The Trump administration’s position on drug prices is that Americans pay too much while other countries don’t pay nearly enough. A new trade deal with the United Kingdom is addressing that imbalance, raising prices the national health system will pay for new medicines in exchange for tariff exemptions on U.K. pharmaceutical exports valued at about $3.5 billion a year.

The deal announced Monday is an update to a broad trade deal the U.S. struck with the U.K. in May. While the countries describe this new deal as an “agreement in principle,” it sets a precedent that could shape pharmaceutical pacts the Trump administration is still pursuing with other countries.

Before the U.K.’s National Health Service (NHS) can use a new medicine, it must first be evaluated by the government’s Nationa

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