Korean Drugmakers Brace for U.S. Tariffs, Struggle to Keep Pace in New Drug Race (Yonhap)
SEOUL, Oct. 7 (Korea Bizwire) — South Korea’s pharmaceutical and biotech firms are racing to close out the year under mounting pressure, with looming U.S. tariffs and sluggish drug development emerging as key challenges after the Chuseok holiday.
Industry sources said Monday that the most immediate concern is the “U.S. tariff risk” following President Donald Trump’s announcement last month that drugs produced by companies without U.S.-based manufacturing plants will face 100 percent tariffs starting this month.
Companies such as Celltrion, Lotte Biologics, and SK Biopharm are relatively insulated after securing or building U.S. production facilities. Celltrion recently acquired Eli Lilly’s biopharmaceutical plant in New Jersey, while Lotte Biologics operates a facility in Syracuse, New York, and SK Biopharm has begun local production using pre-secured inventory.
In contrast, Samsung Biologics and its affiliate Samsung Bioepis, which lack U.S. plants, face greater uncertainty. Analysts warn that they could suffer major setbacks if the tariffs are applied broadly.
However, some observers note that Trump’s measure may only target patented drugs, potentially exempting biosimilars and contract manufacturing (CMO) operations, which remain undefined in the policy.
Samsung Biologics Plant 3 (Image courtesy of Samsung Bioilogics)
Slow Pace in Homegrown Drug Innovation
The sector is also watching whether progress in new drug development will accelerate before year-end. Between January and September, the Ministry of Food and Drug Safety approved only a handful of locally developed drugs, including Medytox’s fat-dissolving injection “Newvisu” and GC Biopharma’s anthrax vaccine “Varitrax.”
While industry leaders such as Celltrion and Samsung Biologics have announced plans to expand into original drug development, tangible results have yet to materialize. LG Chem, once expected to release Korea’s 39th homegrown drug — the gout treatment Tigulixostat — halted its Phase 3 global trials in March for cost and feasibility reasons.
A survey by the Korea Drug Development Fund found that Korean companies and institutions currently maintain 1,701 drug pipelines, compared to roughly 1,070 among the top 10 global pharma giants. Experts attribute this gap to differences in R&D funding and scale.
In a recent policy report, Lee Kwan-soon, chairman of the Korea Pharmaceutical and Bio-Pharma Association’s Future Vision Committee, warned that “capital inflows into drug innovation have fallen sharply, and the country lacks coordinated talent development.” He called for a national-level Bio Committee to position drug development as a strategic growth engine and urged private firms to focus resources on areas where they can excel.
This photo shows the sign of South Korea’s pharmaceutical giant Celltrion Inc. (Image courtesy of Yonhap)
Biosimilars Emerge as the Next Battleground
Competition in biosimilars — cheaper versions of biologic drugs — is also intensifying. In September alone, at least six biosimilar products from Celltrion, Samchundang Pharm, and Alteogen received approval in Korea or abroad.
As major patents for blockbuster drugs such as Prolia and Xolair expire, and with Trump’s push for lower drug prices, global rivalry in the biosimilar market is expected to escalate further.
To survive, Korean firms aim to secure first-mover advantages, build cost-efficient distribution networks, and differentiate through strategic pricing. Yet, they must also contend with the original developers’ defensive patent strategies.
For example, Merck is developing a subcutaneous version of its blockbuster immunotherapy Keytruda, using Alteogen’s proprietary enzyme technology ALT-B4, in a bid to fend off biosimilar competition.
With just two months left in the year, Korea’s pharmaceutical sector faces a dual test — navigating geopolitical risks while proving its capacity for genuine innovation in a fiercely competitive global market.
M. H. Lee (mhlee@koreabizwire.com)
