EXCLUSIVE: Sen. Tim Sheehy introduces bill to fight foreign drug price manipulation, target Germany’s “freeloading”

Sen. Tim Sheehy (R., Mont.) is introducing legislation Wednesday aimed at ending the practice of foreign governments forcing American patients to shoulder the cost of developing new medicines while paying artificially low prices themselves.

The Washington Reporter has learned that Sheehy’s “Use Sovereignty to Reduce Rx Act”, or USTRx Act, would establish a new pharmaceutical trade negotiator at the Office of the U.S. Trade Representative, require annual reports exposing foreign drug pricing abuses, and create a framework for the United States to respond when high-income countries use price controls that discriminate against American innovation.

Sens. Ted Budd (R., N.C.) and Dave McCormick (R., Pa.) will be joining Sheehy in introducing the legislation. Rep. Jodey Arrington (R., Texas) is leading companion legislation in the House.

The legislation comes as the Trump administration has already intensified its scrutiny of Germany’s pharmaceutical pricing practices. As the Washington Reporter previously reported, U.S policymakers are expressing growing concern towards Germany that the country’s pricing system systematically undervalues innovative American medicines and shifts research costs onto U.S. consumers.

Sheehy has also been outspoken on the issue, as well on the need to reduce costs for Montana families. 

“Europe has been freeloading off of our defense and drug industry for years,” Sheehy previously told the Washington Reporter. “Germany needs to pay their fair share so we can bring prices down for American consumers.”

The bill states that “pharmaceutical price controls in foreign markets distort global trade flows and competition by depressing the prices of innovative drugs and exploiting pharmaceutical innovations researched and developed in the United States.”

The bill further concludes that those policies “unduly rel[y] on United States patients and taxpayers to finance global pharmaceutical innovation” and argues foreign governments should bear a fairer share of the cost of developing lifesaving medicines.

At the center of the proposal is the creation of a Chief Pharmaceutical Trade Negotiator within USTR.

The legislation directs that official to conduct trade negotiations involving U.S. pharmaceutical products, enforce existing trade agreements, and take action against policies adopted by high-income countries that significantly harm American pharmaceutical manufacturers’ ability to obtain full market access overseas.

The bill also requires USTR to publish an annual report reviewing the pharmaceutical pricing and reimbursement policies of high-income countries.

Among other findings, the report would determine whether foreign governments maintain pricing systems that are not fair, transparent, or market-based, deny reciprocal market access to American products, reduce incentives for pharmaceutical innovation, or impose unreasonable or discriminatory restrictions on U.S. commerce.

If those practices are identified, the legislation requires USTR to submit a response plan to Congress within 30 days that could include opening a formal Section 301 investigation under the Trade Act.

Senate Republicans say the proposal reflects Sheehy’s growing role inside the Conference on complex economic and trade issues.

“Tim has quickly earned a reputation as someone who digs into policy problems and produces serious legislation,” a Senate Republican leadership aide told the Washington Reporter. “This bill is carefully drafted, it addresses a problem that Republicans and many Democrats acknowledge exists, and it has a real chance to become law. Sheey is a work horse, not a show horse, although to his credit, he also gets the good politics of all of this.”

In announcing the legislation, Sheehy argued the current system rewards foreign governments while placing the financial burden on American families.

“America leads the world in developing lifesaving medicines, but for too long, foreign governments have gamed the system with price controls that force hardworking Americans to pick up the tab for these drugs,” Sheehy said. “That’s not free trade. It’s freeloading. The USTRx Act will hold trading partners accountable, protect American innovation, and put our patients and taxpayers first.”

The Coalition for Affordability and Prosperity, one of the leading conservative organizations in Washington, fully endorsed the legislation.

“We are grateful to Senator Sheehy for leading on an issue that directly affects every American patient,” a Coalition for Affordability and Prosperity spokesperson told the Washington Reporter. “For years, foreign governments have shifted the cost of pharmaceutical innovation onto American families while benefiting from medicines developed here. The USTRx Act takes meaningful steps toward correcting that imbalance. If enacted, it would help lower drug costs for Americans while encouraging the innovation and healthcare choices that patients depend on.”

The legislation builds on growing Republican efforts to use U.S. trade policy to challenge foreign governments that rely on American pharmaceutical research while maintaining price control systems that many conservatives argue undervalue innovation and discourage the development of future treatments. For Sheehy, it is another sign that the freshman senator is emerging as an influential voice on both trade and healthcare policy inside the Senate Republican Conference.