Why does the USTR say the US pays a disproportionate R and D cost?

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The US Pays a Disproportionate Share of Global Pharmaceutical R&D Costs Due to Germany's Pricing Policies

The United States Trade Representative's (USTR) office states that the US bears a disproportionate share of global research and development (R&D) costs for innovative pharmaceuticals. This situation is attributed to Germany's pharmaceutical pricing policies and practices, which the USTR contends lead to persistent underpayment for these products. Such practices are considered potentially unreasonable or discriminatory, ultimately burdening or restricting US commerce.
Germany's Pricing Policies Under Scrutiny

The USTR has initiated an investigation into Germany's pharmaceutical pricing policies and other related practices. This probe, launched under Section 301 of the Trade Act of 1974, aims to determine if Germany's approach to pricing innovative medicines is unfairly impacting US commerce. Evidence suggests that Germany implements pricing policies and practices that are considered unfair concerning innovative pharmaceutical products.
Impact on R&D Investment and Revenue

The investigation posits that the reduced revenue Germany generates from its pharmaceutical pricing practices appears to contribute to diminished investment in research and development. This reduction in investment by one of the major global markets consequently shifts a larger portion of the R&D cost burden onto other nations, specifically the United States.
Concern Over Further Legislative Reductions

USTR Jamieson Greer has voiced concerns regarding Germany's intentions to expedite legislation that would further decrease its expenditure on innovative pharmaceuticals. This potential legislative action is seen as exacerbating the existing issue of disproportionate R&D cost-sharing. The USTR's office is currently receiving public comments and plans to hold a hearing in September as part of this ongoing investigation.

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Why does the USTR say the US pays a disproportionate R and D cost?

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