The UK has become the first country to clinch a deal to avoid US tariffs on drug exports as fears mount that Donald Trump will clobber countries with steep levies on medicines.
Ministers announced yesterday that British pharmaceuticals exported to the US, worth around £5billion annually, will not be subject to tariffs for at least three years.
The Government said it would also reduce the level of a rebate pharma firms pay on branded medicines sold to the NHS to 15 per cent, from 23 per cent, until the end of 2028 in a concession to the industry.
Drug manufacturers have long complained that the clawback discourages investment in Britain.
‘Thanks to this partnership, patients right across the NHS will benefit from access to life-changing new medicines that they previously would have been denied,’ said Science Minister Lord Vallance.
‘As the first country in the world to benefit from a zero per cent tariff on pharmaceuticals to the US, Britain’s life sciences sector will be further boosted.’
Tariff deal: British pharmaceuticals exported to the US, worth around £5bn annually, will not be subject to tariffs for at least three years
Meanwhile, the Government also said it would double the amount spent on new medicines over the next decade to boost the number of cutting-edge drugs available to NHS patients.
The deal solidifies an agreement struck between the US and the UK in December after Trump threatened to impose tariffs on drug imports to force companies to make more medicines in America.
‘We are pleased that the partnership between the UK and US on pharmaceuticals has been finalised.
It provides certainty on zero-tariffs for medicines and offers real improvements to the UK operating environment, and rewards for innovation,’ said FTSE 100 pharma giant GSK.
Dave Ricks, boss of US drugs firm Eli Lilly, whose medicines include weight-loss drug Mounjaro, said the deal was ‘encouraging’ and it would ‘revisit’ investment plans for the UK.
It comes after the US giant this week pushed for regular price rises on NHS drugs in return for resuming investment in Britain after it paused plans for a biotech laboratory last year.
The deal will provide UK drugmakers with a reprieve from US tariffs on medicines, which are reported to be as high as 100 per cent, and are set to be announced.
Pharma firms may be able to reduce or lower the levies if they shift factories to the US or negotiate bespoke deals with the Trump administration, according to CNBC.
Companies that have already struck deals to invest more in the US and cut their prices include the UK’s AstraZeneca and Danish group Novo Nordisk, the maker of fat jab Ozempic.
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