UK-US pharma deal ‘damage limitation’ says former ambassador

The UK-US pharmaceutical deal is a ‘good piece of damage limitation’ but still means spending more on medicines, a former ambassador to the US has said.

Speaking at the Association of the British Pharmaceutical Industry (ABPI) conference in London on Thursday Lord Kim Darroch said the deal – agreed in December– was ‘not fantastic’ but was better than paying 100% tariffs on pharmaceuticals.

He said: ‘We did a deal. We were very smart to do a deal, and it’s quite a good deal although it still means we pay more tariffs on pharmaceuticals from America than we were.

‘We promised to up our spending on medicines by 100% over the next 10 years, so it’s not fantastic. But we’re a lot better off with this deal than we would have been with 100% tariffs, so it’s damage limitation for us. It’s a very good piece of damage limitation – I applaud those who did it.’

The deal agreed with the US secured a 0% tariff on all pharmaceutical exports to the US for at least three years as well as ‘preferential terms’ for the UK’s med tech exports, meaning there will be no additional tariffs on medical tech.

New details about the deal, published on 2 April by the Department of Health and Social Care (DHSC), also revealed plans to double spending on innovative medicines from 0.3% of GDP to 0.6% by 2036.

This will be done gradually with the government aiming to spend at least 0.35% of its GDP on new medicines by the end of 2028; at least 0.4% by the end of 2030; and at least 0.6% by the end of 2036.

It also plans to increase the share of the NHS budget spent on medicines from 10% to 12% over the next decade, with raising the National Institute for Health and Care Excellence (NICE) cost-effectiveness threshold to £25,000-£35,000 expected to accelerate this change.

Lord Darroch said US president Donald Trump’s ‘obsession with pharmaceuticals’ had been apparent since his 2016 campaign trail, during which he spoke about American consumers having to pay much more for medicines than UK or European consumers.

He added: ‘Trump can proclaim this to American industry and to his followers as another example of the great deals that he does.’

Lord Darrach also said he thought tariffs were ‘here to stay’ and told pharmaceutical industry representatives they would need to ‘learn to live with them’ and do what they could to mitigate their impact.

In February, science minister Lord Vallance said in a letter to Dame Chi Onwurah, the chair of the science, innovation and technology (DSIT) committee, that the pharmaceuticals deal would be funded through ‘allocations made to DHSC’ at the spending review.

He stressed that frontline services would remain protected, but Dame Onwurah told The Pharmacist she remained sceptical.

She said she supported the objectives of the deal but needed to know more of the detail – in particular, the cost to the NHS and who is going to pay that cost.

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