Australia could be next to pay more for pharmaceuticals under Trump trade plan

Washington: The Trump administration persuaded the United Kingdom to pay 25 percent more for new drugs in a trade deal that now serves as a model for forcing other developed countries such as Australia to spend more money on drugs.

Under the deal, announced overnight, the UK’s National Health Service will increase the net price it pays for new medicines by 25 per cent and some rebates paid by pharmaceutical companies to the NHS will be reduced.

In exchange, British medicines will be exempt from potentially triple-digit US tariffs for the remainder of President Donald Trump’s term, as well as investigations into future trade practices involving the medicines.

It was not immediately clear whether British consumers would be forced to pay more as a result. However, UK media reported that it would cost the NHS around £3 billion ($6.1 billion).

The overall structure of the deal, in which other countries pay more for drugs or the United States faces punitive trade measures, provides a model for global negotiations, said a White House official who asked not to be named.

But they said details such as the 25 per cent rate or changes to the NHS discount process would not necessarily be a reference point for other deals.

“For decades, Americans have subsidized global pharmaceutical research and development by paying several times more for the same drugs than our peers in other wealthy countries pay,” White House spokesman Kush Desai said in a statement.

“President Trump has vowed to use every tool of his executive authority to put America first, and the administration’s drug deal with the United Kingdom is a historic step toward ensuring other developed countries finally pay their fair share.

“Americans make up only 4 percent of the world’s population, and we cannot and will not cover more than 75 percent of the costs of developing new drugs for the rest of the world.”