Britain and America have established a major trade agreement that will preserve no tariffs on British pharmaceutical shipments entering the American market.
Agreement Details of the Accord
As part of the deal, the UK has committed to increase expenditure on medicines through the public health system. This pledge ensures that import taxes on these key exports will be held at nothing for a timeframe of the next three years.
This agreement comes after recent statements to dramatically increase tariffs on branded pharmaceutical products, with increases floated up to double the cost.
"This agreement with the Britain strengthens the global environment for innovative medicines and brings much-needed balance to transatlantic drug exports," a release said.
Economic Importance
Pharmaceuticals constitute one of the the United Kingdom's largest exports to the America, which is clearly the largest buyer for leading British pharmaceutical firms.
Export figures indicate that in the one-year period prior to September, the UK exported pharmaceutical products worth billions to the US. This value represented a significant portion of British export trade in that timeframe.
"This guarantee safeguards work, increases capital expenditure and sets the stage for the UK to establish itself as a worldwide center for medical research," the Business and Trade Secretary remarked.
Detailed British Pledges
The agreement includes several notable pledges from the United Kingdom:
- Revised Affordability Limit: The UK will increase the affordability limit at which it deems new treatments to be too expensive by 25%.
- Boosted Medicine Funding: There is a target to increase total NHS spending on drugs from 0.3% of GDP to 0.6 percent over the following ten-year period.
- Rebate Cap: The amount drug companies must return to the NHS to prevent overspending will be capped at 15%. Previously, repayments were more than 20%.
Recent Tensions
The deal follows a ongoing row between the sector and the UK government over drug pricing and approval rates.
This friction were intensified by arguments that US patients were paying a premium for the same drugs than patients in the Britain and the EU.
In recent months, several significant drug company projects in the UK have been delayed or scrapped, while major funding commitments have been directed toward projects in the United States.
One official acknowledged that the NHS had to spend more on treatments, noting that its spending on drugs had shrunk as a share of its overall budget over the previous ten-year period.
