Britain and America have concluded a key bilateral deal that will preserve no import taxes on British drug products going into the US market.
Key Provisions of the Pact
Under the terms of the agreement, the UK has committed to raise funding on medicines through the public health system. This pledge secures that duties on these crucial products will stay at nothing for a duration of three years.
This development is in response to previous warnings to hike import taxes on branded drug products, with figures floated up to double the cost.
"This agreement between the UK bolsters the international landscape for innovative medicines and introduces long-overdue balance to U.S.–U.K. medicine commerce," a statement noted.
Economic Importance
Medicines represent one of the the United Kingdom's largest goods shipped to the United States, which is clearly the largest buyer for large UK drugmakers.
Export figures indicate that in the year to the end of September, the UK exported drugs valued at billions to the US. This value made up 17.4% of total UK exports in that period.
"This guarantee safeguards employment, boosts investment and facilitates the UK to emerge as a global hub for medical research," the Business and Trade Secretary commented.
Detailed British Pledges
The pact involves several key pledges from the UK:
- Price Threshold Increase: The UK will increase the affordability limit at which it deems new medicines to be unaffordable by 25%.
- Boosted Medicine Funding: There is a target to double overall health service expenditure on drugs from 0.3% of Gross Domestic Product to 0.6% over the coming ten years.
- Rebate Cap: The percentage pharmaceutical firms must pay back to the NHS to prevent overspending will be capped at fifteen percent. In the past, refunds topped 20%.
Industry Background
This agreement takes place against a ongoing dispute between the drug companies and the British authorities over medicine costs and NHS adoption.
The disagreement were heightened by assertions that American 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 drug company projects in the UK have been halted or cancelled, while multi-billion-dollar expansions have been pledged toward American operations.
One official publicly accepted that the NHS had to spend more on medicines, noting that its expenditure on drugs had declined as a proportion of its total funding over the previous ten-year period.
