The key element of the agreement is confirmation that UK pharmaceutical exports to the US will face a preferential tariff rate of 0% for at least three years, making the UK the only country to secure such terms under current US policy. Preferential treatment also extends to medical technologies.
Industry groups argue this “protects UK-based manufacturing” and gives the UK a structural edge when global companies decide where to locate production for US supply. With pharmaceuticals accounting for roughly a fifth of UK exports to the US by value, the deal is widely seen as reinforcing the UK’s ambition to become Europe’s leading life sciences economy by 2030.
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Trade policy is coupled with domestic reforms to medicines access and pricing. The government has committed to increasing net National Health Service (NHS) spending on innovative medicines by around 25%. This marks the first major uplift in more than two decades, allowing funding for therapies previously rejected on cost grounds, including breakthrough cancer and rare disease treatments. To support this, the National Institute for Health and Care Excellence (NICE)’s standard cost-effectiveness threshold is being raised from £20,000–£30,000 ($27,000–$40,000) to £25,000–£35,000 ($34,000–$47,000) per quality-adjusted life year. Patient and research charities have welcomed the changes as a long-overdue step that better reflects the true value of medicines and should speed access to cutting-edge therapies in oncology, rare disease, respiratory, and other high-need areas.
Crucially, the package is designed to neutralize potential downside risks from the US Most Favored Nation (MFN) drug pricing initiative, which benchmarks US prices against those in other developed markets. The UK has secured specific safeguards so that its more generous medicines pricing and access policies do not push US prices downward, which could otherwise make companies delay or avoid launching new drugs in the UK. As a result, government and industry leaders argue that the combination of MFN protection and a more predictable domestic pricing framework should encourage global pharmaceutical companies to prioritise the UK for earlier commercial launches of new medicines and for clinical trials, helping to keep UK patients among the first in the world to access breakthrough treatments.
The industrial impact is already visible. Ministers point to multi-billion-pound commitments from companies including Moderna (Cambridge, MA, US), Bristol Myers Squibb (New York, NY, US), and BioNTech (Mainz, Germany) as evidence that tariff certainty and a more innovation-friendly NHS have strengthened confidence in the UK as a base for R&D and manufacturing. Bristol Myers Squibb has linked the expected investment of more than $500m over five years directly to the new policy framework. Industry bodies stress that zero-tariff access to both US and EU markets gives the UK a rare competitive advantage for high-value medicines manufacturing, while advanced therapy developers emphasise the importance of stable tariffs and pricing rules for long-term investment decisions.
Beyond tariffs and pricing, the deal sits within a broader life sciences strategy aimed at accelerating development timelines and better exploiting UK research and data assets. Clinical trial approval times have already fallen from a median of 91 to 41 days, and the government plans to expand access to NHS data through a new Health Data Research Service. Alongside the 10-Year Health Plan and a Life Sciences Sector Plan backed by more than £2bn ($2.68bn) of public investment, these reforms are intended to ensure that innovative therapies are developed, tested, and adopted in the UK first, with clinical trial participation becoming a routine option for patients.
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By GlobalDataTaken together, the zero-tariff US deal, MFN mitigations, increased medicines spending, and NICE reforms position the UK as a uniquely advantaged base for advanced drug development and manufacturing.
