France in talks with US to avoid drug pricing trade probe

Full text

France and other countries are in discussions with U.S. officials to avoid new trade investigations into their pharmaceutical pricing practices, U.S. Trade Representative Jamieson Greer said Tuesday.

The Office of the U.S. Trade Representative last month launched an investigation into Germany’s drug pricing policies under Section 301 of the Trade Act of 1974, which gives the president the authority to levy tariffs in response to unfair trade practices.

The U.S. has told other countries they could face similar fates, spurring discussions over possible off-ramps, Greer said in an interview Tuesday.

“I said, ‘Hey, we have a 301 waiting in the wings,’” Greer said. He stressed, however, that the U.S. would “rather have an agreement.”

The U.S. has already secured a commitment from the United Kingdom to pay more for drugs. In April, the two governments reached a deal that will see Britain raise pharmaceutical spending, as well as scale back the rebates the National Health Service can claw back from drug manufacturers.

The Trump administration is hoping the threat of higher tariffs will prompt other governments to follow.

“We’re having conversations with the Germans right now, which are challenging, but we’re having them,” Greer said. He added that the U.S. has had talks on the issue with French officials as well as other governments.

“I’d rather not do 301s on them, but we will if we have to,” Greer said. Greer also listed Australia as another country that could be a target for a Section 301 probe into drug pricing.

“We just want to have appropriate burden sharing,” Greer said.

European nations have warned the U.S. not to let its fervor over drug pricing derail a U.S.-European Union trade deal inked last year. Under the terms of the deal, signed in Turnberry, Scotland, the U.S. pledged to cap tariffs on many EU products at 15 percent.

“The transatlantic relationship will continue to remain volatile,” Matthias Jørgensen, the Commission’s top trade official on U.S. relations, told EU lawmakers on Tuesday morning. “We have seen recent actions of the U.S. toward individual member states on digital services taxes, as well as the launch of a Section 301 investigation on pharmaceutical pricing. While this investigation currently concerns only Germany, investigations involving other member states cannot be ruled out.”

View from Congress: Foreign pharmaceutical pricing practices have garnered attention from lawmakers on Capitol Hill in recent months, as well. A group of Senate Republicans last month urged senior administration officials to use Section 301 investigations to secure commitments from trading partners to spend more on U.S. drugs.

They also singled out Japan for not paying its fair share of pharmaceutical research and development costs.

Camille Gijs contributed to this report.