US launches investigation into Germany's pharma policies over drug pricing

The U.S. has launched an investigation into Germany's pharma policies over what it referred to as "persistent underpayment" for medicines as the European country looks to limit spiraling healthcare costs, including spending on drugs.

"President Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development," said U.S. Trade Representative Jamieson Greer in a statement late Thursday.

"I am particularly concerned with news that Germany is fast-tracking legislation that would further reduce its spending on innovative pharmaceuticals," he said, calling it "a serious step backwards."

In April, Germany proposed overhauling its health insurance system to reduce pressure on public finances, as health spending has increased substantially in recent years.

It introduced a range of cost-saving measures, including higher discounts for insurance funds from the pharma industry, prompting numerous drugmaker executives to warn that they might withdraw or delay new medicines in the country.

The draft legislation is currently going through parliamentary processes.

The U.S. investigation was initiated under Section 301 of the Trade Act, which allows unilateral action against countries with unfair practises that burden U.S. commerce.

Greer said that U.S. trading partners must pay their fair share to fund research into new medicines, and that the investigations come after months of discussion with German partners.

The Trump administration last year introduced the so-called Most Favored Nation drug policy, or MFN, that ties the prices of medicines in the U.S. to lower ones abroad.

The German Health Ministry didn't immediately respond to a request for comment.