The United States and United Kingdom have agreed to keep tariffs on U.K. pharmaceutical exports at zero, in exchange for Britain's National Health Service paying more for newly introduced medicines.

According to BBC News, the NHS will pay drug manufacturers 25% more for new medicines, in response to claims from the Trump administration the U.S. has been unfairly forced to subsidize costs for prescription drugs developed in other countries. As part of the agreement, the NHS will also increase its total spending on medicines from 0.3% of the country's GDP to 0.6% over the next decade.

This comes after President Donald Trump had threatened to hit the U.K. with 100% tariffs on branded drug imports. In a statement posted to X on December 1, Britain's Secretary of State for Science, Innovation and Technology Liz Kendall asserted that the trade deal will benefit both U.K. patients and pharmaceutical companies.

"Patients will get cutting-edge medicines sooner, while innovative firms will be able to grow and thrive," she said.

Pharmaceuticals are among the U.K.'s biggest exports to the U.S., accounting for £11.1 billion ($14.6 billion) of trade between September 2024 and September 2025, and more than 17% of Britain's total goods exports over that same period.