The UK and US have agreed to a key bilateral deal that will keep zero import taxes on UK drug products going into the US market.
The Terms of the Deal
Under the terms of the agreement, the UK has agreed to boost funding on drugs through the public health system. This commitment guarantees that import taxes on these crucial products will stay at zero for a duration of the next three years.
This deal is in response to earlier statements to dramatically increase duties on patented drug products, with figures floated reaching one hundred percent.
"This agreement between the Britain strengthens the worldwide climate for cutting-edge drugs and establishes much-needed balance to American-British pharmaceutical trade," a statement said.
Trade Importance
Drugs represent one of the the United Kingdom's biggest exports to the US, which is easily the biggest buyer for large British pharmaceutical firms.
Statistics show that in the 12 months to the end of last September, the UK shipped drugs valued at billions to the US. This amount accounted for 17.4% of British export trade in that timeframe.
"This deal secures jobs, boosts investment and paves the way for the UK to become a worldwide center for medical research," a minister commented.
Detailed British Pledges
The agreement includes several notable changes from the UK:
- Revised Affordability Limit: The UK will raise the cost ceiling at which it deems new therapies to be too expensive by 25%.
- Higher Drug Budget: There is a goal to raise overall public funding on drugs from 0.3 percent of GDP to 0.6 percent over the following ten-year period.
- Payback Limit: The percentage pharmaceutical firms must pay back to the NHS to stay within budget will be limited at 15%. In the past, rebates were more than twenty percent.
Recent Tensions
The deal comes amid a long-running row between the sector and the ministers over spending levels and approval rates.
The disagreement were exacerbated by arguments that American customers were paying significantly more for the equivalent treatments than consumers in the other developed nations.
Recently, several major pharmaceutical investments in the UK have been delayed or cancelled, while substantial funding commitments have been directed toward US facilities.
A senior figure publicly accepted that the NHS needed to increase expenditure on drugs, noting that its expenditure on drugs had declined as a percentage of its resources over the past decade.
