UK officials announced Monday that Britain has secured a three-year commitment from the United States to apply a 0% tariff on all U.K. pharmaceutical exports, in exchange for the U.K. increasing its investment in new medications.
Under the arrangement, the U.S. will waive import duties on U.K.-made medicines, pharmaceutical components, and medical technologies.
According to the Trump administration, British drug companies have pledged to expand their investments in the U.S. and generate additional American jobs as part of the deal.
British authorities said the zero-tariff access for all U.K. pharmaceutical exports is the most favorable rate the U.S. has granted any trading partner. In return, the National Health Service will raise its spending on new and effective treatments by roughly 25%—its first major increase in over twenty years.
Officials noted that this boost in NHS investment should allow health regulators to approve medications that offer substantial clinical benefits but may have previously been rejected because of cost concerns, such as advanced cancer therapies or treatments for rare conditions.
“This crucial agreement will help ensure U.K. patients receive cutting-edge treatments sooner, while enabling our world-class companies to continue developing life-changing innovations,” said Science and Technology Secretary Liz Kendall.
The Association of the British Pharmaceutical Industry welcomed the pact, calling it “a significant step toward improving patient access to innovative medicines and raising broader NHS health outcomes.”
ABPI chief executive Richard Torbett added that the deal should further strengthen the U.K.’s ability to attract global life-sciences investment and advanced medical research.
U.S. Health Secretary Robert F. Kennedy Jr. said the agreement “enhances the global landscape for innovative medicines and brings long-needed balance to pharmaceutical trade between the U.S. and the U.K.”
The announcement follows recent decisions by companies such as AstraZeneca to scale back or delay investments in Britain. U.S. Ambassador Warren Stephens has cautioned that American companies may reduce future investment unless rapid reforms are made.
Earlier this year, President Donald Trump and U.K. Prime Minister Keir Starmer reached a preliminary framework for a broader trade deal that would cut U.S. tariffs on British autos, steel, and aluminum, while expanding U.S. access to the U.K. market for products such as beef and ethanol.