Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTVawn HimmelsbachWed, June 24, 2026 at 6:23 PM GMT+2 6 min readThe Trump administration has launched an investigation into Germany’s pharmaceutical pricing, claiming that “persistent underpayment” for drugs is forcing Americans to subsidize research and development (R & D) globally. And it’s threatening to impose tariffs if those pricing practices are deemed unfair.In most developed countries, drug prices are set or negotiated by the government. In the U.S., pharmaceutical companies set the prices, based more on what the private market can bear.Must ReadRobert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — here are 5 ways to build wealth like a landlord without actually being oneMillionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually goingThat’s created a situation where unbranded generic drugs (about 90% of prescriptions in the U.S.) cost on average 2.78 times higher in this country than in 33 other OECD nations, according to a 2024 RAND report. For brand-name drugs, that gap is even higher, at 4.22 times what other nations (1)pay (1).Now, the U.S. wants Germany to follow in the footsteps of the U.K., which recently struck a deal that — in exchange for tariff exemptions — will see the country pay more for new drugs.But America’s “most favored nation” policy framework “incorrectly deflects blame for high American prices to other countries,” according to the Center for Global (2)Development (2) (CGD).Government purchasers in the US could use the power of monopsony (being a single buyer) to lower prices for current drugs, and could set up incentives to keep future drugs affordable too, CGD writes, adding the country could “look at ways to rein in pharmaceutical company marketing and patent evergreening strategies.”Here’s why the issue is so complicated, and what you can do to lower your bill — despite the larger political issues at play.What’s happening in EuropeIn April, the U.K. government agreed to a deal with the U.S. that would see that country increase spending on drugs to avoid U.S. tariffs.It hasn’t exactly gone over well with the public. This “geopolitical game” risks “sabotaging our carefully worked-out mechanism for keeping a lid on big pharma’s overinflated prices, and they have done so without so much as a debate in parliament,” Nick Dearden, director of Global Justice Now, told The (3)Guardian (3).Global pharmaceutical companies, for their part, are threatening to pull investment to pressure policymakers in Europe. And Germany is next on the list (4).Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info