An agreement in principle reached between UK and US trade negotiators will have the latter’s National Health Service pay 25% higher list prices for new prescription drugs in exchange for the US government not levying tariffs on drugs, pharmaceutical ingredients, or medical technology imported from the UK.
The Office of the US Trade Representative added that the UK will ensure that these higher prices are not undermined by demands for portfolio-wide concessions through the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) or other rebate programs. The USTR added that the UK had agreed that the repayment rate due from companies under the current VPAG program will decline to 15% next year and stay at or below that level.
“When nations fairly share the burden of producing and paying for life-saving medicines, every citizen gains, and the fight against global disease becomes one we can actually win together,” Deputy CMS Administrator Chris Klomp, a lead agreement negotiator, said in a statement.
The deal comes following President Trump’s “Most Favored Nation” drug policy to lower the prices of prescription drugs in the US by bringing them in line with those paid in other countries.
Already, several major drugmakers have made deals to lower the prices of some of their drugs in the US, including Pfizer (PFE), Eli Lilly (LLY), and Novo Nordisk (NVO).
UK-based drugmakers AstraZeneca (AZN) and GlaxoSmithKline (GSK) are trading flat in Monday morning trading.