The United States government has announced an agreement in principle with the United Kingdom regarding pharmaceutical pricing, as part of the U.S.-U.K. Economic Prosperity Deal (EPD). The announcement was made jointly by the Department of Commerce, the Office of the United States Trade Representative, and the Department of Health and Human Services.
According to officials, President Trump and Prime Minister Starmer reached a consensus aimed at addressing imbalances in pharmaceutical trade between the two countries. The agreement is expected to improve conditions for pharmaceutical companies operating in the United Kingdom and secure continued investment from U.K. firms in the U.S., reinforcing American leadership 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.”
Ambassador Greer stated: “President Trump is the first American President to work with U.S. trading partners to ensure fair payment internationally for innovative pharmaceuticals and pharmaceutical ingredients. 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 U.S. trading partners and hopes that they will follow suit with constructive negotiations.”
Under terms outlined in today’s announcement, the United Kingdom has agreed to reverse its decade-long decline in National Health Service (NHS) spending on new medicines by increasing net prices paid for these products by 25%. Additionally, measures will be taken so that higher prices are not offset by demands for broad concessions under schemes such as VPAG or other rebate programs. Specifically, repayment rates under VPAG will decrease to 15% starting in 2026 and remain at or below that level during its term.
Chris Klomp of Medicare commented: “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.”
In return for these commitments from Britain, U.K.-origin pharmaceuticals, ingredients, and medical technology will be exempted from Section 232 tariffs imposed by Washington; furthermore there will be no Section 301 investigations into British pricing practices during President Trump’s current term. The U.S. also pledged efforts toward ensuring access to new treatments for U.K citizens.
Health Secretary Robert F. Kennedy Jr added: “Americans should not pay the world’s highest drug costs for medicines they helped fund,” he said.“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.”
