Britain and America have reached a important bilateral deal that will keep zero import taxes on British drug shipments entering the American market.
Key Provisions of the Accord
As part of the deal, the UK has committed to boost expenditure on pharmaceuticals through the NHS. This move ensures that duties on these key goods will remain at zero for a period of 36 months.
This development follows previous statements to dramatically increase import taxes on branded pharmaceutical products, with increases floated as high as double the cost.
"This arrangement between the Britain reinforces the worldwide climate for innovative medicines and introduces much-needed fairness to American-British pharmaceutical trade," a statement said.
Trade Impact
Drugs represent one of the Britain's most significant exports to the US, which is clearly the biggest market for large UK drugmakers.
Export figures indicate that in the 12 months to the end of September, the UK exported drugs worth billions to the US. This amount made up nearly one-fifth of British export trade in that span.
"This agreement protects employment, increases capital expenditure and facilitates the UK to emerge as a global hub for life sciences," the Business and Trade Secretary commented.
Key British Pledges
The agreement includes several notable commitments from the British government:
- Higher Cost Ceiling: The UK will raise the cost ceiling at which it deems new treatments to be prohibitively costly by 25%.
- Higher Drug Budget: There is a target to double overall NHS spending on treatments from 0.3 percent of the national economy to 0.6% over the next decade.
- Payback Limit: The amount pharmaceutical firms must refund to the NHS to stay within budget will be limited at 15%. Previously, refunds were more than twenty percent.
Recent Tensions
The deal comes amid a ongoing dispute between the drug companies and the UK government over spending levels and regulatory access.
This friction were heightened by assertions that US patients were charged a premium for the equivalent treatments than patients in the UK and Europe.
In recent months, several major pharmaceutical investments in the UK have been halted or scrapped, while multi-billion-dollar funding commitments have been pledged toward projects in the United States.
The Science Minister publicly accepted that the NHS needed to increase expenditure on treatments, noting that its expenditure on drugs had decreased as a proportion of its overall budget over the previous ten-year period.
