The Office of the U.S. Trade Representative announced June 18 the initiation of a Section 301 investigation that could lead to the imposition of additional tariffs on imports from Germany.
The new investigation will examine whether Germany’s “persistent underpayment for innovative pharmaceutical products” is unreasonable or discriminatory and burdens or restricts U.S. commerce. USTR noted that although the means and tools for payment disparities for innovative pharmaceuticals vary, they may include the imposition of supplemental discounts in exchange for confidentiality of negotiated prices and mandatory variable rate rebates. USTR Jamieson added that he is “particularly concerned with news that Germany is fast-tracking legislation that would further reduce its spending on innovative pharmaceuticals,” which 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 will hold a hearing in connection with this investigation on Sept. 22. Requests to appear at this hearing, summaries of any testimony, and all other written comments are due by Aug. 10. Click here for a list of issues on which comments are sought.
While previous Section 301 investigations have resulted or may yet result in additional tariffs on imports from targeted countries, U.S. officials appeared to hold out the possibility that this may not happen in this case. Health and Human Services Secretary Robert F. Kennedy Jr. noted that the U.S. negotiated with the United Kingdom earlier this year a pharmaceutical arrangement “that will help drive investment and innovation in both countries,” and he called on Germany to “follow suit with constructive negotiations.” USTR Jamieson Greer expressed confidence that the U.S. and Germany “can find a path forward that expands access to the most innovative drugs for the German people while ensuring fair reimbursement for the pharmaceuticals made by American workers.”
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