The United Kingdom and the United States have hammered out a key bilateral deal that will ensure no duties on UK medicine shipments being sold in the US market.
Agreement Details of the Accord
As part of the deal, the UK has pledged to increase expenditure on medicines through the National Health Service (NHS). This move ensures that duties on these crucial goods will be held at zero for a timeframe of the next three years.
This agreement is in response to recent statements to dramatically increase duties on patented drug products, with figures discussed as high as one hundred percent.
"This agreement with the Britain bolsters the worldwide climate for new treatments and establishes much-needed fairness to American-British drug exports," a release noted.
Economic Importance
Pharmaceuticals are one of the Britain's largest export categories to the United States, which is easily the primary destination for major companies like GSK and AstraZeneca.
Statistics indicate that in the one-year period to the end of the third quarter, the UK exported medicines totaling billions to the US. This figure represented nearly one-fifth of British export trade in that period.
"This agreement safeguards employment, increases capital expenditure and paves the way for the UK to emerge as a global hub for biotech and pharma," the Business and Trade Secretary commented.
Specific NHS Changes
The agreement entails several specific pledges from the UK:
- Revised Affordability Limit: The UK will raise the price threshold at which it considers new medicines to be prohibitively costly by twenty-five percent.
- Boosted Medicine Funding: There is a aim to double overall health service expenditure on drugs from 0.3% of the national economy to 0.6% over the next decade.
- Payback Limit: The percentage drug companies must pay back to the NHS to control costs will be capped at 15%. Last year, refunds were more than twenty percent.
Broader Context
The deal follows a long-running row between the sector and the British authorities over spending levels and NHS adoption.
These tensions were intensified by assertions that American customers were paying several times more for the same drugs than consumers in the other developed nations.
Over the last 18 months, several major drug company projects in the UK have been delayed or abandoned, while substantial investments have been announced toward US facilities.
One official stated that the NHS must invest a greater share on medicines, noting that its spending on drugs had decreased as a proportion of its overall budget over the previous ten-year period.
