Britain and America have agreed to a key trade agreement that will preserve zero import taxes on British medicine shipments being sold in the American market.
The Terms of the Deal
Under the terms of the agreement, the UK has agreed to increase spending on drugs through the National Health Service (NHS). This move secures that import taxes on these crucial goods will remain at nothing for a period of the next three years.
This deal follows previous warnings to hike import taxes on patented pharmaceutical imports, with potential rates floated up to one hundred percent.
"This deal between the Britain reinforces the international landscape for innovative medicines and introduces long-overdue fairness to American-British medicine commerce," a statement said.
Trade Impact
Medicines constitute one of the Britain's biggest exports to the United States, which is easily the biggest destination for large companies like GSK and AstraZeneca.
Export figures reveal that in the 12 months to the end of September, the UK shipped pharmaceutical products worth billions to the US. This figure accounted for 17.4% of British export trade in that period.
"This guarantee safeguards work, boosts investment and sets the stage for the UK to become a worldwide center for life sciences," a government official commented.
Detailed British Pledges
The pact entails several key pledges from the United Kingdom:
- Higher Cost Ceiling: The UK will increase the price threshold at which it deems new medicines to be too expensive by a quarter.
- Boosted Medicine Funding: There is a goal to raise total NHS spending on drugs from 0.3% of the national economy to 0.6 percent over the following ten-year period.
- Rebate Cap: The amount pharmaceutical firms must return to the NHS to stay within budget will be limited at 15%. Last year, refunds were more than 20%.
Recent Tensions
This agreement follows a ongoing row between the pharmaceutical industry and the British authorities over medicine costs and approval rates.
This friction were exacerbated by assertions that American customers were charged several times more for the identical medicines than consumers in the Britain and the EU.
Over the last 18 months, several significant manufacturing plans in the UK have been delayed or scrapped, while major expansions have been pledged toward projects in the United States.
One official stated that the NHS had to spend more on drugs, noting that its expenditure on drugs had declined as a percentage of its total funding over the last ten years.
