Two recent developments in how the US and the UK work together in the life sciences sector promise significant improvements to trade, as well as greater access to innovative products for UK patients.
A trade partnership
We reported late last year on the agreement of a UK–US Economic Prosperity Deal.
The agreed text (Arrangement between the United States of America and the United Kingdom on pharmaceutical pricing) has now been released. Key changes include:
Trade in pharmaceuticals
A key area of focus in the UK Government announcement is that pharmaceutical exports from the UK to the US (expected to exceed £5 billion per year) will enter the US tariff-free for at least three years, making the UK the first country in the world to secure 0% tariffs on pharmaceutical exports to the US.
Trade in medical devices
The UK has also secured preferential terms for its medical device exports, with protections against additional new tariffs on medtech for at least three years. The UK and US have also agreed to work together towards mutual recognition of medical device approvals.
Reduced VPAG payment percentage
The UK’s Voluntary Scheme for Branded Medicines Pricing, Access and Growth headline payment percentage will be capped at a maximum of 15% until the end of the current scheme (due to expire on 31 December 2028).
Changes to NICE methodology
The net price paid by the NHS for prospective new medicines is set to increase by 25% beginning in April 2026. The UK’s health technology appraisal body, the National Institute for Health and Care Excellence (NICE), will introduce two important changes: the Quality-Adjusted Life Years (QALY) threshold will be increased from £20,000–£30,000 to £25,000–£35,000, and a new value set for valuing health-related quality of life, based on public surveys, will be introduced. These changes are likely to lead to increased availability of innovative treatments.
Innovative medicines spending
The UK has also committed to doubling spending on innovative medicines as a proportion of GDP from 0.3% to 0.6% over the coming decade.
The UK Government presents the deal as having the potential to secure and expand access to vital drugs, safeguard the medicines supply chain, and drive crucial investment. It has received praise from the ABPI (the trade body representing pharma and biotech companies in the UK), as well as from representatives of industry and medical charities.
Enhanced regulatory cooperation
The UK and US have also announced a deepening of regulatory cooperation on medical devices, led by their regulatory bodies, the MHRA and the US FDA, and building on their existing collaboration in pharmaceuticals. This signals a commitment to closer alignment on regulatory approaches and greater information-sharing to support timely access to safe and effective devices. It also reflects a broader effort to reduce unnecessary duplication in regulatory processes, improve predictability for manufacturers operating in both markets, and support innovation across advanced and emerging technologies.
The initiative is intended to lower regulatory friction between the UK and the US, particularly for developers of novel, digital and AI-enabled medical devices. Enhanced cooperation is likely to support more efficient product development, evidence generation and post-market surveillance strategies, while enabling regulators to respond more quickly to technological change. While the announcement does not create mutual recognition or automatic approvals, it reinforces the UK’s strategy of leveraging trusted international partnerships post-Brexit. It also provides reassurance to global medtech businesses that regulatory convergence and collaboration remain central to the UK’s policy offer.
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