Britain and America have signed a important bilateral deal that will ensure no import taxes on British medicine shipments going into the American market.
Agreement Details of the Deal
Under the terms of the agreement, the UK has agreed to increase expenditure on drugs through the National Health Service (NHS). This commitment ensures that duties on these vital goods will stay at zero for a timeframe of three years.
This agreement is in response to previous threats to significantly raise tariffs on patented drug imports, with potential rates floated up to 100%.
"This arrangement with the UK strengthens the international landscape for new treatments and establishes long-overdue equity to transatlantic pharmaceutical trade," a release noted.
Economic Importance
Drugs constitute one of the Britain's biggest exports to the United States, which is easily the largest destination for leading UK drugmakers.
Export figures show that in the one-year period leading up to last September, the UK sold drugs valued at over eleven billion pounds to the US. This value accounted for 17.4% of all goods exports in that timeframe.
"This guarantee secures work, boosts investment and sets the stage for the UK to establish itself as a global hub for biotech and pharma," a minister stated.
Specific NHS Changes
The agreement entails several notable pledges from the British government:
- Revised Affordability Limit: The UK will increase the affordability limit at which it judges new treatments to be prohibitively costly by twenty-five percent.
- Boosted Medicine Funding: There is a aim to raise total public funding on drugs from 0.3 percent of GDP to 0.6% over the coming ten years.
- Rebate Cap: The percentage drug companies must refund to the NHS to control costs will be capped at 15%. In the past, rebates topped twenty percent.
Broader Context
The pact comes amid a long-running dispute between the pharmaceutical industry and the ministers over spending levels and approval rates.
This friction were heightened by arguments that American customers were charged a premium for the same drugs than consumers in the Britain and the EU.
Over the last 18 months, several large drug company projects in the UK have been delayed or abandoned, while multi-billion-dollar funding commitments have been announced toward projects in the United States.
The Science Minister acknowledged that the NHS needed to invest a greater share on medicines, noting that its expenditure on drugs had declined as a proportion of its resources over the previous ten-year period.
