US decries the ‘free ride’ countries with public health systems are getting by negotiating deals for prescription drugs The Trump administration has launched an investigation into Germany’s pharmaceutical pricing, claiming that “persistent underpayment” for drugs is forcing…
ericans 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 Read That’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).