August 9, 2026
Ambassador Jamieson Greer
United States Trade Representative
600 17th Street NW
Washington, DC 20508
Re: Section 301 Investigation of Germany’s Pharmaceutical Pricing Policies — Docket
ID USTR-2026-0463
Dear Ambassador Greer,
I write today to voice my support of the United States Trade Representative’s decision to
initiate a Section 301 investigation into Germany’s pharmaceutical pricing policies. I submit
these comments in my personal capacity as a former Member of Congress who spent eight
years representing the working families of western Pennsylvania — men and women who
depended on good-paying manufacturing jobs, strong union benefits, and a government that
stood up for American workers on the world stage.
The Administration is right to act. For too long, wealthy foreign nations have depressed the
prices they pay for innovative American medicines, which has resulted in American patients,
workers, and businesses shouldering a disproportionate share of the global research and
development costs that produce the medicines the world depends on.
That is not free trade. It is freeloading — and it has gone on for far too long.
Germany’s Pricing Policies Result in U.S. Patients Paying a Disproportionate Share of
Global R&D Costs
Response to the Question #5: Please discuss the extent to which Germany’s unreasonable
acts, policies, and practices relating to pricing for innovative pharmaceutical products,
including through the means and tools described in Section I of the Federal Register notice,
results in the United States paying a disproportionate share of global R&D costs for
innovative pharmaceuticals.
Developing a single new medicine takes, on average, a decade of work and over $2 billion in
investment — with no guarantee of success.1 The United States has led the world in
accepting that risk and has built the most innovative biopharmaceutical sector on the planet.
But that leadership is not self-sustaining. It depends on a global marketplace that fairly
values American innovation.
Germany’s pharmaceutical pricing system — known as AMNOG — relies on government-
directed price negotiations and mandatory manufacturer rebates to significantly reduce what
German payers spend on innovative medicines. When manufacturers cannot earn adequate
returns in the German market, they become more dependent on U.S. revenues to recoup
their R&D investments. The United States, representing just four percent of the global
population, already accounts for the majority of global branded pharmaceutical revenues.2
That imbalance is the direct result of Germany’s pricing system that undervalues the
medicines its citizens use. Germany’s persistent underpayment for innovative medicines
shifts the financial burden of funding the next generation of cures disproportionately onto
American families and harms the American workers who develop and produce these
important technologies.
1 Deloitte. Measuring The Return on Pharmaceutical Investment. March 27, 2025. https://www.deloitte.com/ch/en/Industries/life-
sciences-health-care/research/measuring-return-from-pharmaceutical-innovation.html 2 IQVIA. IQVIA Early Bird: 2025 Revealed – The Trends Shaping Pharma’s Future. March 11, 2026.
I saw this dynamic firsthand representing Pennsylvania’s 4th Congressional District. My
constituents worked in industries that competed globally and understood what it meant when
foreign governments set the rules of the game against American workers. Unfair trade
practices cost jobs. They reduce investment. And over time, they erode the industrial
foundations that communities depend on.
The problem is compounded by recent legislation enacted by German lawmakers earlier this
summer to increase mandatory rebates from manufacturers on branded medications, which
would further erode the returns manufacturers can earn in Germany, deepening their
reliance on U.S. market revenues to sustain their pipelines.3 The burden on American
patients would grow accordingly.
American workers, particularly the skilled tradespeople who build and maintain the world-
class research, development, and manufacturing facilities that power our life sciences
sector, have a direct stake in the outcome of this investigation. When foreign freeloading
erodes the economics of life sciences innovation, it constrains domestic investment. Fewer
facilities get built. Fewer workers get hired. And the communities that would have benefited
from those jobs pay the price.
For all of these reasons, the Administration is right to pursue this investigation — and I urge
USTR to see it through.
Germany’s Practices Are Actionable — and a Negotiated Solution Is Within Reach
Response to the Question #4: Please discuss whether the acts, policies, and practices of
Germany are actionable under section 301(b) of the Trade Act, and what action, if any,
should be taken, including tariff and non-tariff actions.
Germany’s pharmaceutical pricing policies meet the standard for action under Section
301(b) of the Trade Act. They are the product of deliberate government policy, not market
forces. They are unreasonable in that they systematically suppress the returns that
American innovators can earn in a wealthy foreign market. And they burden U.S. commerce
by shifting a disproportionate share of global R&D costs onto American patients and
businesses. The case for action is clear.
But action does not have to mean escalation. The right remedy here is a negotiated
agreement — not punitive tariffs between two close allies. Germany is a sophisticated
trading partner with a shared interest in medical progress.
A constructive solution is achievable, and the Administration has already shown it can reach
one. Earlier this year, the U.S. reached an arrangement with the United Kingdom under
which the UK will commit to doubling its spending on new medicines by 2036.
4 This
demonstrates that our trading partners can be partners in sustaining life sciences innovation
rather than free-riding on it, and that the U.S. has the leverage to achieve such a
partnership.
Germany is a wealthy nation and a close ally. It has both the capacity and the obligation to
follow the UK’s lead and pay its fair share.
The burden of funding global pharmaceutical innovation cannot continue to fall
disproportionately on the United States. I encourage USTR to engage Germany in good-faith
3 Germany pushes through healthcare reform package despite pharma’s drug discount resistance. Fierce Healthcare. July 13, 2026.
4 Office of the United States Trade Representative. Successful Conclusion of the United States–United Kingdom Arrangement on
Pharmaceutical Pricing. April 2, 2026. https://ustr.gov/about/policy-offices/press-office/press-releases/2026/april/successful-
conclusion-united-states-united-kingdom-arrangement-pharmaceutical-pricing
consultations and to use every available tool to achieve an outcome that is fair to American
workers, American innovators, and American patients.
Thank you for your consideration of these comments.
Respectfully submitted,
The Honorable Ron Klink
Member of Congress from Pennsylvania’s 4th Congressional District (1993–2001)