Songdo Biocluster (Image courtesy of Incheon Free Economic Zone Authority)
SEOUL, Feb. 20 (Korea Bizwire) — South Korean pharmaceutical and biotech companies are scrambling to prepare for potential new tariffs threatened by American President Donald Trump on foreign-made drugs entering the U.S. market.
Celltrion, a major South Korean biopharmaceutical company, announced on its website on February 19 that it has established an “optimal response system” to address possible drug tariffs.
The company revealed it has already transferred approximately nine months’ worth of inventory for products scheduled for U.S. sale this year, as of late January, to minimize the impact on its American operations.
The company is also focusing on exporting active pharmaceutical ingredients, which would carry a lower tariff burden than finished drugs. “If necessary, we will further expand local production of finished pharmaceuticals beyond current levels,” Celltrion stated.
The moves come in response to Trump’s inauguration speech in January, where he mentioned imposing tariffs on foreign-produced pharmaceuticals, along with semiconductors and steel.
On February 13, he announced plans for reciprocal tariffs, matching rates other countries impose on U.S. goods. On February 18, when questioned about pharmaceutical tariffs specifically, Trump stated they would be “25% or higher.”
Other major Korean pharmaceutical companies are also preparing contingency plans. SK Biopharm said it is “reviewing various options, including changing contract manufacturing organizations (CMOs).”
The company’s epilepsy treatment, Cenobamate, is currently exported to the U.S. through CMOs in Canada. If tariffs on Canadian imports are confirmed, the company may switch to U.S.-based CMOs.
Samsung Biologics, Samsung Bioepis, and Daewoong Pharmaceutical all indicated they were closely monitoring Trump’s tariff policies and preparing accordingly.
The impact of Trump’s tariff policies is expected to vary by company. Yuhan Corporation noted that its non-small cell lung cancer treatment, Leclaza, is produced and distributed by Janssen.
“Companies exporting finished pharmaceuticals to the U.S. could face significant tariff impacts, while those with different arrangements may be relatively insulated from the risk,” the company explained.
Yuhan previously licensed the global development and commercialization rights (excluding South Korea) for Leclaza to Janssen for $1.25 billion.
M. H. Lee (mhlee@koreabizwire.com)
