The United States Trade Representative (USTR), the Department of Commerce, and the Department of Health and Human Services jointly announced an agreement in principle on pharmaceutical pricing with the United Kingdom (U.K.). In a new insight, Director of Health Care Policy Michael Baker discusses the details of this health care deal, and the inherent dangers of a single-payer health care system this deal highlights.

Key points:

• The agreement on pharmaceutical pricing between the United States and the U.K. resolves an outstanding policy item of 2025; in exchange for tariff relief from the United States, the U.K. will work to address drug pricing parity between the two countries.
• The effort to address pharmaceutical pricing parity has two main components: increasing by 25 percent the net price the U.K. pays for new medicines, and reducing to 15 percent of excess revenue industry repayment rates under its rebate schedule, the Voluntary Scheme for Branded Medicines Pricing, Access, and Growth.
• The details of this agreement demonstrate a fundamental flaw in the U.K.’s single-payer health care system: The U.K. government only saw fit to increase the availability of resources for necessary pharmaceutical purchases and expanded treatment options when another government – rather than its own citizens or industries – demanded it.

Read the analysis.