The UK and US have concluded a significant commercial pact that will keep zero levies on British medicine shipments going into the American market.
Agreement Details of the Deal
As part of the deal, the UK has agreed to boost expenditure on pharmaceuticals through the NHS. This pledge ensures that import taxes on these key exports will remain at nothing for a timeframe of the next three years.
This agreement comes after recent statements to hike import taxes on patented drug imports, with increases discussed as high as one hundred percent.
"This agreement with the United Kingdom reinforces the international landscape for cutting-edge drugs and brings long-overdue balance to American-British medicine commerce," a release declared.
Economic Importance
Pharmaceuticals represent one of the UK's largest goods shipped to the America, which is clearly the biggest market for large UK drugmakers.
Export figures show that in the year leading up to last September, the UK sold drugs totaling over eleven billion pounds to the US. This figure accounted for nearly one-fifth of British export trade in that span.
"This agreement protects work, increases funding and paves the way for the UK to become a international leader for medical research," a minister stated.
Specific UK Commitments
The pact includes several specific changes from the United Kingdom:
- Revised Affordability Limit: The UK will raise the price threshold at which it deems new treatments to be too expensive by 25%.
- Increased NHS Spending: There is a goal to increase overall NHS spending on drugs from 0.3 percent of GDP to 0.6% over the next decade.
- Rebate Cap: The sum drug companies must refund to the NHS to prevent overspending will be capped at 15%. Previously, rebates exceeded 20%.
Industry Background
The deal comes amid a protracted dispute between the drug companies and the British authorities over spending levels and approval rates.
This friction were exacerbated by claims that American patients were paying several times more for the equivalent treatments than patients in the other developed nations.
Over the last 18 months, several significant manufacturing plans in the UK have been delayed or scrapped, while substantial expansions have been announced toward projects in the United States.
The Science Minister stated that the NHS had to spend more on medicines, noting that its budget allocation on drugs had decreased as a proportion of its resources over the last ten years.
