US opens trade probe into Germany over drug pricing policy

The Trump administration turned Germany’s drug-pricing rules into a formal trade fight on June 18, opening a Section 301 investigation that could reshape transatlantic tensions over medicine costs. The Office of the United States Trade Representative said it wants to determine whether Germany is underpaying for innovative pharmaceutical products in a way that is unreasonable or discriminatory and that burdens U.S. commerce.

U.S. Trade Representative Jamieson Greer said he was especially concerned by reports that Germany was fast-tracking legislation that would further reduce spending on innovative medicines. The administration has already linked the case to broader efforts to pressure foreign governments over what Washington sees as artificially low reimbursement, arguing that weak returns abroad reduce incentives for research and development in the United States.

The process now moves into a formal record-building phase. USTR requested consultations with Germany, set an August 10 deadline for written comments, requests to appear at the hearing and testimony summaries, and scheduled a public hearing for September 22. The German Embassy in Washington did not immediately respond. Even without an immediate ruling, the case puts Berlin on notice that drug pricing is now being handled not only as a health policy debate, but as a trade dispute.

The move follows months of talks between the two governments and reflects a directive issued by the White House on May 12, 2025, ordering USTR to act on foreign practices that force American patients to pay a disproportionate share of global pharmaceutical research costs. USTR also pointed to the April 2, 2026 U.S.-U.K. pharmaceutical pricing arrangement as a model Germany should follow. Together, those steps show Washington using trade tools to defend drug company revenues abroad, not just to police tariffs or border barriers.

Berlin’s response has centered on affordability and fiscal pressure inside Germany’s public health system. Health Minister Nina Warken has said drugmakers would not be exempt from cost-cutting measures, while also arguing that Germany still offers fast access to innovative medicines and remains attractive for pharma because of reimbursement, clinical-trial opportunities and drug development. Germany’s Health Ministry says broader reforms are aimed at stabilizing statutory health-insurance costs and are expected to take effect as early as 2027.

The dispute arrives as the industry is already reacting. Reuters reported on June 12 that Eli Lilly and Boehringer Ingelheim each planned to cut Germany investments by at least $1 billion, and Pfizer chief executive Albert Bourla reportedly told Chancellor Friedrich Merz in a letter that the company was reviewing the timing and scope of its Germany investments. Reuters also reported on June 15 that Germany was dropping a planned variable-discount system for pharmaceuticals in favor of fixed reductions after industry opposition. USTR’s 2026 Special 301 process had already placed the European Union on a watch list over protection for innovative medicines, signaling that this clash had been building long before Germany became the next target.