Auto Amazon Links: No products found. Blocked by captcha.
The United Kingdom and the United States have reached an agreement that maintains zero tariffs on UK pharmaceutical exports entering the US market. As part of this deal, the NHS in the UK will see an increase in the amount it spends on medicines, marking the first such rise in over two decades. This agreement guarantees that tariffs on British-made pharmaceuticals will remain at zero for a period of three years, offering stability to a sector that represents a significant portion of UK exports to the US.
This development follows previous threats by former US President Donald Trump to impose tariff rates as high as 100% on branded drug imports from the UK, which is one of the UK’s largest export sectors to the US. Peter Kyle, the UK’s Business and Trade Secretary, emphasized that the deal protects pharmaceutical exports worth around £5 billion annually, helping safeguard jobs and encouraging investment. According to the UK’s Department for Business and Trade, medicine shipments to the US totaled £11.1 billion in the year leading up to September, accounting for nearly 17.4% of all goods exports during that period.
Despite pharmaceuticals being excluded from earlier rounds of US tariffs announced by Trump, concerns about America’s dependence on overseas drug manufacturing and calls for other countries to contribute more fairly to drug costs led to these tariff threats. To address this, the UK has agreed to increase the price threshold for new treatments viewed as too costly by 25%, and aims to double NHS spending on medicines from 0.3% of GDP to 0.6% over the next decade. The repayment cap for drug companies to shield the NHS budget from overspending will be lowered to 15%, down from over 20% last year, in exchange for the tariff protection.
The deal has come amid domestic tensions within the UK between the government and pharmaceutical companies regarding drug pricing and approvals. Health Secretary Wes Streeting had previously expressed a firm stance against drug companies overcharging the NHS, but Science Minister Sir Patrick Vallance later acknowledged that the NHS must spend more on medicines. The UK’s advisory body, NICE, expects the changes to result in the approval of three to five additional medicines annually, though the precise cost implications remain unclear. Observers like Sally Gainsbury from the Nuffield Trust worry that increased spending on drugs—potentially £3 billion more—could strain already stretched NHS resources, suggesting the Treasury will need to secure corresponding funding.
The UK government highlighted that this agreement makes it unique globally in securing a zero percent tariff rate on pharmaceutical imports into the US. European officials had anticipated tariffs capped at 15%, but the UK’s arrangement goes further. This comes after a period of investment uncertainty in the UK’s pharmaceutical sector, with some firms like GSK announcing significant investments in the US and others such as Merck and AstraZeneca pausing or cancelling planned expansions in the UK. Business groups and industry leaders, including William Bain from the British Chambers of Commerce and Bristol Myers Squibb’s CEO Chris Boerner, have praised the agreement for promoting investment and maintaining the UK’s standing in the pharmaceutical industry.
Earlier this year, the White House initiated a formal probe into pharmaceutical imports on national security grounds, escalating the situation. Although Trump threatened massive tariffs on branded drugs in a social media post, these plans were not implemented as negotiations continued. US Health Secretary Robert Kennedy Jr described the agreement as a way to ensure Americans do not pay the world’s highest drug prices for medicines partially funded by US sources, stating it would help rebalance US-UK pharmaceutical trade and encourage innovation globally
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.