Washington opened a Section 301 trade probe on Germany Thursday, accusing Berlin of keeping new drug prices artificially low. The U.S. Trade Representative says the investigation will assess whether German policies “unreasonably” suppress prices of innovative pharmaceuticals, a move that could trigger tariffs on American medicines exported to the EU. Public comments are due in August, with a hearing slated for September.

Berlin passed legislation in April to curb drug costs, arguing that stagnant growth demands tighter budgets. U.S. officials, led by Trade Representative Jamieson Greer, dismissed the reforms as a “serious step backwards,” noting American patients pay nearly four times what Germans pay for brand‑name drugs. Pfizer chief Albert Bourla warned the cuts could jeopardize the company’s German investments and pipeline.

Industry leaders including AstraZeneca CEO Pascal Soriot have signaled that insufficient pricing incentives may force firms to delay or cancel launches of new therapies in Europe. The administration has urged Germany to emulate the UK’s recent pledge to boost spending on medicines by billions over the next decade. The probe adds pressure on Berlin as it balances restraint with need to retain drug pipelines.