The United States has launched a formal trade investigation into Germany under Section 301 of the Trade Act of 1974, citing concerns that Berlin’s efforts to cut spending on medicines could unfairly burden American patients and pharmaceutical companies.
U.S. Trade Representative Jamieson Greer announced the probe on June 18, 2026, expressing alarm over Germany’s decision to fast-track legislation that would further reduce payments for innovative drugs. He noted that President Trump has made it clear American patients should not continue to shoulder a disproportionate share of global pharmaceutical research and development costs, adding that trading partners must pay their fair share to support the discovery of new medicines.
“I am particularly concerned with news that Germany is fast-tracking legislation that would further reduce its spending on innovative pharmaceuticals,” Greer said. He described the German move as a serious step backwards and pointed to the recent U.S.-U.K. arrangement, under which Britain agreed to higher prices for new drugs through its National Health Service in return for tariff exemptions on medicines, as a model Germany could follow through constructive negotiations rather than unilateral action.
Greer added that U.S. trading partners must pay their fair share to fund research into new medicines, and that the investigation comes after months of discussion with German partners.
The US investigation comes after Germany planned to overhaul the healthcare system in April 2026, when the Health Ministry proposed a broad reform of the statutory health insurance system to close a projected funding gap of around 20 billion euros. The plan included higher and variable discounts that pharmaceutical companies would have to offer public insurance funds, along with other cost-containment measures aimed at lowering overall drug expenditure amid steadily rising healthcare demands.
Although the original draft is being revised after it faced strong opposition from the industry, the overall objective remains. The German government has continued to push elements of the legislation through parliament, with the explicit goal of curbing spending on innovative treatments and easing pressure on public finances. Now, instead of variable discounts as planned earlier, German govt is set to introduce discounts at fixed levels, so that the companies can plan ahead. Under the original plan, the companies would have been obliged to offer price discounts that would vary depending on the country’s overall expenditures for drugs and on revenues of the healthcare system.
German govt has strongly reacted to the American probe into the legislation, making it clear that it is their own sovereign matter. German Chancellor Friedrich Merz responded to the probe on June 19 by stating that if the United States sought information on the matter, Germany would be happy to provide it, while making clear that decisions on medicine reimbursements remain a matter of national jurisdiction.
He also expressed the expectation that Washington would continue to honour the existing trade framework between the United States and the European Union.
Notably, several major drugmakers operating in Europe, including AstraZeneca, Novartis, Roche and Boehringer Ingelheim, have warned that if prices in Germany fall too low or if the gap with U.S. prices widens excessively, companies may delay or even withhold the launch of new innovative medicines in the country, potentially leaving patients without access to advanced therapies.
The Section 301 investigation will open a docket for public comments on June 25 and hold a hearing in September, after which the United States could impose tariffs on German imports if it determines the practices are unreasonable or discriminatory.
The probe comes amid President Trump’s efforts to curb drug prices in the US. He has called to “end global freeloading,” referring to the higher prices in the U.S. compared to other comparable countries, including in Europe. He claims that by paying higher prices, American consumers are subsiding people in other countries where the prices are lower. The administration has also reached agreements with 17 of the largest pharma companies in the world to voluntarily lower drug prices in the U.S. in exchange for tariff exemptions.
