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19 June 2026

USTR initiates Section 301 investigation into Germany pharmaceutical pricing practices; hearing scheduled and comments requested

  • On 18 June 2026, the United States Trade Representative initiated an investigation under Section 301 of the Trade Act of 1974 (Section 301) into Germany's pharmaceutical pricing policies.
  • The investigation will evaluate whether Germany's acts, policies and practices are unreasonable or discriminatory and burden or restrict United States (US) commerce, including by shifting a disproportionate share of global pharmaceutical research and development costs onto US consumers.
  • The inter-agency Section 301 Committee has announced a public comment process and hearing, with written comments and requests to appear due by 10 August 2026 and a public hearing scheduled for 22 September 2026.
  • This action may result in tariffs or other trade measures, with potential implications for the pharmaceutical sector and cross-border supply chains.
 

Executive summary

The United States Trade Representative (USTR) has initiated a Section 301 investigation into Germany's pharmaceutical pricing regime, reflecting increased scrutiny of foreign government measures that may affect the economics of innovation and global cost allocation in the life sciences sector. The investigation will assess whether Germany's pricing practices for innovative pharmaceutical products suppress prices below fair market value and result in United States (US) consumers bearing a disproportionate share of global research and development (R&D) costs.

The investigation follows earlier policy actions, including Executive Order 14297, issued on 12 May 2025, which directed US agencies to address foreign pricing practices that may shift the cost of pharmaceutical innovation onto US patients. The USTR subsequently solicited comments on global pharmaceutical pricing practices and their impact on US commerce. Based on available evidence, the USTR has identified concerns that Germany's pricing mechanisms may reduce pharmaceutical company revenues and discourage continued investment in innovation.

Key areas of review include:

  • German pricing structures and controls affecting innovative pharmaceutical products
  • Mechanisms linking pricing approvals to mandatory discounts and administrative cost payments
  • Legislative proposals introduced in Germany covering additional rebates for patented medicines, including variable rebate mechanisms tied to healthcare expenditure targets
  • Broader German policies that may reduce revenues for pharmaceutical manufacturers and discourage investment in innovation

The USTR has indicated that these practices may result in the US disproportionately funding global pharmaceutical R&D through higher domestic prices.

What this means for businesses

This investigation reflects the expanding application of Section 301 to nontraditional trade barriers, including healthcare pricing and reimbursement policies. For businesses operating in the pharmaceutical and life sciences sectors, the development introduces potential regulatory and commercial risks.

If the USTR determines that Germany's practices are actionable, potential measures could include tariffs or other trade restrictions affecting imports. More broadly, the investigation signals increased US focus on global pricing frameworks and cost allocation for innovation, which may have implications for pricing strategies, market access and investment decisions.

Request for public comments

The USTR invites comments on any aspect of the investigation, including:

  • Identified acts, policies and practices relating to pharmaceutical pricing in Germany
  • Whether these practices are unreasonable or discriminatory
  • The extent to which the practices burden or restrict US commerce
  • Whether the practices are actionable under Section 301 and what actions, if any, should be taken
  • The impact of Germany's pricing regime on global pharmaceutical R&D cost allocation

Key dates

  • 18 June 2026: Investigation initiated
  • 25 June 2026: Comment period opens
  • 10 August 2026 (11:59 p.m. ET): Written comments and hearing requests due
  • 22 September 2026: Public hearing (with continuation on 23 September 2026 if necessary)

Comment submission

Comments must be submitted via https://comments.ustr.gov/s/.

  • Investigation docket: The docket number for written comments is USTR-2026 — 0463.
  • Hearing docket: The docket number for requests to appear is USTR-2026 — 0464.

Actions to consider

Actions for businesses to consider depending on their specific situations, include:

  • Assess exposure to pharmaceutical supply chains and cross-border pricing arrangements involving Germany
  • Evaluate potential impacts of trade measures, including tariffs or other restrictions on sector-specific imports
  • Prepare and submit comments addressing commercial, pricing and innovation impacts and determine whether to participate in the public hearing
  • Monitor developments in the investigation, including potential determinations and responsive trade actions
* * * * * * * * * *
Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young LLP (United States), Global Trade

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

Document ID: 2026-1318

 
 

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