USTR Jamieson Greer has launched a Section 301 investigation into whether Germany's persistent underpayment for innovative pharmaceutical products is unreasonable or discriminatory, with concerns heightened by reported German legislation that would further cut spending on innovative drugs.
The US Trade Representative Jamieson Greer initiated an investigation under Section 301 of the Trade Act of 1974 against Germany on 18 June 2026. This investigation will seek to determine whether persistent underpayment for innovative pharmaceutical products by Germany is unreasonable or discriminatory and burdens or restricts US commerce. This investigation follows months of meaningful discussions with German partners in an effort to resolve this issue.
“President Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development,” said Ambassador Greer. “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. We believe that the United States and Germany can find a path forward that expands access to the most innovative drugs for the German people while ensuring fair reimbursement for the pharmaceuticals made by American workers.”
“On 2 April 2026, the US and the UK announced a ground-breaking arrangement on pharmaceutical pricing that will help drive investment and innovation in both countries. Germany should follow suit with constructive negotiations to address this imbalance. Fighting the war against disease is a shared burden across wealthy nations,” said US Department of Health and Human Services Secretary Robert F. Kennedy, Jr. “The United States is calling on Germany to pay its fair share for the innovative treatments its people use. I commend Ambassador Greer for his leadership in confronting this imbalance. Fair reimbursement strengthens medical innovation and helps ensure the development of the next generation of lifesaving cures.”
Background
On 12 May 2025, the President directed the US Trade Representative to “take all necessary and appropriate action” to address foreign countries’ unfair actions that have the “effect of forcing American patients to pay for a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of pharmaceutical products below fair market value in foreign countries.”
Section 301 of the Trade Act of 1974, as amended (Trade Act), is designed to address unfair foreign practices affecting US commerce. Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government practices that burden or restrict US commerce. Under Section 302(b) of the Trade Act, the US Trade Representative may self-initiate an investigation under Section 301.
A Section 301(b) investigation examines whether the acts, policies, or practices are unreasonable or discriminatory and burden or restrict US commerce. After considering the advice of the inter-agency Section 301 Committee, the US Trade Representative initiates investigations. The US Trade Representative must seek consultations with the foreign government whose acts, policies, or practices are at issue in each investigation. The Office of the US Trade Representative (USTR) has requested consultations with Germany in connection with this investigation.
To be assured of consideration, interested persons should submit written comments, requests to appear at the hearing, and a summary of the testimony, by 10 August 2026. USTR will hold a hearing in connection with these investigations on 22 September 2026.
As set out in the Federal Register notice, the investigation relates to allegations of Germany’s unfair pricing policies and practices with regard to innovative pharmaceutical products, which result in the United States paying a disproportionate share of global research and development (R&D) costs for innovative pharmaceuticals.
Although the means and tools for payment disparities for innovative pharmaceuticals vary, they may include the imposition of:
- supplemental discounts in exchange for confidentiality of negotiated prices; and
- mandatory variable rate rebates.
A copy of the Federal Register Notice is available here.
A docket for comments regarding the investigation will be available here.
