US, UK Reach In-Principle Agreement On Zero-Tariffs On Pharmaceuticals

• As part of the agreement, the U.K. government will lift the threshold used by the NHS to determine if a drug is cost-effective by 25%.
• It has also agreed to a reduction in the industry sales rebate on NHS drug prices to 15% in 2026 from the nearly 23% currently.

The United States and the United Kingdom have reached an in-principle agreement on a zero-tariff deal on pharmaceuticals.

According to the agreement’s details announced by the Office of the United States Trade Representative, the deal will result in zero tariffs on pharmaceutical products imported in the U.S. from the U.K. It will also lead to an increase in the U.K. government’s spending on the National Health Service (NHS).

The agreement between the U.S. and U.K. on pharmaceutical pricing will remain in effect until the end of President Donald Trump’s term in 2029.

In exchange, the U.K. government has agreed to a reduction in the industry sales rebate on NHS drug prices to 15% in 2026 from the nearly 23% currently, and remain at that level or below until 2029.

AstraZeneca Plc.’s (AZN) shares were flat in Monday’s opening trade. Retail sentiment around the company trended in the ‘bullish’ territory at the time of writing. AstraZeneca is the U.K.’s largest pharmaceutical company.

Increase In NHS Spending

As part of the agreement, the U.K. government will also lift the threshold used by the NHS to determine if a drug is cost-effective by 25%.

“Today’s agreement is a major win for American workers and our innovation economy. We are strengthening supply chains, creating high-quality jobs, and reinforcing America as the world’s premier hub for life-sciences investment,” said Secretary Howard Lutnick.

US-UK Trade Deal

President Trump unveiled the U.S.-U.K. trade deal in July, stating that it will open up billions of dollars in market access for exports from the United States. This also included a $10 billion aircraft sale involving Boeing Co. (BA).

“With this deal, the U.K. joins the U.S. in affirming that reciprocity and fairness is an essential and vital principle of international trade,” President Trump said following the announcement in July.

The deal eased restrictions on exports of beef, ethanol, chemicals, machinery, and other industrial products. 

AZN stock is up 41% year-to-date and 37% over the past 12 months.

Also See: Michael Burry Takes Aim At Musk’s Tesla Again, Says TSLA Stock Is Still ‘Ridiculously Overvalued’: Report

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