The US has launched a trade investigation into Germany over claims of the country’s unfair drug pricing practices, escalating a transatlantic dispute with the EU’s biggest pharmaceutical market.
On Thursday evening, US Trade Representative Jamieson Greer announced that Washington would launch a so-called Section 301 investigation into Berlin. The probe allows the Office of the US Trade Representative to pursue unilateral action against countries that impose “unfair” trade barriers.
“President Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development,” said Greer.
He added that he was “particularly concerned with news that Germany is fast-tracking legislation that would further reduce its spending on innovative pharmaceuticals,” referring to a package of healthcare reforms, including a cut in drug spending despite objections from the pharmaceutical industry.
Balancing act
It comes as Washington and Berlin officials have been in talks for months, with Germany committed to cutting its rising costs.
Previous reports suggest that the US has been discussing with Germany whether it should pursue a similar trade deal to that struck with the UK, which boosted the net price that its National Health Service (NHS) pays for novel treatments by 25% in exchange for tariff cuts.
“Germany should follow suit with constructive negotiations to address this imbalance,” said Greer.
The German innovative pharma trade group, vfa, said it is currently waiting for further clarification from US authorities. “A final assessment is not possible at this time,” a spokesperson told Euractiv, adding that they were waiting to see the scope of the investigation.
But the path ahead for the US could be legally difficult to pursue, since the EU has already struck a trade deal with Washington, which should enter into force on 29 September and introduce a flat 15% tariff rate on innovative pharmaceuticals.
EU spokesperson Olof Gill told Euractiv that they “continue to engage with the US in the clear expectation that they will fully uphold their commitments under the EU-US Joint Statement.”
Pressure mounting
Separately, Berlin has been in discussions with other EU countries, like Sweden, on how to respond to Washington’s trade threats.
Germany’s Health Minister Nina Warken said in Luxembourg this week that the country’s statutory health insurance system faces a “strained financial situation”, which would make it difficult to pay higher prices, but that she was dedicated to having “constructive” talks with the US.
Pharma lobbies, however, are already pressing German officials to scrap some of their planned cost-cutting measures, such as “dynamic” manufacturer discounts.
Currently, companies must repay 7% of the price of every package of patented medicine sold. The reform would retain that 7% rebate while introducing an additional charge that would rise or fall depending on the finances of Germany’s statutory health insurers.
Pfizer’s CEO Albert Bourla recently penned a letter to Chancellor Friedrich Merz stating that the pricing reforms are threatening “predictability” for long-term investments in the country.
Trade group vfa stressed on Friday that they would like Warken to take action soon. “It is important that the German government quickly seek talks with the US government to remove barriers and provide planning certainty,” a spokesperson said.
(bms, aw)
The article has been updated to include a comment from an EU spokesperson
Source:
www.euractiv.com