The U.S. Trade Representative has launched a Section 301 trade investigation targeting Germany to determine whether the country uses unfair pricing policies and practices to underpay for pharmaceuticals at the expense of U.S. consumers, according to a Federal Register notice.
The trade office investigation, launched on June 18, will review if Germany’s actions result in the U.S. paying a disproportionate share of global research and development costs for innovative pharmaceuticals.
“U.S. consumers pay approximately 3.9 times as much as the prices consumers in Germany pay for brand-name drugs,” the notice says. As a result, “higher U.S. prices support and fund global R&D costs for innovative pharmaceutical manufacturers and, thereby, unfairly shift Germany’s fair share of costs for pharmaceutical innovation onto U.S. patients and consumers.”
The Trump administration has previously used Section 301 investigations as a precursor to tariffs, including planned levies on imports from Nicaragua and China semiconductors expected to come next year.
“For now, this is only an investigation. No tariffs have been announced, and no product lists have been published,” Pete Mento, director of global trade advisory services at Baker Tilly, said of the Germany probe in a LinkedIn post. “But if the last few years have taught us anything, it’s that trade disputes rarely stay confined to the industry that started them.”
This focus of the most recent probe on pricing disparities comes as Germany considers new measures impacting patented medicines, per the notice. Specifically, the trade office is focusing on 2026 draft legislation from Germany’s Ministry of Health that would impose an additional mandatory rebate on patented medicines on top of existing price cuts.
The legislation would impose a 3.5% additional mandatory rebate for patented medicines for the first half of 2027, the notice says. After that, the rebate would become variable, tied to how actual drug spending compares with target health-insurance outlays. One estimate cited in the notice projects that this “dynamic” rebate could reach 20% by 2030.
“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,” USTR Jamieson Greer said in a press release.
Greer suggested Germany should follow an arrangement on pharmaceutical pricing struck between the U.S. and the United Kingdom. The deal, which followed a U.S. Section 232 investigation into the pharmaceutical sector, resulted in no tariffs being applied to U.K.-origin patented and non-patented pharmaceuticals from Jan. 1, 2026, to Jan. 19, 2029.
The USTR is seeking comment on the investigation and requests to appear at a public hearing set for Sept. 22.
In April, Trump imposed a 100% tariff on patented pharmaceutical products and ingredients. The duty is scheduled to go into effect July 31 for a list of 17 major pharmaceutical companies, including Eli Lilly and Co., Pfizer and Novo Nordisk. Other companies would begin facing the tariff on Sept. 29.
These measures are part of a broader effort by the Trump administration to address U.S. reliance on imported pharmaceuticals.
The announced tariffs followed a Section 232 investigation that found the U.S.’ heavy reliance on imported drugs and ingredients threatened national security and public health in the event of disruptions.
The Trump administration has launched additional Section 232 investigations in adjacent sectors, including personal protective equipment, medical consumables and medical equipment and devices.
