The United States has launched an investigation in Germany to determine whether underpayment for innovative pharmaceutical products is affecting trade in the US.
“This investigation will seek to determine whether Germany’s persistent underpayment for innovative pharmaceutical products is unfair or discriminatory and burdens or restricts U.S. commerce.” US Trade Representative Jameson Greer said.
He said the investigation under Section 301 of the Trade Act of 1974 “followed months of fruitful discussions with our German partners in an effort to resolve this issue.”
What else did Greer say?
“President Trump has made clear that American patients should not bear a disproportionate share of global pharmaceutical research and development,” Greer said.
“I am particularly concerned by the news that Germany is rapidly enacting legislation that would further reduce its spending on innovative pharmaceuticals,” Greer said.
He said it was “a serious step forward at a time when our trading partners need to step up and start doing their fair share to fund innovative pharmaceutical research and development.”
Greer said his office would open a docket for written comments to be submitted on June 25, and its Section 301 committee would hold a public hearing on the investigation in September.
US pharmaceutical prices rank among the highest in the world.
A report by the Rand Corporation 2024 found that prescription drug prices in the US were significantly higher than in other countries, with prices on average 2.78 times higher than in 33 other countries. The report found that the pricing gap was much larger for brand-name drugs.
Germany trying to close healthcare funding gap
In April, the German cabinet gave the green light to a health care draft law that Chancellor Friedrich Merz called “historic.”
The reforms aim to reduce insurance premiums, saving more than €16 billion, but the measures have already disappointed investors.
Earlier in June, US pharmaceutical company Eli Lilly announced it would halve its originally planned investment of €2.3 billion ($2.7 billion) in Alzey, Rhineland-Palatinate.
The company cited the German government’s healthcare reforms in its decision to cut investments.
Meanwhile, the German government is changing plans to introduce variable rebates on pharmaceutical products, Reuters news agency reported on Monday, citing a government source.
The federal health ministry said nothing had been decided yet and declined to comment further on any “parliamentary discussions”, the agency reported.
Edited by: Shawn Sinico
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