U.S. to exempt UK pharmaceuticals and ingredients under trade deal

The United States government announced Monday that it will exempt pharmaceuticals, pharmaceutical ingredients, and medical‑technology products originating from the United Kingdom from current and future U.S. tariffs as part of a newly negotiated trade agreement in principle.

Under the accord, described by U.S. officials as the “Economic Prosperity Deal”, London committed to raising the net price paid by its national health service for new medicines by 25%. The agreement aims to rebalance long‑standing trade tensions over drug pricing while securing continued investment by U.K. pharmaceutical companies in the U.S. market.

As part of the deal:

The U.S. will waive import tariffs on UK‑origin pharmaceuticals and medical technology, including those imposed under Section 232 and will refrain from targeting UK drug‑pricing policies in future trade investigations.

The U.K. will increase what its public health system pays for new medicines and adjust its rebate and pricing schemes to align with American expectations, a move aimed at attracting investment and ensuring access to innovative treatments.

U.S. trade officials said the agreement strengthens supply chains, creates jobs in the life‑sciences sector, and reinforces America’s position as a global hub for pharmaceutical innovation. The British government, meanwhile, argued the higher drug prices were necessary to make the U.K. a more attractive market for pharmaceutical investment and to stabilize supply of new treatments.

The deal follows months of negotiations, prompted by earlier threats of substantial U.S. tariffs on imported drugs — and is viewed as a landmark step toward deeper economic cooperation between Washington and London.

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