The UK has secured a zero percent tariff on pharmaceuticals to the US, which the government said will “protect UK-based manufacturing and cements the UK as a world leader for life sciences investment.” This deal will be in place for at least three years.
The deal will also secure preferential terms for the UK’s med-tech exports, which the Government said means that there are no additional new tariffs on these products, and will lead to further investments in the UK, boosting growth.
The deal is part of the UK-US Economic Prosperity Deal (EPD), which was announced during May 2025. The deal addresses three core objectives:
- Growing the quality and volume of mutually beneficial trade between the US and the UK leading to good, high-paying jobs and growth in both countries.
- Removing barriers to make it easier for US and UK businesses to operate, invest and trade in both countries.
- Ensuring that the US-UK relationship is rooted in a strong economic partnership that is fair, reciprocal, future-facing, and built on a shared vision of the challenges that face both economies.
“The move has secured the confidence of the pharmaceutical industry showing that the UK is a top destination for investment and growth, with major firms like Moderna, Bristol Myers Squibb, and BioNTech investing billions here, driving renewed confidence in the UK and supporting the government’s ambition for the UK to become Europe’s leading life sciences economy by 2030,” the Government said in a statement.
The Government is also set to invest around 25% more in new treatments, which it says is the first major increase in over two decades. The move means that the National Institute for Health Care Excellence (NICE) will be able to approve medicines that “deliver significant health improvements but might have been declined purely on cost-effectiveness grounds. This could include breakthrough cancer treatments, therapies for rare diseases and innovative approaches to conditions that have long been difficult to treat,” the Government added.
“This is a vital agreement that delivers two big benefits,” said Science Minister Lord Patrick Vallance. “It will help us get the best and most innovative treatments to patients right across the UK quickly. And with a world-beating deal on US tariffs, it is a huge boost for our pharmaceutical industry – cementing the UK as the destination of choice for life sciences businesses to invest, innovate and grow.”
This latest deal links directly to the Government’s 10-year Health Plan and is part of its Modern Industrial Strategy and Life Science Sector Plan.
Welcoming the 'strong and positive progress," Richard Torbett, Chief Executive of Association of British Pharmaceutical Industry said: "These commitments address industry concerns on NHS access to medicines, and the UK’s record-high and unpredictable payment rate. There remain a great many details to work out and further technical improvements to make."
Jane Wall, Managing Director, Bioindustry Association, added: The “BIA welcomes today’s announcements, which indicate strong forward movement on improving the competitive environment for biotech and pharma in the UK, ensuring preferential access for companies to the US market, improving their growth prospects and attractiveness to investors and global partners. Crucially, the UK now has a unique differentiator for the manufacturer of high-value, innovative medicines, with zero tariff access to both European and US markets."
Further reading:
Visit Blog