Britain and America have signed a landmark commercial pact that will keep no import taxes on UK drug exports being sold in the US market.
The Terms of the Deal
Under the terms of the agreement, the UK has agreed to boost spending on drugs through the NHS. This move secures that import taxes on these key products will be held at zero for a timeframe of three years.
This deal comes after previous warnings to significantly raise import taxes on patented pharmaceutical products, with potential rates mentioned up to 100%.
"This deal between the United Kingdom strengthens the global environment for new treatments and brings much-needed fairness to transatlantic pharmaceutical trade," a statement said.
Commercial Importance
Pharmaceuticals are one of the Britain's biggest export categories to the America, which is easily the biggest destination for major UK drugmakers.
Export figures reveal that in the year prior to last September, the UK exported medicines valued at over eleven billion pounds to the US. This value made up nearly one-fifth of all goods exports in that period.
"This guarantee secures work, increases capital expenditure and facilitates the UK to become a worldwide center for medical research," a minister remarked.
Detailed NHS Changes
The pact includes several specific commitments from the British government:
- Revised Affordability Limit: The UK will lift the price threshold at which it judges new medicines to be prohibitively costly by twenty-five percent.
- Boosted Medicine Funding: There is a goal to increase overall NHS spending on drugs from 0.3 percent of GDP to 0.6% over the following ten-year period.
- Refund Ceiling: The amount manufacturers must refund to the NHS to prevent overspending will be restricted at 15%. Previously, rebates exceeded 20%.
Recent Tensions
The pact comes amid a long-running dispute between the drug companies and the British authorities over drug pricing and approval rates.
This friction were exacerbated by claims that US consumers were charged several times more for the same drugs than consumers in the Britain and the EU.
Over the last 18 months, several major pharmaceutical investments in the UK have been delayed or cancelled, while substantial funding commitments have been pledged toward projects in the United States.
One official publicly accepted that the NHS had to invest a greater share on treatments, noting that its spending on drugs had declined as a proportion of its overall budget over the previous ten-year period.
