UK will increase its spending on medicine under a zero-tariff deal with the US

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LONDON (AP) — The U.K. has secured a 0% tariff rate for all U.K. medicines exported to the U.S. for at least three years, officials said Monday, in return for the U.K. spending more on new medicines.

Under the deal, the U.S. agreed to exempt U.K.-origin pharmaceuticals, pharmaceutical ingredients, and medical technology from import taxes.

The Trump administration said in return U.K. drugs firms committed to invest more in the U.S. and create more jobs.

The U.K. government said the 0% rate on all of its pharmaceuticals exports was the lowest offered to any country. As part of the deal, it said the country's National Health Service will spend around 25% more in new and effective treatments — the first major increase in such spending in over two decades.

Officials said that means U.K. health authorities will now be able to approve medicines that deliver significant health improvements but might have previously been declined purely on cost-effectiveness grounds, including breakthrough cancer treatments or therapies for rare diseases.

“This vital deal will ensure U.K. patients get the cutting-edge medicines they need sooner, and our world-leading UK firms keep developing the treatments that can change lives,” said Science and Technology Secretary Liz Kendall.

The Association of the British Pharmaceutical Industry said the deal was “an important step towards ensuring patients can access innovative medicines needed to improve wider NHS health outcomes."

“It should also put the U.K. in a stronger position to attract and retain global life science investment and advanced medicinal research," said ABPI chief executive Richard Torbett.

U.S. Health Secretary Robert F. Kennedy Jr. said the agreement “strengthens the global environment for innovative medicines and brings long-overdue balance to U.S.–U.K. pharmaceutical trade.”

AstraZeneca is among pharmaceutical giants that have cancelled or paused their investments in the U.K. in recent months. U.S. ambassador Warren Stephens recently warned said American businesses will cut future investments if “there are not changes made and fast.”

Earlier this year President Donald Trump and British Prime Minister Keir Starmer agreed on a framework for a trade pact that would slash U.S. import taxes on British cars, steel and aluminum in return for greater access to the British market for U.S. products, including beef and ethanol.