Britain and America have signed a major bilateral deal that will keep zero import taxes on British medicine shipments going into the US market.
The Terms of the Deal
As part of the deal, the UK has committed to increase spending on medicines through the NHS. This move secures that duties on these crucial products will remain at zero for a timeframe of 36 months.
This deal is in response to earlier statements to significantly raise duties on branded drug products, with potential rates floated reaching one hundred percent.
"This arrangement between the UK bolsters the worldwide climate for new treatments and introduces long-overdue equity to transatlantic medicine commerce," an announcement said.
Economic Significance
Pharmaceuticals are one of the UK's largest goods shipped to the America, which is clearly the biggest destination for leading UK drugmakers.
Statistics reveal that in the 12 months leading up to last September, the UK shipped drugs worth £11.1bn to the US. This amount represented 17.4% of all goods exports in that period.
"This deal secures jobs, increases funding and sets the stage for the UK to become a global hub for biotech and pharma," the Business and Trade Secretary commented.
Key British Pledges
The agreement involves several specific pledges from the UK:
- Revised Affordability Limit: The UK will increase the affordability limit at which it judges new medicines to be unaffordable by a quarter.
- Boosted Medicine Funding: There is a goal to raise overall NHS spending on treatments from 0.3 percent of the national economy to 0.6% over the following ten-year period.
- Rebate Cap: The sum drug companies must pay back to the NHS to prevent overspending will be limited at fifteen percent. In the past, repayments topped twenty percent.
Recent Tensions
The pact comes amid a ongoing dispute between the sector and the ministers over drug pricing and regulatory access.
The disagreement were intensified by arguments that American patients were paying several times more for the same drugs than people in the other developed nations.
Recently, several major drug company projects in the UK have been halted or cancelled, while major funding commitments have been pledged toward US facilities.
One official acknowledged that the NHS needed to invest a greater share on drugs, noting that its spending on drugs had shrunk as a proportion of its resources over the previous ten-year period.
