The U.S. Trade Representative is investigating Germany’s drug pricing policies to determine whether these actions leave the United States with a disproportionate share of global research and development costs, according to a June 19 announcement.
USTR ambassador Jamieson Greer has launched the probe under Section 301 of the Trade Act of 1974, which focuses on unfair trade practices that impact the United States. “President Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development,” Greer said in a Thursday release. “I am particularly concerned with news that Germany is fast-tracking legislation that would further reduce its spending on innovative pharmaceuticals. This is a serious step backwards at a time when our trading partners need to step up and start paying their fair share to fund innovative pharmaceutical research and development.”
In April, Germany announced a new draft law designed to save more than €16 billion ($18.3 billion) in healthcare spending and control insurance rates. The country’s leaders presented the plan as necessary due to an expected widening deficit at state insurers, projected to grow from €15.3 billion ($17.5 billion) in 2027 to €40.4 billion ($46.3 billion) by 2030.
Drugmakers have opposed these changes, with Eli Lilly CEO David Ricks saying it sends "a terrible signal" to pharmaceutical companies. Both Eli Lilly and Boehringer Ingelheim canceled plans for investments in German production facilities over the proposed reforms; following this, Reuters reported that Germany dropped one contentious part of its plan.
The USTR investigation follows months of discussions between the United States and Germany aimed at resolving concerns about drug pricing policy impacts on innovation funding. The trade office is expected to hold a public hearing related to the investigation on September 22.
If investigators determine that U.S. interests are unreasonably impacted by German actions, possible measures could include confidential supplemental discounts or mandatory variable rate rebates for drugs sold in Germany. Greer suggested that Germany consider following the example set by the United Kingdom after its recent agreement with Washington, which involves higher payments for pharmaceutical innovation in exchange for protection from tariffs imposed by President Trump’s administration.
“Fighting the war against disease is a shared burden across wealthy nations,” said U.S. Department of Health and Human Services Secretary Robert F. Kennedy Jr., adding, “The United States is calling on Germany to pay its fair share for the innovative treatments its people use.”
