The NHS is set to pay more for medicines under a deal struck to avoid Donald Trump‘s tariffs on pharmaceutical exports.
Under the terms of the agreement, the UK will get a preferential tariff rate of 0 per cent for all medicines exported to the US for at least three years.
But, in return, the Government has agreed the NHS will increase the price it pays for new medicines by 25 per cent.
It is estimated this will see NHS spending on medicines rise from about 9.5 per cent of its budget to 12 per cent, in a move that will cost taxpayers about £3billion.
The agreement has been negotiated as part of the US-UK trade deal struck by Mr Trump and Prime Minister Sir Keir Starmer in May.
It also comes after big pharmaceutical companies ditched or paused bilions of pounds’ worth of planned UK investments so far this year.
The US President has called for changes that will level the playing field in terms of what American customers pay for drugs compared with those in the UK and Europe.
The Government said the deal would allow health officials to approve medicines that might previously been declined purely on cost-effectiveness grounds.
The NHS is set to pay more for medicines under a deal struck to avoid Donald Trump’s tariffs on pharmaceutical exports
It is estimated the agreement will see NHS spending on medicines rise from about 9.5 per cent of its budget to 12 per cent, in a move that will cost taxpayers about £3billion
Liz Kendall, the Science and Technology Secretary, said: ‘This vital deal will ensure UK patients get the cutting-edge medicines they need sooner, and our world-leading UK firms keep developing the treatments that can change lives.
‘It will also enable and incentivise life sciences companies to continue to invest and innovate right here in the UK.
‘This will support thousands of skilled jobs, boost our economy and ensure that the breakthroughs that happen in our labs turn into treatments that benefit families across the country.’
Peter Kyle, the Business and Trade Secretary, said: ‘This deal guarantees that UK pharmaceutical exports – worth at least £5 billion a year – will enter the US tariff free, protecting jobs, boosting investment and paving the way for the UK to become a global hub for life sciences.
‘We will continue to build on the UK-US Economic Prosperity Deal, and the record-breaking investments we secured during the US State Visit, to create jobs and raise living standards as part of our plan for change.’
Also responding to the deal, US health secretary Robert F. Kennedy, Jr. said: ‘Americans should not pay the world’s highest drug costs for medicines they helped fund.
‘This agreement with the UK strengthens the global environment for innovative medicines and brings long-overdue balance to US–UK pharmaceutical trade.
‘President Trump showed real courage and leadership in demanding these reforms, and I thank him for delivering results that put Americans first.’