Will the 'Trump 2nd Term' Bring a Bright Future for K-Bio Manufacturing Competitiveness?

Drug Price Reductions and China Containment Policies in the Bio Sector
Korean Biosimilar and CDMO Companies Poised to Benefit

With the inauguration of the second term of the U.S. Donald Trump administration, expectations are growing that the development and manufacturing competitiveness of the domestic pharmaceutical and bio industries could begin to reap significant benefits.

According to industry sources on the 21st, the most prominent policy directions in the pharmaceutical and bio sectors following President Trump's re-election are expected to focus on "drug price reduction" and "containing China." Both of these pillars are analyzed to potentially strengthen Korea's development and manufacturing competitiveness.

During Trump's first term, an executive order was issued stating that "pharmaceuticals should be supplied at the lowest prices among OECD countries." Although this executive order was repealed during the Biden administration, it is expected to be reintroduced under Trump's second term. Additionally, during his first term, Trump submitted legislation to Congress to prohibit pharmaceutical companies from paying rebates to Pharmacy Benefit Managers (PBMs) to control drug costs. At that time, the U.S. Department of Health pointed out that rebates increase drug prices and hinder the use of low-cost biosimilars, explaining the necessity of the bill.

This drug price reduction policy under the Trump administration is likely to result in indirect benefits for domestic biosimilar companies. Biosimilars are generally about 30% cheaper than the original products. This is why there is growing anticipation for increased demand for biosimilars in the U.S. The development capabilities of domestic biosimilar companies have already been proven. From 2015 to last year, the U.S. Food and Drug Administration (FDA) approved a total of 63 biosimilars for 17 original drugs over ten years, with Korean companies receiving approval for 14 of them, ranking second after the U.S. with 26 approvals.

Donald Trump, President of the United States.

The CDMO (Contract Development and Manufacturing Organization) sector is also highly likely to benefit. Korea's bio industry has not only developed biosimilars but also established large-scale manufacturing capabilities. Samsung Biologics plans to expand its production capacity to 1,324,000 liters by 2032 by consecutively completing plants 6 to 8, including the 5th plant (180,000 liters) scheduled for completion in April. This scale surpasses global competitors such as Lonza and Catalent. Celltrion is also set to secure a 300,000-liter CDMO plant by 2031.

Moreover, the Trump administration's policy direction to exclude China from the global supply chain is positive for Korean companies. During his candidacy, Trump pledged through "Agenda 47" to ban imports of essential goods, including pharmaceuticals, from China. Additionally, the "Biosecurity Act," which restricts the U.S. operations of Chinese CDMO companies such as those in Wuxi, is expected to be reintroduced, potentially benefiting domestic CDMO companies. The industry anticipates that the de-China policy will weaken the influence of Chinese CDMO companies like Wuxi Biologics and provide significant indirect benefits to companies of other nationalities, including Korea.

However, the Trump administration may also pressure investments and employment by requiring the establishment of factories within the U.S. Kim Hyuk-jung, a senior researcher at the Korea Institute for International Economic Policy's North America and Europe team, stated, "Strengthening cooperation with U.S. clients to enhance the production base within the U.S. is likely to be an effective strategy," adding, "Entering the market through joint ventures with domestic U.S. companies or leading foreign pharmaceutical companies, or directly acquiring U.S. companies, could be proposed as options."

This content was produced with the assistance of AI translation services.