The United States and the United Kingdom have finalized a trade agreement that will result in the UK paying 25% more for new medicines. In exchange, pharmaceutical companies based in the UK will be exempt from tariffs on their imports into the US.
This agreement is part of President Donald Trump’s Most Favored Nation initiative, which aims to bring drug prices in line between the US and other developed countries where medicines are typically less expensive. The Office of the US Trade Representative announced the completion of this deal on Monday.
Under the terms, the UK’s National Health Service (NHS) will increase its net payment for new drugs by 25%. Additionally, the NHS will no longer require portfolio-wide concessions to offset costs for high-priced new medicines under schemes such as the Voluntary Scheme for Branded Medicines Pricing, Access and Growth or other rebate programs.
In return, UK-based pharmaceutical firms will not face US tariffs during Trump’s current presidential term. The US government also stated it would “work to ensure that U.K. citizens have access to the latest pharmaceutical breakthroughs,” but did not provide further specifics.
Earlier this year, a separate trade deal between the US and European Union introduced a 15% tariff on pharmaceutical imports but did not address drug pricing.
Industry observers note that ongoing discussions between pharmaceutical companies and various UK governments have failed to achieve market access conditions favorable to industry interests. This has contributed to reduced investment in Britain’s life sciences sector.
