The United Kingdom and the United States have forged a major trade agreement that will keep no import taxes on British medicine shipments going into the American market.
The Terms of the Pact
Under the terms of the agreement, the UK has agreed to increase expenditure on pharmaceuticals through the National Health Service (NHS). This move secures that duties on these vital exports will be held at nothing for a timeframe of the next three years.
This deal comes after recent statements to hike duties on patented drug products, with increases discussed reaching one hundred percent.
"This deal between the UK strengthens the international landscape for innovative medicines and establishes much-needed equity to transatlantic medicine commerce," a statement noted.
Economic Importance
Pharmaceuticals are one of the the United Kingdom's most significant goods shipped to the America, which is clearly the largest destination for large companies like GSK and AstraZeneca.
Export figures reveal that in the 12 months prior to September, the UK shipped medicines totaling over eleven billion pounds to the US. This figure accounted for a significant portion of total UK exports in that timeframe.
"This guarantee secures work, stimulates investment and paves the way for the UK to establish itself as a worldwide center for medical research," the Business and Trade Secretary remarked.
Detailed NHS Changes
The pact involves several specific commitments from the UK:
- Higher Cost Ceiling: The UK will lift the cost ceiling at which it deems new therapies to be prohibitively costly by twenty-five percent.
- Higher Drug Budget: There is a goal to increase overall public funding on drugs from 0.3 percent of GDP to 0.6% over the coming ten years.
- Payback Limit: The sum drug companies must pay back to the NHS to prevent overspending will be restricted at 15%. In the past, refunds were more than twenty percent.
Broader Context
This agreement comes amid a long-running row between the drug companies and the ministers over spending levels and regulatory access.
The disagreement were heightened by claims that US customers were paying a premium for the identical medicines than consumers in the UK and Europe.
Over the last 18 months, several large drug company projects in the UK have been paused or abandoned, while major investments have been announced toward projects in the United States.
One official publicly accepted that the NHS had to invest a greater share on medicines, noting that its budget allocation on drugs had decreased as a share of its overall budget over the last ten years.
