Section 301, Germany's Drug Pricing Reform and Global Pharma

A new operating environment

Global pharma companies face overlapping US and European policy pressure in 2026, and their responses vary by portfolio and market exposure. In Germany, a new law raises the mandatory manufacturer rebate on patent protected medicines to 15.5%.^[2] In the United States, the Office of the US Trade Representative (USTR) is investigating whether Germany's pricing practices unfairly undervalue innovative medicines and burden US commerce, while new tariffs and the CMS GLOBE model add trade and Medicare pricing measures.^[1][8][13] At EU level, the Biotech Act and the pharma package aim to make Europe more competitive for biotechnology, clinical research and manufacturing.^[11][14]

On 22 September 2026, the chairs of AstraZeneca, Boehringer Ingelheim, Chiesi, Ipsen, GSK, Novo Nordisk, Novartis, Roche and Sanofi published an open letter warning that Europe is losing ground in pharmaceutical investment to the United States and China.^[15][16] The policies differ in purpose and mechanism, yet they reach the same companies. The useful question for those companies is how the combined effect shapes pricing, launches, investment, clinical development and manufacturing.

The policy context

Germany: a higher manufacturer rebate

Germany's GKV contribution rate stabilization law (GKV Beitragssatzstabilisierungsgesetz) raises the statutory manufacturer rebate on patent protected medicines from 7% to 15.5% from 1 January 2027.^[2][3] The Bundestag passed the law on 10 July 2026 and it entered into force on 30 July 2026.^[3][21] It also raises the rebate on patented vaccines, adds a price moratorium for those vaccines, and creates a pilot for exclusive rebate contracts in five drug classes that runs until the end of 2030.^[3]

In its press release, the Federal Ministry of Health said the fixed 15.5% rebate replaced a dynamic rebate planned earlier, to give companies planning certainty.

Germany: a proposed location clause

Germany may soften the rebate for companies with a strong local footprint. On 29 September 2026, an expert panel chaired by Michael Vassiliadis and Michael Hüther handed the health and economy ministries a proposal for an extended location clause.^[4] Entry would require clinical research in Germany, with at least 2% of participants in Phase I to III trials at German sites over three years, rising to 4%. Companies could then cut the additional rebate by 2 points for collectively agreed jobs, 3 points for research and development in Germany and 3.5 points for substantial investment or production, and meeting all three would return the rebate to 7%.^[4][5] As of 22 October 2026, the legal basis for the extended clause did not yet exist.^[17]

United States: Section 301, tariffs and GLOBE

USTR opened a Section 301 investigation on 18 June 2026 into Germany's "persistent underpayment" for innovative pharmaceutical products.^[1] The inquiry examines whether Germany's acts, policies and practices are unreasonable or discriminatory and burden US commerce.^[22] USTR held a public hearing on 22 September 2026, and its investigation page lists no determination or action.^[6][7]

Section 301 sits alongside other US pricing tracks. By 18 September 2026, the White House said it had MFN pricing agreements with 26 manufacturers covering 89% of the branded drug market.^[24] USTR's release opening the Germany investigation points to the arrangement on pharmaceutical pricing that the United States and the United Kingdom announced on 2 April 2026 as a step Germany could follow.^[1]

Two further US measures took effect or were finalized in late September 2026. A Section 232 proclamation of 2 April 2026 set a 100% tariff on patented pharmaceuticals, in force from 31 July 2026 for companies listed in its Annex III and from 29 September 2026 for other companies. Products of the EU face 15% unless a lower rate applies; companies elsewhere with approved US onshoring plans face 20%, rising to 100% on 2 April 2030; and companies with an HHS most favored nation (MFN) pricing agreement and an onshoring plan pay no tariff until 20 January 2029.

Specified product groups, including orphan only drugs, plasma derived therapies, cell and gene therapies and antibody drug conjugates, are at zero when they come from eligible partners, and a Commerce notice of 23 September 2026 lists the EU, the UK, Switzerland and Japan among them; other UK products pay 10%.^[8][18]

On 30 September 2026, CMS finalized the GLOBE model, which from 1 January 2027 tests an international price benchmark for rebates under the Medicare Part B inflation rebate program. CMS expects only four manufacturers to be required to participate and intends to waive participation for manufacturers in the GENEROUS Medicaid model.^[13][19] For companies selling in Europe, GLOBE adds a further US mechanism that compares US prices with prices paid in other countries.

European Union: reforms beyond price

EU policy is focused on competitiveness as well as reimbursement. The European Commission proposed the Biotech Act on 16 December 2025 to simplify regulation, mobilize investment and support biotechnology and biomanufacturing.^[14] It would cut the review of multinational clinical trial applications from 106 to 75 days, and to 47 days where no further information is requested from the sponsor.^[20]

The EU pharma package, agreed provisionally in December 2025, moved forward when the Council adopted its first reading position on 28 September 2026; the European Parliament's final vote is still pending.^[11]

How companies are responding

Companies are combining public advocacy, investment decisions, launch planning and policy engagement, in proportions that depend on portfolio, lifecycle, market exposure, pricing structure and clinical footprint.

Making the competitiveness case

The September open letter is the clearest collective statement so far. Its signatories link Europe's ability to retain investment to faster clinical trials, strong intellectual property protection, sensible digital policy and support for innovation from research through to patient access.^[15]

The chairs also cite more than $600 billion in pharmaceutical investment announced in the United States and China over the past two years, and ask governments to act quickly, including on clinical trials in Europe.^[15] Their argument echoes wider advocacy from EFPIA, the European Federation of Pharmaceutical Industries and Associations, which links clinical trial speed and investment.^[25]

Bringing investment decisions into the public debate

Several companies have tied German investment plans to the policy outcome. In a letter to Chancellor Friedrich Merz reported in June 2026, Pfizer CEO Albert Bourla said the company was reviewing planned German investments.^[26][27] Eli Lilly said in June 2026 that it would halve its planned €2.3 billion investment at Alzey, and Boehringer Ingelheim cut €900 million from planned German investments for 2027 to 2030.^[9][28] In October 2026, Roche said it had put all future investment decisions in Germany on hold.^[10]

These are company specific decisions and do not measure investment across the sector.

Making launch conditions more visible

Launch timing in Europe is now part of the public discussion. Reuters reported in March 2026 that some drugmakers were delaying European launches while assessing US pricing policy and international reference price exposure.^[29] In April 2026, AstraZeneca CEO Pascal Soriot told a German newspaper that Germany risked missing out on new drugs if it pressed ahead with spending limits.^[30]

These statements do not show that launches will be delayed everywhere. They do show companies linking a market's attractiveness to reimbursement, pricing and access, and linking access to the speed of research and development.

Pricing and contracting

Germany's reform changes the economics of patent protected medicines directly through the higher rebate, while the Section 301 investigation puts Germany's pricing framework into a formal US debate about whether overseas markets pay a fair share of innovation costs.^[1][2] Public disclosures do not yet show a common pricing or contracting response. In our reading, the visible change is closer attention to the link between German net prices, rebates, international reference pricing and the attractiveness of European launches. The effect will vary by product, portfolio and local reimbursement terms.

Engaging through live policy processes

Companies and trade associations are shaping policy while it is still open. They took part in the USTR comment and hearing process and can engage with Germany's Pharma and MedTech Dialogue and EU work on the Biotech Act and pharma package.^[6][7] Germany launched its dialogue at the Federal Chancellery on 12 November 2025 to discuss conditions for innovation, production and investment.^[31] PhRMA publicly supported the Section 301 investigation, and the nine chairs called for changes to Europe's innovation environment.^[15][23]

Milestones to watch

The next phase will be shaped by implementation more than by statements of intent. These are the milestones to track.