UK–US Pharma Deal Includes Tariff Cuts and Pricing Adjustments Amidst Sector Tensions
A new UK–US drug pricing and tariffs agreement has been reached that features three years of zero tariffs on UK exports to the US, a 15% cap on price rebates, and a 25% increase in baseline price thresholds by NICE at the lower end. The deal is characterized as welcome but not transformative, aiming to prevent US–UK tensions and maintain UK pharmaceutical investment while recognizing the US's dominant position in the sector.
GSK's CEO Emma Walmsley highlighted the US as the leading market for launching new drugs and vaccines, noting that GSK invests about three times more in the US than in the UK. However, the article points to ongoing tensions regarding NHS pricing policies, referencing Merck's cancellation of a £1bn London research centre as an example of investment risks linked to pricing rules. The current voluntary pricing scheme exhibits volatility, with rebates accounting for approximately 23% of sales.
The deal links price terms to initiatives supporting UK innovation, including a goal to increase spending on new medicines to 0.6% of GDP within ten years and negotiating a post-2029 voluntary pricing scheme. Furthermore, a £600m Health Data Research Service is planned to enhance researchers' access to NHS data as part of a broader life sciences strategy.
Despite these measures, the US is expected to maintain its lead in drug spending, research capabilities, manufacturing infrastructure, and startup funding, preserving its dominant position in the pharmaceutical sector.
