Trump put the world on notice after scoring a huge deal for Americans
The president is known for his art of the deal. And he’s putting it to good use.
Because he put the world on notice after scoring a huge deal for Americans.
U.S.-UK Reach Pharmaceutical Trade and Pricing Agreement
The United States and United Kingdom announced a bilateral agreement Monday that eliminates U.S. tariffs on British pharmaceuticals and medical technology in exchange for higher UK payments for new U.S. medicines and reforms to Britain’s drug-pricing framework.
Key Terms of the Deal
Britain has committed to increase the net price paid for new U.S. medicines by 25 percent. In return, UK-origin medicines, active pharmaceutical ingredients, and medical technology will be exempt from existing Section 232 tariffs and any future Section 301 tariffs imposed on the UK.
The agreement also raises the cost-effectiveness threshold used by the National Institute for Health and Care Excellence (NICE) from £30,000 to £35,000 per quality-adjusted life year (QALY).
The revised threshold will apply to all new medicines evaluated by NICE, not only those from the United States, and will not affect pricing of drugs already on the market.
“The United States and the United Kingdom announce this negotiated outcome pricing for innovative pharmaceuticals, which will help drive investment and innovation in both countries,” U.S. Trade Representative Jamieson Greer said in a statement.
The UK government stated the NICE changes will allow its framework to “keep pace with the commercial and economic environment in which pharmaceutical companies are operating in today.”
Additionally, the voluntary rebate rate that pharmaceutical companies pay to the National Health Service is scheduled to fall to 15 percent in 2026.
Industry and Market Reaction
Bristol Myers Squibb CEO Chris Boerner said the commitments “mean BMS anticipates being able to invest upwards of $500 million over the next 5 years,” describing the agreement as one that “creates an environment conducive to our continued presence in the UK.”
GSK welcomed the deal, stating it provides “good foundations” to position the UK as “an attractive global-leading environment for life sciences that rewards long-term innovation.”
The Association of the British Pharmaceutical Industry (ABPI) said the agreement will improve patient access to new medicines and support investment in the sector.
The British Chambers of Commerce noted that pharmaceuticals account for one-fifth of the value of all UK exports to the United States, adding that the tariff exemption gives Britain “a distinct advantage” few other countries have secured.
Shares in London-listed drugmakers GSK and AstraZeneca showed little movement following the announcement. The UK represents approximately 2 percent of AstraZeneca’s global revenue.
