Britain’s publicly funded National Health Service (NHS) is set to pay 25% more for innovative medicines in exchange for zero tariffs on pharmaceutical exports to the US as part of a new deal under Donald Trump’s administration that was finalized on Monday 1
According to a report in The Guardian, industry sources estimate this could cost around £3 billion in higher drug spending over the next three years. But they also noted that the deal could increase the proportion of the NHS budget spent on medicines for diseases such as breast cancer, asthma and motor neurone disease where innovation is key.
In return, the UK will be exempt from heavy US tariffs on pharmaceutical imports, which came into force on 1 October. It is the only country to reach such an agreement, as the European Union and Switzerland continue to face pharmaceutical tariffs totaling 15%.
The US-UK zero-tariff pharmaceutical agreement: Key points
Here’s a quick look at the key points of the deal:
- Higher prices for treatment in the US: The National Health Service (NHS) will increase its prices for new treatments in the US by 25%.
- Zero tariffs: Britain is now the only country exempt from major tariffs, which came into force on 1 October. Medicines, drug components and medical technology made in the UK will be exempt from Section 232 sector tariffs and any future Section 301 country tariffs. Prior to Monday’s announcement, the Trump administration had announced 100 percent tariffs on brand-name drugs.
- NICE Threshold Increase: The National Institute for Health and Care Excellence (NICE), the body that sets guidelines for spending on new medicines, currently approves around 70 new medicines a year. Under the deal, the UK body’s “quality-adjusted life year” threshold, currently £30,000 ($39,789) a year, will rise to £25,000 to £35,000 ($46,239) a year, expanding the range of drugs the NHS can prescribe.
- Tariff delays for AstraZeneca: The White House also delayed tariffs for three years on Monday with Pfizer and British group AstraZeneca after both agreed to invest in US manufacturing capacity.
The agreement aims to “resolve the long-standing imbalance in pharmaceutical trade between the US and the UK” and end what US trade ambassador Jamieson Greer called arrangements where “US patients have been forced to subsidize prescription drugs and biologics in other developed countries,” AFP reported.
What does the deal mean for UK patients?
UK Science and Technology Secretary Liz Kendall said the US-UK pharmaceuticals deal would ensure British patients get access to medicines faster. The deal “ensures UK patients get the cutting-edge medicines they need sooner” while allowing “life sciences companies to continue investing and innovating right here in the UK,” reports quoted Kendall news agency as saying.
