UK and US Forge Zero-Tariff Agreement for Pharmaceuticals, Boosting Access and investment
A new trade agreement between the United Kingdom and the United States eliminates import taxes on UK-origin pharmaceuticals, pharmaceutical ingredients, and medical technology. The deal, announced recently, aims to improve patient access to cutting-edge medicines and encourage further investment in the UK’s life sciences sector.
Under the terms of the agreement, the US will apply a 0% tariff rate on all pharmaceuticals exported from the UK - a rate the UK government states is the lowest offered to any country. In return, UK drug firms have committed to increased investment and job creation within the US.
The UK government anticipates the deal will lead to approximately a 25% increase in spending by the National Health Service (NHS) on new and effective treatments,marking the first significant rise in such spending in over two decades. This increased funding is expected to allow UK health authorities to approve medicines demonstrating substantial health improvements, even if previously deemed too costly. This includes potential access to breakthrough cancer treatments and therapies for rare diseases.
“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,” stated Science and Technology secretary Liz Kendall.
The Association of the British Pharmaceutical Industry (ABPI) welcomed the agreement, calling it “an important step towards ensuring patients can access innovative medicines needed to improve wider NHS health outcomes.” ABPI chief executive Richard Torbett added that the deal “should also put the UK in a stronger position to attract and retain global life science investment and advanced medicinal research.”
US Health Secretary Robert F. Kennedy Jr. echoed this sentiment, stating the agreement “strengthens the global environment for innovative medicines and brings long-overdue balance to US-UK pharmaceutical trade.”
The agreement comes at a time when some pharmaceutical giants, including AstraZeneca, have recently paused or cancelled investments in the UK. US ambassador Warren Stephens recently cautioned that American businesses may curtail future investments unless “there are not changes made and fast.”
This pharmaceutical deal builds upon a broader framework for a trade pact agreed to earlier this year between President Donald Trump and British Prime Minister Keir Starmer. That framework outlined plans to reduce US import taxes on British cars, steel, and aluminum, in exchange for increased access to the British market for US products like beef and ethanol.