Britain and the United States announced on Monday that they had reached an agreement to eliminate tariffs on UK pharmaceutical items exported to the United States. In exchange for Washington’s concession, the UK will lower drugmakers’ rebates to Britain’s National Health Service.
Under the existing approach, pharmaceutical companies return a percentage of revenue from branded medicine sales to the NHS, intended to prevent overspending. According to a statement from the United States Trade Representative (USTR), the UK will cap refunds at 15% by 2026, down from around 23% currently. The UK will boost the net price it pays for new drugs by 25%, according to the announcement.
The action comes after US President Donald Trump vowed to impose tariffs of up to 100% on branded or patented medications delivered to the US unless corporations built an American factory or production facility.
The potential proposed in September concerned large manufacturers. Pharmaceuticals remain one of the UK’s most important export sectors, with companies such as AstraZeneca and GSK contributing significantly.
As part of the new deal, the US stated that it will “refrain from targeting UK pharmaceutical pricing practices” in any future investigations into the sector for the duration of President Trump’s term.
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