Overview
- The U.S. Trade Representative formally opened a Section 301 investigation on June 18 to examine alleged “persistent underpayment” by Germany for innovative pharmaceuticals and whether those practices burden U.S. commerce.
- Section 301 gives the USTR authority to seek remedies including tariffs or trade restrictions if it finds foreign practices are unreasonable or discriminatory, a tool the office has used in recent probes of multiple trading partners.
- The investigation follows months of talks and Germany’s April healthcare reform proposals to cut insurer drug spending, a move that prompted warnings from industry and led Eli Lilly to halve a planned €2.3 billion investment.
- Germany’s health ministry has confirmed talks with Washington while Health Minister Nina Warken has said higher drug prices are difficult because of strained statutory health insurance finances.
- The USTR will open a written-comments docket on June 25 and hold a public hearing in September as the interagency Section 301 Committee reviews evidence, leaving weeks of uncertainty for investors, patients, and transatlantic trade ties.