1 hour agoShareSaveSimon Jack,Business editor,Nick Triggle,Health correspondentandRachel Clun,Business reporterShareSaveAFP via Getty ImagesThe UK and the US have agreed a deal to keep tariffs on UK pharmaceutical shipments into America at zero.Under the agreement the UK will pay more for medicines through the NHS in return for a guarantee that US import taxes on pharmaceuticals made in the UK will remain at zero for three years.This is the first time the amount that the NHS pays for medicines is due to increase in more than 20 years.The deal comes after US President Donald Trump threatened to raise tariffs to as high as 100% on branded drug imports, one of the UK’s biggest exports to the US.Business and Trade Secretary Peter Kyle said the deal “guarantees that UK pharmaceutical exports – worth at least £5bn a year – will enter the US tariff free, protecting jobs, boosting investment and paving the way for the UK to become a global hub for life sciences.”The UK exported £11.1bn worth of medicines to the US in the 12 months to the end of September, making up 17.4% of all goods exports in that period, according to the Department for Business and Trade.Pharmaceuticals were not included in the wave of tariffs US President Donald Trump had announced earlier this year. But he has repeatedly threatened to raise tariffs on medicines, citing concerns about America’s reliance on medicines made overseas and a desire to increase manufacturing in the US. He has also argued that US consumers effectively subsidise medicines for other developed countries by paying premium prices for those drugs and pushed for other countries to pay more. Under the terms set out on Monday, the UK will increase the price threshold, at which it deems new treatments to be too expensive, by 25%.The UK will also increase the overall amount the NHS spends on medicines, with a target to increase that spending from 0.3% of GDP to 0.6% of GDP over the next 10 years.The amount drug companies must pay back to the NHS to ensure the health system does not overspend its allocated budget will be capped at 15% – last year, drug companies had to pay back more than 20%.In exchange, UK medicine exports will be protected from tariff increases for the next three years.White House spokesman Kush Desai said the agreement with the UK was a “historic step towards ensuring that other developed countries finally pay their fair share”.Getty ImagesThe pressure from the US had intensified a long-running row in the UK between the government and the pharmaceuticals industry over drug approvals and the cost of medicines to the NHS.Health Secretary Wes Streeting said in August that he was not prepared to let drug companies “rip off” the UK, after talks between the government and pharmaceutical firms over the cost of medicines broke down.But subsequently Science Minister Sir Patrick Vallance told the BBC he accepted that the NHS needed to spend more on medicines after seeing its spending on drugs shrink as a percentage of its budget over the last 10 years.The NHS advisory body NICE said the changes were likely to lead to an extra three to five medicines a year being approved – currently it assesses around 70 a year and approves 90% of them.It is not clear what this will cost the NHS – drugs currently account for around 10% of the health budget.But Sally Gainsbury, of the Nuffield Trust think tank, said the agreement could lead to an extra £3 billion being spent on drugs, which was “bad news” given how stretched budgets were.”The extra cost will need to be fully-funded by the Treasury,” she said, adding that it would be better to invest extra money into areas such as GP services or tackling the hospital backlog instead of new drugs.In announcing the new agreement, the UK government said it was the only country in the world to have secured a zero percent tariff rate for pharmaceutical shipments.European officials have previously said they believed their drugs exports would be protected by terms agreed over the summer, which would c …
