Britain and America have hammered out a landmark commercial pact that will ensure no levies on British medicine products entering the American market.
Agreement Details of the Accord
Under the terms of the agreement, the UK has committed to increase spending on pharmaceuticals through the National Health Service (NHS). This pledge guarantees that duties on these key exports will be held at zero for a timeframe of the next three years.
This development comes after recent threats to significantly raise duties on branded pharmaceutical imports, with figures floated as high as 100%.
"This agreement between the UK strengthens the worldwide climate for innovative medicines and brings long-overdue fairness to transatlantic drug exports," a release said.
Economic Significance
Drugs constitute one of the Britain's biggest export categories to the America, which is by far the largest buyer for large companies like GSK and AstraZeneca.
Trade data reveal that in the 12 months prior to September, the UK sold medicines worth billions to the US. This value made up 17.4% of all goods exports in that timeframe.
"This guarantee protects jobs, boosts investment and sets the stage for the UK to become a worldwide center for life sciences," a minister stated.
Key NHS Changes
The agreement entails several notable pledges from the United Kingdom:
- Revised Affordability Limit: The UK will lift the cost ceiling at which it judges new treatments to be unaffordable by a quarter.
- Boosted Medicine Funding: There is a aim to double total public funding on treatments from 0.3 percent of Gross Domestic Product to 0.6 percent over the following ten-year period.
- Refund Ceiling: The amount drug companies must refund to the NHS to prevent overspending will be capped at fifteen percent. Last year, rebates topped twenty percent.
Recent Tensions
The pact comes amid a protracted dispute between the drug companies and the British authorities over spending levels and NHS adoption.
The disagreement were heightened by claims that American consumers were charged a premium for the same drugs than people in the UK and Europe.
In recent months, several major drug company projects in the UK have been delayed or scrapped, while multi-billion-dollar funding commitments have been pledged toward US facilities.
The Science Minister acknowledged that the NHS had to increase expenditure on treatments, noting that its expenditure on drugs had shrunk as a proportion of its total funding over the past decade.
