The United Kingdom has finalized a pharmaceutical trade agreement with the United States that provides duty-free access to the U.S. market for drugs manufactured in the UK. In exchange, higher prices will be paid for new American drugs. This agreement is part of a larger trade deal between the two countries and will last for at least three years. The UK government has stated that this agreement will make the UK the only country with duty-free access to the American drug market.
The British Minister of Business and Trade, Peter Kyle, believes that this partnership will support the UK’s pharmaceutical industry and protect highly skilled jobs. Pharmaceutical products account for about one-fifth of British exports to the US in terms of value.
This agreement will involve changes to the evaluation framework of the National Institute for Health and Care Excellence (NICE) in the UK, affecting the cost-effectiveness of drugs in the National Health Service. In December, it was announced that this partnership would result in a 25% increase in net prices for some new American drugs.
The UK also mentioned that the deal will protect medical technology exports from additional tariffs and ensure that the UK benefits from mitigation measures under the US drug pricing policy. The pharmaceutical provisions were negotiated separately from the broader trade deal signed by President Donald Trump and Prime Minister Keir Starmer in June 2025.
The agreement aims to enhance cooperation between UK and US regulatory agencies, aligning regulations to facilitate patient access to new technologies. The UK and US have agreed that there will be zero tariffs on British pharmaceuticals and medical technologies in exchange for changes in drug pricing and evaluation practices.
AstraZeneca and GSK, British pharmaceutical companies, reached agreements last year with the Trump administration on most favored nation drug pricing to avoid potential US tariffs on pharmaceutical products. GSK welcomed the finalization of the agreement, stating that it provides certainty on zero tariffs for drugs and improves the UK’s operational environment while supporting innovation. They emphasized the need to work quickly on detailed measures for implementing the improvements.
