US launches trade probe into Germany over medicine prices

The United States has launched a trade investigation into Germany's drug pricing policies.Washington says it wants to examine whether innovative medicines are undervalued in Germany, leaving US patients to shoulder a disproportionate share of pharmaceutical research and development costs.The announcement was made on Thursday in a statement by US Trade Representative Jamieson Greer, who said the investigation would determine whether Germany's "persistent underpayment for innovative pharmaceutical products by Germany is unreasonable or discriminatory and burdens or restricts US commerce."The investigation follows months of discussions between Washington and Berlin aimed at resolving the dispute.The Trump administration argues that Germany's pricing system, which includes negotiated discounts and mandatory rebates, suppresses the prices paid for new medicines. US officials say this leaves American patients bearing a larger share of the costs of developing new drugs."I am particularly concerned by reports that Germany is fast-tracking legislation that would further reduce spending on innovative medicines," Greer said.The move follows a directive issued by President Donald Trump on 12 May 2025, instructing the US Trade Representative to take action against foreign policies that force American patients to pay a disproportionate share of global pharmaceutical research and development costs."President Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development," Greer said.If the investigation concludes that Germany's policies are unfair, the US could impose tariffs or other trade restrictions under Section 301 of the Trade Act.The US has requested consultations with Germany, while a public hearing is scheduled for September.Germany's health reform draws US criticismFor years, the United States has argued that European healthcare systems benefit from lower drug prices, while American consumers bear a larger share of the cost of pharmaceutical innovation.Washington is particularly critical of the German government's planned healthcare reform.The reform is intended to help plug a multibillion-euro funding gap in Germany's public health insurance system and includes, among other things, additional savings contributions from the pharmaceutical industry.At the heart of the initial plans was a dynamic manufacturer rebate linked to trends in drug prices and the revenues of health insurers.Under the government's latest proposals, the industry is still expected to make a financial contribution to stabilising the health insurance funds. However, instead of a variable mechanism, discussions are now focusing on a fixed surcharge on the existing manufacturer discount.At the same time, Federal Health Minister Nina Warken (CDU) has proposed exempting companies from additional rebates if they conduct clinical trials in Germany. The aim is to strengthen Germany as a research hub and ensure that patients continue to have rapid access to new therapies.A vote in the Bundestag on the controversial health reform, originally scheduled for next week, has been postponed. According to parliamentary groups from the CDU/CSU and SPD, a key package of healthcare reforms proposed by Warken is now due to be adopted on 10 July, the last sitting day before the summer recess.