one-year period prior to September, the UK sold pharmaceutical products valued at £11.1bn to the US. This amount represented 17.4% of British export trade in that timeframe.
"This deal safeguards jobs, increases capital expenditure and sets the stage for the UK to become a global hub for life sciences," a government official commented.
Detailed NHS Changes
The agreement includes several specific pledges from the United Kingdom:
- Revised Affordability Limit: The UK will raise the affordability limit at which it judges new treatments to be prohibitively costly by 25%.
- Boosted Medicine Funding: There is a aim to raise overall health service expenditure on medicines from 0.3% of the national economy to 0.6% over the following ten-year period.
- Payback Limit: The amount manufacturers must return to the NHS to prevent overspending will be restricted at fifteen percent. Previously, refunds were more than 20%.
Recent Tensions
The pact follows a long-running row between the pharmaceutical industry and the British authorities over spending levels and NHS adoption.
These tensions were exacerbated by arguments that American consumers were charged significantly more for the equivalent treatments than consumers in the other developed nations.
Recently, several significant manufacturing plans in the UK have been delayed or scrapped, while substantial expansions have been pledged toward American operations.
The Science Minister acknowledged that the NHS needed to invest a greater share on medicines, noting that its expenditure on drugs had decreased as a proportion of its resources over the past decade.
