By: IPP Bureau
Last updated : December 03, 2025 12:02 pm
The deal aims to address long-standing imbalances in pharmaceutical trade while boosting investment and innovation on both sides of the Atlantic
The United States and the United Kingdom have announced a groundbreaking agreement in principle on pharmaceutical pricing, marking a major milestone in the US-UK Economic Prosperity Deal (EPD).
The deal aims to address long-standing imbalances in pharmaceutical trade while boosting investment and innovation on both sides of the Atlantic.
“President Trump is the first American President to work with US trading partners to ensure fair payment internationally for innovative pharmaceuticals and pharmaceutical ingredients," said US trade representative Ambassador Greer.
"For too long, American patients have been forced to subsidize prescription drugs and biologics in other developed countries by paying a significant premium for the same products in ours.
“Today, the United States and the United Kingdom announce this negotiated outcome pricing for innovative pharmaceuticals, which will help drive investment and innovation in both countries. The Trump Administration is reviewing the pharmaceutical pricing practices of many other US trading partners and hopes that they will follow suit with constructive negotiations," he added.
The deal ensures continued investment by UK pharmaceutical companies in the United States, reinforcing America’s position as a global leader in pharmaceutical development and manufacturing.
“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.
“This deal doesn’t just deepen our economic partnership with the United Kingdom—it ensures that the breakthroughs of tomorrow will be built, tested, and produced on American soil.”
Under the agreement, the UK will reverse a decade-long decline in National Health Service (NHS) spending on innovative medicines and increase the net price it pays for new drugs by 25%. The country has also committed to reducing repayment rates under its Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) to 15% in 2026 and maintaining that level for the duration of the program.
“This agreement comes less than two months after President Trump announced the first results of his most-favored-nation (MFN) pharmaceutical drug pricing policy and underscores his determination to bring down drug prices for the American people.
"When nations fairly share the burden of producing and paying for life-saving medicines, every citizen gains, and the fight against global disease becomes one we can actually win together,” said Chris Klomp, Director of Medicare and Deputy Administrator of the Centers for Medicare & Medicaid Services, and a lead negotiator of the deal.
In return, the United States will exempt UK-origin pharmaceuticals, pharmaceutical ingredients, and medical technology from Section 232 tariffs and will refrain from targeting UK pricing practices under Section 301 investigations during President Trump’s term. The agreement also guarantees that UK citizens will have access to the latest pharmaceutical breakthroughs.
“Americans should not pay the world’s highest drug costs for medicines they helped fund,” said Health and Human Services Secretary Robert F. Kennedy, Jr.
“This agreement with the United Kingdom strengthens the global environment for innovative medicines and brings long-overdue balance to U.S.–U.K. pharmaceutical trade. President Trump showed real courage and leadership in demanding these reforms, and I thank him for delivering results that put Americans first.”