The US Trade Representative has initiated a Section 301 investigation into Germany’s drug pricing rules, alleging “persistent underpayment” for innovative medicines. For US importers, the bigger issue is that it threatens a third tariff layer on German pharma imports, on top of duties already in motion.
What USTR is targeting: Germany's AMNOG system negotiates lower prices for patented drugs after a benefit review. USTR has raised two concerns. One is supplemental discounts tied to keeping negotiated prices confidential. The second is a draft 2026 law, GKV-BStabG, that would add mandatory rebates from 2027, starting near 3.5% before moving to a variable rate. The Bundestag is due to vote before its summer recess.
Ambassador Jamieson Greer said Germany must “start paying their fair share.” USTR says US consumers pay roughly 3.9 times more than German consumers for brand-name drugs.
The three-layer problem: This probe does not replace duties already moving toward German pharma. Three mechanisms could now stack:
The EU-US trade deal caps most EU goods, including pharmaceuticals, at 15% with "no stacking"
A Section 232 action imposes tariffs of up to 100% on patented drugs and APIs, starting July 31 for most companies, and September 29 for the 17 named Annex IV firms Generics and biosimilars are excluded
A Section 301 finding, if issued, would add another layer
How the 15% ceiling squares with the Section 232 rate is unresolved. Washington treats Section 232 as a separate national-security authority. Bayer, Boehringer Ingelheim, and Merck KGaA are among the German companies with significant US exposure.
What's next: A Section 301 review typically takes 12 to 18 months. USTR has asked Germany for consultations, set an August 10 deadline for comments, and scheduled a September 22 hearing at the USITC. No product list or tariff rate has been published.
“For now, this is only an investigation,” said Pete Mento, a trade advisor at Baker Tilly. “No tariffs have been announced, and no product lists have been published.”
USTR has pointed to the US-UK trade agreement as the model. British pharma received zero tariffs in exchange for pricing concessions. PhRMA has named Japan, France, and Canada as the next likely targets.
