US President Donald Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development, US Trade Representative Jamieson Greer said in a statement released on Thursday (June 18) night.
“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,” Greer added.
The investigation is being carried out under a legal provision known as Section 301 that allows the Office of the US Trade Representative to pursue unilateral action against countries that impose unfair trade barriers. Such inquiries can lead to tariffs and typically take months to conclude. The move risks reigniting tensions between the US and Germany, as well as the wider European Union.
The decision comes in response to a German cost-cutting healthcare plan that seeks to curb drug spending, tighten reimbursements and curtail some benefits.
Greer, in the statement, suggested the inquiry could also be resolved through talks, pointing to a US-UK deal from earlier this year as an example.
“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,” Greer said.
The White House did not immediately respond to a request for comment on Thursday night. The German Embassy in Washington also did not immediately respond.
The investigation follows the Trump administration’s so-called most-favoured-nation campaign, which is intended to end the practice of Americans often paying far higher prices for prescription drugs than other countries such as Canada and the UK.
Trump has urged pharmaceutical companies to manufacture more of their medicines in the US, and the administration began an investigation into whether the lack of local production is a national security threat.
USTR said it would hold a hearing regarding the inquiry on September 22 and is seeking public comments by August 10.
