Arrangement between USA and UK on pharmaceutical pricing
Building on the General Terms of the USA-UK Economic Prosperity Deal (EPD) on May 8, 2025, in which President Donald J. Trump and Prime Minister Sir Keir Starmer committed to deliver shared prosperity for American and British Citizens alike, the United States and the United Kingdom released the legal text of the U.S.-UK Arrangement on Pharmaceutical Pricing. Consistent with the agreement in principle announced on December 1, 2025, the text includes the following elements:
- Spending increase:The United Kingdom will double spending on new medicines from 0.3% to 0.6% of GDP over 10 years.
- Net price increase: The United Kingdom will increase the net price paid by the NHS for new medicines by 25% by raising its cost-effectiveness threshold to £25,000 to £35,000 per QALY and introducing a new value set (EQ-5D) for how it assesses health states.
- Clawback cap: The rebate that companies pay on brand medicines under the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) will be capped at 15%, down from 23%, while the VPAG remains in force.
- Tariff exemption:The United States will reduce Section 232 tariffs on UK pharmaceuticals to zero (subject to certain conditions) and will exclude such products from future tariffs under Section 301.
- MFN mitigation:The agreement contains language regarding MFN mitigations for UK prices under the GENEROUS, GLOBE, GUARD and other CMS models. We will seek to clarify this language and provide an assessment.
This agreement is the result of intensive advocacy by PhRMA, ABPI and members with government officials in both countries. We are analyzing the details of the agreement and assessing next steps. In the meantime, PhRMA is using the following statement for media inquiries:
“PhRMA welcomes the U.S.-UK agreement as an important first step by the UK. For too long, other wealthy countries have not paid their fair share for innovative medicines, making U.S. patients and taxpayers shoulder the cost of developing lifesaving treatments and cures. PhRMA appreciates the Administration’s leadership, including the work of USTR, Department of Health and Human Services and the Department of Commerce, to advance policies that push our trading partners to pay more for innovation. We encourage the Trump Administration to continue seeking similar agreements with other nations.”
To read the text of the Arrangement Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland on Pharmaceutical Pricing, click here.