The UK has reached an agreement securing a zero-tariff rate on all medicine exports to the U.S. for a minimum of three years, officials revealed on Monday, in exchange for increased British spending on new drugs.
As part of the arrangement, the U.S. will waive import duties on pharmaceuticals, pharmaceutical ingredients, and medical technology originating from the UK.
In return, the Trump administration stated that British pharmaceutical companies pledged to boost investment in the U.S. and generate additional job opportunities.
The UK government stated that the 0% tariff on all its pharmaceutical exports is the lowest rate offered to any country. Under the agreement, the National Health Service (NHS) will increase spending on new and effective treatments by roughly 25%—its first major boost in over 20 years.
The agreement follows U.S. President Donald Trump’s threat to increase tariffs on branded drug imports—one of the UK’s largest exports to the U.S.—to as much as 100%.
Officials noted that the funding will allow UK health authorities to approve medicines that provide substantial health benefits but may have previously been rejected due to cost-effectiveness, including cancer therapies and treatments for rare diseases.
“This vital deal will ensure U.K. patients get the cutting-edge medicines they need sooner, and our world-leading UK firms keep developing the treatments that can change lives,” said UK Science and Technology Secretary Liz Kendall.
According to the Department for Business and Trade, the UK shipped £11.1 billion worth of medicines to the U.S. in the 12 months ending in September, representing 17.4% of total goods exports during that time.
Earlier this year, U.S. President Donald Trump and UK Prime Minister Keir Starmer reached a framework for a trade pact that would cut American import duties on British cars, steel, and aluminum in exchange for wider access to the UK market for U.S. goods such as beef and ethanol.
However, Pharmaceuticals were not part of the tariff cuts announced by Trump at that time.
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