{"id":174617,"date":"2025-12-04T11:41:14","date_gmt":"2025-12-04T11:41:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/174617\/"},"modified":"2025-12-04T11:41:14","modified_gmt":"2025-12-04T11:41:14","slug":"drugs-deal-is-a-tonic-for-a-vital-industry","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/174617\/","title":{"rendered":"Drugs deal is a tonic for a vital industry"},"content":{"rendered":"

\"President<\/p>\n

President Trump threatened tariffs on British drug exports to the US<\/p>\n

SHAWN THEW\/ALAMY<\/p>\n

The pharmaceuticals industry has been one of the stars of the British economy over the past few decades. With its combination of cutting-edge \u00adinnovation and high-end manufacturing, it is just the kind of business the government hopes to \u00adencourage. Yet in recent months it has faced an \u00adexistential threat as a result of a pricing system holding down the prices of drugs, plus the threat of punitive tariffs from the United States.<\/p>\n

In September Merck cancelled a \u00a31 billion \u00adresearch centre in London and AstraZeneca paused a \u00a3200 million investment in Cambridge. There have been fears that more investment would evaporate<\/a> if the government did not cut a deal with America. This week the government \u00adannounced it had done just that. The NHS will in future pay more for its drugs, but British-made pharmaceuticals will face zero tariffs for three years when \u00adexported to America. The industry\u2019s future isn\u2019t guaranteed, but the business would certainly have withered without this new deal.<\/p>\n

\u2022 Patients promised groundbreaking new drugs on NHS in deal with US<\/a><\/p>\n

Under the old pricing system, Britain spent \u00adunusually little on drugs. The NHS received a \u00adrebate from pharmaceutical companies of 23.5 per cent of its spending on drugs purchases last year. Rebate deals are common, but they are lower for most countries \u2014 7 per cent in Germany, for \u00adinstance, and 9 per cent in Ireland. The National Institute for Health and Care Excellence (Nice), which decides what drugs are worth buying and for how much, set the upper limit on the amount that should be spent to extend somebody\u2019s life by a year at \u00a320,000-\u00a330,000 in 1999. If the figure had risen in line with inflation it would be nearly twice that now. Britain\u2019s spending on cutting-edge \u00admedicine is low: about 0.3 per cent of GDP, \u00adcompared with 0.8 per cent in the US.<\/p>\n

Since Americans were getting a worse deal from US pharmaceutical companies than Britons, President Trump weighed in. He threatened to put 100 per cent tariffs on the \u00a36.6 billion of drugs which Britain exports to America if the government did not change its pricing system. His threats, along with those from the pharmaceutical companies, worked. Hence the new trade pact. Under it, the rebate will be capped at 15 per cent and Nice\u2019s upper limit will rise to \u00a325,000-\u00a335,000 for every year of life. This will apply to new \u00adtreatments, not to existing therapies or over-the-counter medicines.<\/p>\n

The share of GDP that Britain spends on new drugs is likely to double to 0.6 per cent. Britons will, as a result, get access to new drugs that in the past they would have had to do without. Less \u00adhappily, the NHS\u2019s spending on pharmaceuticals will rise by \u00a33 billion a year, from 9 per cent of its budget to 12.5 per cent. The government is not planning to increase spending on the health service to cope; the NHS will have to absorb the extra cost through efficiencies. That is as it should be. Spending on the NHS has risen from 5 to 8 per cent of GDP this century, and is projected to hit 9 per cent by 2030. It must be reined in.<\/p>\n

Critics claim that in doing this deal Sir Keir Starmer has caved to President Trump and big business rather than standing up for British taxpayers. That is nonsense. The UK could not expect to retain this crucial industry while imposing on it a pricing system that discouraged innovation and investment. This deal is a good one for Britons. They, and the country\u2019s pharmaceutical industry, will be healthier as a result.<\/p>\n","protected":false},"excerpt":{"rendered":"President Trump threatened tariffs on British drug exports to the US SHAWN THEW\/ALAMY The pharmaceuticals industry has been…\n","protected":false},"author":2,"featured_media":174618,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[103,61,60,371],"class_list":{"0":"post-174617","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-medication","8":"tag-health","9":"tag-ie","10":"tag-ireland","11":"tag-medication"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/174617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=174617"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/174617\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/174618"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=174617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=174617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=174617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}