The U.S. and U.K. have reached a landmark agreement in principle on pharmaceutical pricing, an outcome senior Trump administration officials say corrects decades of unfair trade practices that left American patients footing the world's drug bill.
Announced jointly by the Office of the U.S. Trade Representative, the Commerce Department, and Health and Human Services, the deal is a pillar of the historic U.S.-U.K. Economic Prosperity Deal struck by President Donald Trump and British Prime Minister Keir Starmer.
The agreement aims to rebalance pharmaceutical trade, strengthen supply chains, and expand U.K. investment in U.S. drug development.
Ambassador Jamieson Greer, who led the U.S. negotiating team, said the deal ends an era in which "American patients have been forced to subsidize prescription drugs and biologics in other developed countries by paying a significant premium."
The Trump administration has long argued that foreign governments artificially suppress drug prices, forcing American consumers to make up the difference and undermining U.S. innovation.
Under the new framework, the U.K. will raise the net price it pays for new medicine by 25%, reversing more than a decade of declining National Health Service spending on cutting-edge treatment.
Britain also agreed to curb the rebate mechanisms under the VPAG (Voluntary scheme for branded medicines Pricing, Access and Growth) that often forced pharmaceutical companies into deep, portfolio-wide concessions.
The U.K.'s repayment rate under VPAG will drop to 15% in 2026 and stay there for the duration of the program, providing long-sought stability for manufacturers.
Commerce Secretary Howard Lutnick called the deal "a major win for American workers and our innovation economy," emphasizing that stronger pricing standards abroad will fuel U.S. research, manufacturing, and high-quality jobs.
Analysts note that the agreement reflects the Trump administration's broader push to secure fair-value payments from allies, following similar pressure on Japan, Canada, and EU nations during his first term.
In return, the U.S. will exempt U.K.-made pharmaceuticals and medical technology from Section 232 tariffs and decline to target British pricing practices in any future Section 301 investigation for the remainder of Trump's term.
The administration will also work to ensure U.K. citizens gain access to American-developed medical breakthroughs.
Chris Klomp of the Centers for Medicare and Medicaid Services said the agreement follows the early results of Trump's most-favored-nation drug pricing policy, which seeks to ensure Americans do not pay more than peer nations for the same medicines.
"When nations fairly share the burden," Klomp said, "the fight against global disease becomes one we can actually win together."
Health and Human Services Secretary Robert F. Kennedy Jr. praised Trump's leadership, saying, "Americans should not pay the world's highest drug costs for medicines they helped fund."
He added that the reforms "put Americans first" — a theme echoed throughout the administration's trade agenda.
With the U.S.-U.K. pharmaceutical deal now entering its final drafting stage, officials say it could become the model for future negotiations as Washington presses other allies to stop relying on American patients to subsidize their health systems.
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