The government has finally signed a tariff-free pharmaceutical deal with the US, but new medicines will be more expensive, and it will cost British taxpayers £3 billion a year.

As part of the US-UK pharmaceutical partnership, UK pharmaceutical exports to the US will enter the US completely tariff-free, for at least three years. This makes the UK the first country in the world to secure 0% tariffs on pharmaceutical exports to the US.

The government claims that the partnership also accelerates NHS patients’ access to new medicines. Under the deal, it says that pharmaceutical companies have stronger incentives to launch innovative treatments in the UK, meaning patients can benefit from new cancer therapies, rare disease treatments, and other breakthrough medicines sooner.

At the same time, the UK has also secured preferential terms for medical technology.

The Medicines and Healthcare products Regulatory Agency (MHRA) is finalising its collaboration with the US Food and Drug Administration (FDA) to support faster access to safe and innovative medical technologies in the future for patients in both countries.

The MHRA and FDA have said that they intend to work closely on options to improve and align regulations for medical devices. This includes exploring future mutual recognition mechanisms (ways to recognise parts of the individual approval processes), reducing duplication for manufacturers and streamlining approval processes to help patients access new medical technologies sooner.

Both regulators have emphasised that their work will remain independent and will ensure strict safety standards are maintained.

“This marks an exciting moment for UK innovation. By strengthening our working relationship with the FDA, we are allowing cutting-edge medical technologies to reach patients faster and more efficiently than ever before,” said MHRA chief executive Lawrence Tallon. “This is exactly the kind of partnership that enables the UK to stay at the forefront of global life sciences,” he added.

Profiteering corporations

The news was welcomed by the industry. Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry, called it a “landmark partnership”; Dave Ricks, chair and chief executive of Eli Lilly and Company, said it was an “encouraging move”; and Peter Ellingworth, chief executive of the Association of British HealthTech Industries, called it a “positive step towards reducing regulatory duplication”.

But there is no getting away from the cost to the British taxpayer of caving in to US president Donald Trump’s demands.

The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) headline payment percentage – the rebate pharmaceutical companies pay on branded medicines sold to the NHS – will be capped at a maximum of 15% until the end of the current scheme, which expires at the very end of 2028.

As Healthcare Today has noted before, it is a move that will see the UK pay 25% more for new medicines and cost the NHS and British taxpayers an additional £3 billion a year.

Campaigning organisation Global Justice Now is vocal about what a bad deal it is.

“This deal doesn’t guarantee patients will get access to many new medicines – but it does guarantee the NHS will pay more for the medicines we do get access to,” said policy and campaigns manager Tim Bierley.

“If the government truly cared about patient access to medicines, it would tackle the profiteering corporations that hold us to ransom. Not simply hand over more money to them.”