Germany is exploring a potential drug pricing proposal with the Trump administration in a bid to stave off the threat of U.S. tariffs.
U.S. President Donald Trump believes lower drug prices in Europe are effectively subsidized by the higher cost of medicines in the U.S. and has threatened to impose additional tariffs unless European prices rise.
Berlin is under increasing pressure to pay more for medicines after the U.S. launched a Section 301 trade probe in June, alleging Germany persistently underpays for innovative pharmaceutical products. A hearing for the investigation will take place on Sept. 22, after which the investigation could pave the way for new tariffs targeting German industry.
Berlin is now considering what kind of proposal it can bring to Washington after senior German government officials visited their counterparts this summer, three individuals with knowledge of negotiations, including a former official from the U.S. Trade Representative’s office, told POLITICO. All were granted anonymity to share details of the private talks.
The Trump administration has used the threat of tariffs to pressure the EU and its members to adopt policies that favor the U.S. EU countries’ public health systems have strict pricing controls to limit spending on medicines. Higher prices would further strain already stretched health budgets.
Any deal between Germany and the U.S. on pharma — particularly on drug pricing — would also mark a significant shift away from Berlin’s previous insistence that its pharmaceutical policies were not America’s concern.
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