The US and UK announced a pharmaceutical trade agreement Monday that exempts British-made drugs from all current and future US tariffs in exchange for the UK’s National Health Service increasing prices for new medicines by 25% – the first such rise in over two decades.
The deal, part of the broader US-UK Economic Prosperity Deal (EPD), secures tariff-free access for £6.6 billion in annual UK pharmaceutical exports to the US, protecting jobs and investment in the sector.
NHS pricing overhaul
Under the agreement, the NHS will double the percentage of GDP it allocates to innovative therapies from 0.3% to 0.6% over the next decade. The National Institute for Health and Care Excellence (NICE) will raise its cost-effectiveness threshold for “quality-adjusted life years” from £20,000–£30,000 per year to higher levels, allowing more expensive drugs.
The UK also commits to continued investment by pharmaceutical companies in the US, strengthening American manufacturing and development.
Trump’s long-standing complaint
President Donald Trump has repeatedly criticised wealthy nations like the UK for paying too little for medicines, forcing Americans to subsidise global costs. The White House launched a national security review of pharmaceutical imports in April 2025 and threatened 100% tariffs on branded drugs in September.
US Trade Representative Jamieson Greer hailed the deal as a “historic step” ensuring other developed countries “pay their fair share”.
UK industry welcomes relief
British pharma giants like GSK and AstraZeneca, which paused investments due to pricing disputes, praised the agreement. GSK CEO Chris Boerner called it a “sign of progress” that secures the UK as a global life sciences hub.
“This vital agreement will let UK patients access cutting-edge medicines faster and ensure our world-leading life-sciences companies keep developing life-changing treatments. It also gives firms strong incentives to continue investing and innovating right here in the United Kingdom.”
The UK government confirmed it will raise NHS spending on innovative, safe and effective therapies by around 25% under the agreement.
Featured photo: SkyNews
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