The UK and US have reached agreement that means UK companies will continue to not pay tariffs on pharmaceuticals imported into the US.
The deal means the UK must pay more for medicines through the NHS in return for zero import taxes in the US on pharmaceuticals made in the UK for three years.
As part of his introduction of tariffs for countries around the world, president Donald Trump has threatened to introduce a 100% levy on imported drugs.
Pharmaceuticals is one of the UK’s biggest exports, making up a fifth of all UK exports to the US by value.
Science and technology secretary, Liz Kendall said:
“This vital deal will ensure UK patients get the cutting-edge medicines they need sooner, and our world-leading UK firms keep developing the treatments that can change lives.
“It will also enable and incentivise life sciences companies to continue to invest and innovate right here in the UK.
“This will support thousands of skilled jobs, boost our economy and ensure that the breakthroughs that happen in our labs turn into treatments that benefit families across the country.”
The agreement is part of the UK-US Economic Prosperity Deal first announced in May, and sees the UK become the only country in the world to secure a zero percent tariff on pharmaceuticals to the US.
William Bain, head of trade policy at the British Chambers of Commerce, said:
“The original trade deal promised preferential outcomes on pharmaceuticals tariffs for the UK. We are pleased to see this has now been delivered, with the confirmation that these exports to the US will be tariff free.
“Pharmaceuticals make up a fifth of all UK exports to the US by value, and the UK now has a deal which few others have achieved, giving us a distinct advantage.
“This deal is a real win. It will promote exports, boost investment, and enhance UK competitiveness as a production and innovation base for world–leading medicines and treatments.”