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Edited by: Sean Sinico

The United States has launched an investigation into Germany to determine whether there has been underpayment for innovative pharmaceutical products affecting trade in the US.

"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," said US Trade Representative Jamieson Greer.

He said the investigation under Section 301 of the Trade Act of 1974 came after "months of meaningful discussions with our German partners in an effort to resolve this issue."

What else did Greer say?

"President Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development," said Greer.

"I am particularly concerned with news that Germany is fast-tracking legislation that would further reduce its spending on innovative pharmaceuticals," Greer said.

He said this was 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 said his office would open a docket for submission of written comments on June 25, ​and its Section 301 Committee would hold a public hearing on the probe in ​September.

US pharmaceutical prices are ranked among the highest in the world.

A RAND Corporation report from 2024 found that prescription drug prices in the US were significantly higher than in other countries, with prices averaging 2.78 times more than those seen in 33 other countries. The report found that the pricing gap was far larger for brand-named drugs.

Germany trying to plug healthcare funding gap

In April, the German Cabinet greenlit a healthcare draft law, which Chancellor Friedrich Merz called "historic."

The reforms are aimed at lowering insurance premiums by saving more than €16 billion, but the measures have already ruffled feathers with investors.

Earlier in June, US pharmaceutical company Eli Lilly announced it would halve its original planned investment of €2.3 billion ($2.7 billion) in Alzey, Rhineland-Palatinate.

The company cited the German government's healthcare reforms in its decision to slash investment.

Meanwhile, Reuters news agency reported on Monday that the German government was replacing plans to introduce variable discounts on pharmaceutical products, citing a government source.

The federal Health Ministry said nothing had been decided as yet and declined to comment further ​on any "parliamentary deliberations," the agency reported.

Edited by: Sean Sinico

(Disclaimer: This report first appeared on Deutsche Welle, and has been republished on ABP Live as part of a special arrangement. Apart from the headline, no changes have been made in the report by ABP Live.)