Global Daily Tax News, US, UK Broker Pharma Tariffs Deal, (Dec 3, 2025)

US authorities have agreed to exempt the UK from any future tariffs on pharmaceuticals in exchange for a number of concessions.

The Office of the US Trade Representative said the two countries had reached an agreement in principle on pharmaceutical pricing between the United States and the United Kingdom, in a so-called US-UK Economic Prosperity Deal (EPD).

The USTR said: "Pursuant to the terms of the pharmaceutical pricing agreement in principle announced [on December 1], the United Kingdom will reverse the decade-long trend of declining National Health Service (NHS) expenditures on innovative, life-saving medicines, and increase the net price it pays for new medicines by 25 percent. Furthermore, the United Kingdom will ensure that higher prices for new medicines are not materially eroded by a demand for portfolio-wide concessions under the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) or other rebate schemes. In fact, the United Kingdom has committed that the repayment rate owed by companies under the current VPAG scheme will decrease to 15 percent in 2026 and remain at or below that level for the duration of the scheme."

In exchange for these and other commitments, the USTR said, the United States has agreed to exempt UK-origin pharmaceuticals, pharmaceutical ingredients, and medical technology from Section 232 tariffs and will refrain from targeting UK pharmaceutical pricing practices in any future Section 301 investigation for the duration of President Trump's term.