The tariff cap on Korean-made pharmaceuticals exported to the United States has been set at 15%, easing concerns in the industry.
The White House on the 13th (local time) released a joint fact sheet (fact sheet·joint briefing document) related to the U.S.-Korea trade consultations. A document was issued specifying the details of the U.S.-Korea trade agreement concluded on the occasion of the summit in Gyeongju, North Gyeongsang, between President Lee Jae-myung and President Donald Trump on the 13th of last month.
Accordingly, the United States will lower item-specific tariffs on Korean-made automobiles and auto parts, pharmaceuticals, and logs and lumber to 15%. In addition, tariffs on Korean-made pharmaceuticals will be subject to most-favored-nation treatment and will not exceed 15%.
Domestic pharmaceutical and biotech corporations that have entered the U.S. market said their business burden from tariff uncertainty has dropped significantly and expressed relief. There had initially been concern over the possibility of ultra-high tariff rates exceeding 100%. A representative of a biotech corporation operating in the United States said, "This announcement resolves the tariff risk."
The Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) said it "highly positively and thankfully evaluates the confirmation of a 15% tariff under most-favored-nation treatment for pharmaceuticals in the tariff negotiations with the United States."
However, while the fact sheet included a provision maintaining zero tariff on generic (copycat) pharmaceuticals, it did not mention biosimilars. The industry expected the burden to be limited because domestic corporations have been preparing for the possibility of high tariff rates.
Earlier, Celltrion acquired a local plant put up for sale by Eli Lilly in the United States, and SK Biopharm established a contract manufacturing (CMO) facility last year and obtained approval from the U.S. Food and Drug Administration (FDA) for a change in production facilities, easing uncertainty.
Celltrion said, "By acquiring production facilities in the United States, we have already structurally escaped tariff risks," adding, "We will strengthen our business capabilities through supply via local facilities, reinforcement of direct sales capabilities, and CMO expansion." An SK Biopharm official said, "We have been preparing for ongoing tariff-related uncertainties and have already begun production in Puerto Rico, a U.S. territory."
The pharmaceutical-bio association said, "As Korean corporations possess formulation technologies and manufacturing capabilities at a global level, they will become trusted partners who can contribute to strengthening the U.S. pharmaceutical supply chain," adding, "In line with U.S. policies to lower drug prices and improve distribution structures, this will be an opportunity to enhance the market competitiveness of Korean-made pharmaceuticals, including biosimilars."