WASHINGTON, D.C. — The United States and the United Kingdom reached a sweeping agreement in principle last week to rebalance pharmaceutical pricing between the two nations, marking a rare international breakthrough aimed at lowering long-standing drug-price disparities and strengthening U.S. pharmaceutical leadership.
The deal, negotiated as part of the new U.S.–U.K. Economic Prosperity Deal (EPD), commits the United Kingdom to raise the net prices it pays for innovative medicines by 25%, reversing a decade of declining National Health Service (NHS) spending on cutting-edge treatments. U.S. officials say the agreement addresses a persistent structural imbalance in which American patients have long shouldered disproportionately high costs for medicines also sold overseas.
“Today’s agreement is a major win for American workers and our innovation economy,” Commerce Secretary Howard Lutnick said. “We are strengthening supply chains, creating high-quality jobs, and reinforcing America as the world’s premier hub for life-sciences investment.”
Under the agreement, the U.K. will also ensure that higher prices for new medicines are not later negated through portfolio-wide concessions or rebate mechanisms, including the Voluntary Scheme for Branded Medicines Pricing, Access and Growth. The repayment rate under that program—paid by manufacturers back to the NHS—will fall to 15% in 2026 and remain at or below that level.
The United States, in turn, will exempt U.K.-made pharmaceuticals, active ingredients, and medical technology from Section 232 tariffs, and will refrain from initiating Section 301 investigations targeting U.K. pricing practices for the remainder of President Trump’s term.
“President Trump is the first American President to work with U.S. trading partners to ensure fair payment internationally for innovative pharmaceuticals,” U.S. Trade Representative Ambassador Greer said. “For too long, American patients have been forced to subsidize prescription drugs in other developed countries.”
The agreement follows the administration’s rollout of its most-favored-nation drug-pricing policy and signals a broader strategy to push U.S. allies toward higher contributions to pharmaceutical research and development—a system U.S. officials say better reflects the shared benefits of medical innovation.
“This agreement brings long-overdue balance to U.S.–U.K. pharmaceutical trade,” Health and Human Services Secretary Robert F. Kennedy, Jr. said. “Americans should not pay the world’s highest drug costs for medicines they helped fund.”
Officials said the arrangement is also designed to secure continued investment from U.K. pharmaceutical firms in U.S. research and manufacturing, reinforcing American dominance in a sector central to economic competitiveness and national health security.
“When nations fairly share the burden of producing and paying for life-saving medicines, every citizen gains,” said Chris Klomp, director of Medicare and a senior negotiator on the agreement. “This is how we win the fight against global disease—together.”
The administration is already reviewing pricing practices in multiple other U.S. trading partners and signaled that similar negotiations may follow.
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