The United Kingdom and the United States have reached a historic agreement to eliminate tariffs on UK-made medicines, pharmaceutical ingredients, and medical technology exported to the US for at least three years. The deal is part of the broader UK–US Economic Prosperity Deal and represents the first time the UK has secured such favourable terms for its life sciences sector on a global scale.
Under the agreement, the UK will increase spending on innovative medicines by around 25%, aiming to reverse decades of constrained drug budgets. This includes raising the cost-effectiveness threshold used by the National Institute for Health and Care Excellence (NICE) from £20,000–£30,000 per quality-adjusted life year (QALY) to a new range of £25,000–£35,000 per QALY. The move is expected to allow quicker access to advanced treatments, including rare disease drugs and cutting-edge cancer therapies, benefiting tens of thousands of patients.
For the pharmaceutical industry, the zero-tariff deal is anticipated to boost UK exports to the US and attract investment into domestic manufacturing and research. Analysts suggest it strengthens the UK’s position as a global life sciences hub and may support long-term job creation in the sector.
However, critics have raised concerns that the increased medicine spending—potentially up to £3 billion annually—could strain the wider NHS budget if not managed alongside other healthcare priorities. The deal aligns with the UK government’s broader industrial strategy to accelerate clinical trials, leverage NHS data for research, and promote growth in the life sciences sector.
The agreement marks a significant step in UK-US trade relations, combining patient access, industry growth, and strengthened bilateral economic ties, though its long-term impact will depend on how the NHS balances higher drug costs with overall healthcare funding.
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