US opens trade investigation into Germany drug pricing

The United States has launched a formal trade investigation into Germany's pharmaceutical pricing policies, a move that could lead to punitive tariffs and marks a significant escalation in transatlantic trade tensions. U.S. Trade Representative Jamieson Greer announced the probe on Thursday, June 18, alleging that Germany systematically underpays for innovative medicines, forcing American patients and taxpayers to shoulder a disproportionate share of global research and development costs.

The investigation is being conducted under Section 301 of U.S. trade law, which allows the government to unilaterally respond to what it deems unfair trade practices. Greer stated that the inquiry follows months of talks with the German government that have so far failed to produce a solution. He expressed particular concern over pending German health reform legislation, which he said appears designed to further reduce spending on innovative pharmaceuticals.

The U.S. action directly targets Germany's planned overhaul of its statutory health insurance system, a reform package intended to address a multibillion-euro funding gap. The initial proposals included a dynamic manufacturer rebate linked...