South Korean pharmaceutical and biotechnology companies are on edge as U.S. President Donald Trump signals the introduction of tariffs on imported pharmaceuticals. Given that the U.S. is the world’s largest pharmaceutical market and S. Korea’s primary export destination, the imposition of such tariffs could significantly impact S. Korean firms.
Industry sources report that S. Korean pharmaceutical and biotech companies are closely monitoring the U.S. tariff situation and preparing response strategies. The United States, which accounts for 18% of S. Korea’s pharmaceutical exports, remains the country’s largest market. Last year, S. Korean pharmaceutical exports to the U.S. surged 50% from the previous year to approximately $1.5 billion.
Recently, President Trump announced plans to impose a 25% tariff on steel and aluminum imports, intensifying concerns within the S. Korean industry. In a press briefing on Jan. 31, President Trump said that imposing tariff barriers was the way to bring the pharmaceutical industry back to the United States, adding that tariffs would be applied to all forms of drugs and pharmaceuticals.
If the U.S. moves forward with pharmaceutical tariffs, S. Korean companies in the American market are likely to face higher production costs and possible disruptions in their supply chains.
In particular, companies like Celltrion and Samsung Bioepis, which export biosimilars to the U.S., are particularly vulnerable.
To date, Celltrion has received U.S. Food and Drug Administration (FDA) approval for five biosimilars, while Samsung Bioepis has secured approval for eight. Their main competitive advantages include lower prices compared to original drugs, trust from healthcare providers and patients, stable production and supply, and insurance coverage in major markets like the U.S. and Europe.
Celltrion sells autoimmune disease biosimilars such as Steqeyma and Yuflyma, as well as the anticancer drug Vegzelma, directly in the U.S. through its wholly owned subsidiary, CelltrionUSA. By bypassing intermediary distribution channels, the company can offer lower wholesale acquisition costs (WAC) and is expanding its direct sales system. However, the imposition of tariffs could weaken its price competitiveness.
In response, Celltrion has swiftly developed mid- to long-term strategies. The company has secured sufficient inventory to ensure a stable supply in the U.S. market through the third quarter of this year. If tariffs are applied, it plans to focus on exporting active pharmaceutical ingredients (APIs), which carry a lower tariff burden than finished products, and collaborate with U.S. manufacturers to produce finished products locally. Additionally, it is considering acquiring or establishing manufacturing facilities in the U.S.
Samsung Bioepis, meanwhile, has stated that, given the lack of concrete plans, it will monitor the situation before making any decisions. The company collaborates with U.S. partners like Organon, Sandoz, and Teva for distribution, sales, and marketing.
Companies exporting botulinum toxin products to the U.S., such as Daewoong Pharmaceutical and Hugel, are also bracing for potential impact. These S. Korean firms sell domestically developed Botox products at prices about 30% lower than those of U.S. pharmaceutical giant AbbVie. However, there is growing concern that tariffs could weaken this competitive edge.
SK Biopharm, which exports the epilepsy treatment cenobamate, is also assessing its options. The company produces cenobamate through a contract manufacturing organization (CMO) in Canada and exports it to the U.S. With U.S. sales steadily increasing, a tariff on Canadian imports could force SK Biopharm to consider alternatives, including switching to a different CMO.
Huh Hye-min, an analyst at Kiwoom Securities, noted that S. Korean biotech companies appear to be preparing to adjust their export prices to the U.S. in anticipation of potential tariffs. She added that since no official tariff plans have been announced yet, companies are being cautious about disclosing specific strategies.
However, some industry watchers believe that the U.S. will approach pharmaceutical tariffs more cautiously than in sectors like semiconductors and steel. The American Hospital Association (AHA), representing the U.S. healthcare system, recently sent a letter to Trump expressing concerns over potential drug shortages and price increases, urging the administration to exempt pharmaceuticals from tariff considerations.
The Biotechnology Innovation Organization (BIO) also issued a statement on Feb. 3, emphasizing that the biotech industry relies on a diverse and global supply chain and urging policymakers to consider the impact of tariffs on patients and consumers.
