UK and US Forge Groundbreaking Pharmaceutical Agreement
The United Kingdom and the United States have formalised a significant agreement, eliminating tariffs on pharmaceutical products imported from the UK and committing to increased investment in NHS medications.
This agreement marks the UK as the latest beneficiary in President Donald Trump’s extensive trade initiatives, being the first region to obtain a zero-tariff arrangement for pharmaceutical imports to the US. UK Science Minister Professor Patrick Vallance hailed it as a “landmark deal.”
According to a joint announcement from the Office of the United States Trade Representative, the Department of Commerce, and the Department of Health and Human Services, the US government will not impose tariffs on UK-origin pharmaceutical products, nor will it challenge the pricing practices of UK pharmaceuticals. This exemption is set to last for three years.
In return for this concession, the UK has agreed to a net price increase of 25% for new medicines available on the NHS. Furthermore, the agreement will introduce modifications to the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), which has faced criticism for obstructing access to innovative therapies in the UK.
The announcement affirms that the UK will ensure that enhancements in prices for new medicines will not be significantly undermined by demands for portfolio-wide concessions under VPAG.
Additionally, the UK government indicated that the deal would enable the NHS watchdog, the National Institute for Health and Care Excellence (NICE), to approve previously rejected medicines based on cost-effectiveness considerations.
Liz Kendall, the UK’s Science and Technology Secretary, expressed optimism about the enhanced access to cutting-edge medicines and the potential for job creation within the country.
Health and Human Services Secretary Robert F. Kennedy Jr. described the agreement as establishing a “long overdue balance” in trade relationships.
In a striking contrast, just last July, the European Union had negotiated a 15% tariff rate on pharmaceutical products exported to the US as part of a new trade arrangement.
Agreement Alleviates Concerns in the Pharmaceutical Sector
Janet Beal, GlobalData’s managing analyst for health economics and market access in Europe/CIS, remarked, “Addressing the persistent challenges associated with the UK’s VPAG cost-containment scheme for branded drugs, increasing NHS expenditure on medicines, and relaxing NICE’s cost-effectiveness criteria can significantly benefit the UK’s pharmaceutical sector by fostering a more favourable trading environment.”
Beal noted that these developments could catalyse a revitalisation of the UK’s position as a priority launch market and stimulate a return of pharmaceutical research and development investment to the UK, following a challenging period.
The unease surrounding the UK’s life sciences industry has escalated amid dismal commercial forecasts; for example, MSD recently abandoned a £1 billion expansion plan in London, exacerbating tensions between large pharmaceutical firms and the government.
Following the agreement, Bristol Myers Squibb (BMS) CEO Chris Boerner highlighted that, given the UK’s commitments and the increased investment in innovative medicines supported by this deal, BMS anticipates investing upwards of $500 million over the next five years.
Richard Torbett, CEO of the Association of the British Pharmaceutical Industry (ABPI), asserted that this deal represents a crucial step toward guaranteeing patient access to innovative medicines necessary for enhancing overall NHS health outcomes.
He further stated, “It should position the UK more favorably to attract and retain global life science investment and advanced medicinal research.”
“These commitments begin to address industry concerns regarding NHS access to medicines and the UK’s historically high and unpredictable payment rate,” Torbett concluded.
Source link: Pharmaceutical-technology.com.
