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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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<p>On June 18, 2026, the Office of the U.S. Trade Representative (USTR) announced that it was launching an <a href="https://ustr.gov/sites/default/files/files/Press/Releases/2026/Germany%20Pharma%20Section%20301%20Initiation%20FRN%206-18-26.pdf" target="_blank" rel="noreferrer noopener">investigation of Germany</a> under Section 301 of the Trade Act of 1974. The investigation will seek to determine &ldquo;whether persistent underpayment for innovative pharmaceutical products by Germany is unreasonable or discriminatory and burdens or restricts U.S. commerce.&rdquo;&nbsp;USTR Jamieson Greer said, &ldquo;President Trump has made clear that American patients should not be shouldering a disproportionate share of global pharmaceutical research and development&rdquo;, adding that &ldquo;our trading partners need to step up and start paying their fair share to fund innovative pharmaceutical research and development.&rdquo;</p>
<p>Under Section 301, actionable matters include acts, policies, and practices of a foreign country that are unreasonable or discriminatory and burden or restrict U.S. commerce.&nbsp;The&nbsp;<em>Federal Register</em>&nbsp;notice announcing this Section 301 investigation indicates the focus will be on the extent to which Germany engages in actions &ldquo;that have the effect of suppressing the prices of pharmaceuticals in its market below fair market value, thereby forcing American patients to underwrite a disproportionate amount of global pharmaceutical R&amp;D.&rdquo;&nbsp;The notice alleges that &ldquo;U.S. consumers pay approximately 3.9 times as much as the prices consumers in Germany pay for brand-name drugs. Lower prices in Germany resulting from unreasonable pricing policies and practices reduce pharmaceutical companies&rsquo; incentives to innovate and, in turn, diminish their investment in R&amp;D. In contrast, higher U.S. prices support and fund global R&amp;D costs for innovative pharmaceutical manufacturers and, thereby, unfairly shift Germany&rsquo;s fair share of costs for pharmaceutical innovation onto U.S. patients and consumers.&rdquo;&nbsp;It also notes pending draft legislation in Germany that would impose rebates for patented medicines beginning in 2027.</p>
<h2 class="wp-block-heading">Investigation Timeline</h2>
<p>Upon initiation of an investigation, the USTR must first seek consultations with the countries or trade partners subject to the investigations. The USTR must also seek public comment and hold a hearing on the matter. Below is the current schedule:</p>
<ul class="wp-block-list">
<li>June 18, 2026: The USTR initiated the investigation.</li>
<li>June 25, 2026: USTR will open the docket for submission of written comments.</li>
<li>August 10, 2026, at 11:59 p.m. EDT: To be assured of consideration, written comments must be submitted.</li>
<li>September 22, 2026:&nbsp;A public hearing will be held in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington, D.C. 20436, beginning at 10 a.m. EDT.</li>
</ul>
<p>Interested parties should submit documents in response to this notice, including written comments, through the online USTR portal:&nbsp;<a href="https://comments.ustr.gov/s/" target="_blank" rel="noreferrer noopener">https://comments.ustr.gov/s/</a>&nbsp;on Docket No. USTR-2026 0463.&nbsp;Interested persons wishing to provide testimony at the hearing must submit a notification of intent and summary of testimony through the same online portal on Docket No. USTR-2026-0464.</p>
<h2 class="wp-block-heading">Request for Public Comments</h2>
<p>Interested parties are invited to submit written comments on any issue covered by the investigation. The USTR particularly requests comments regarding:</p>
<ul class="wp-block-list">
<li>The acts, policies, and practices described in the Notice of Initiation of the investigation..</li>
<li>Information on other acts, policies, and practices of Germany related to persistent underpayment for innovative pharmaceutical products.</li>
<li>Whether the acts, policies, and practices of Germany are unreasonable or discriminatory.</li>
<li>Whether the acts, policies, and practices of Germany burden or restrict U.S. commerce, and if so, the nature and level of burden or restriction on U.S. commerce.</li>
<li>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.</li>
<li>The extent to which Germany&rsquo;s unreasonable acts, policies, and practices relating to pricing for innovative pharmaceutical products, including through the means and tools described in the Notice of Investigation, result in the United States paying a disproportionate share of global R&amp;D costs for innovative pharmaceuticals.</li>
</ul>

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

Partner

David M. Schwartz

Samir D. Varma

International Trade

USTR Launches Section 301 Investigation into Germany’s Underpayment for Pharmaceutical Products