US Opens Trade Probe Into Germany’s Drug Pricing Cuts
The United States has launched an investigation into Germany’s pharmaceutical policies, accusing the country of ongoing underpayment for medicines as it tries to rein in rising health costs, including drug spending. The move was reported by CNBC.
US Trade Representative Jamieson Greer said on Thursday that President Donald Trump believes American patients should not bear a disproportionate share of the global cost of pharmaceutical research and development. He said he was especially concerned by reports that Germany is speeding up legislation that would further cut spending on innovative medicines, calling it “a serious step backward.”
Germany first proposed in April to restructure its health insurance system to reduce public spending after healthcare costs rose sharply in recent years. It also unveiled a series of savings measures, including large rebates for insurance funds. Some pharmaceutical executives warned that those changes could lead them to delay or withdraw new medicines from the German market.
The draft law is now moving through parliament. The US probe was opened under Section 301 of the Trade Act, which allows unilateral action against countries deemed to use unfair practices that burden US commerce. Greer said trade partners must pay their fair share of funding new drug research, and that the investigation followed months of talks with German counterparts. The Trump administration also unveiled its “most favored nation,” or MFN, drug policy last year, linking US drug prices to the lowest prices available abroad. As part of that policy, it reached agreements with 17 of the world’s largest pharmaceutical companies to lower prices for US customers in exchange for tariff relief.
