South Korean pharmaceutical companies face challenges after the US announced US tariffs on pharmaceuticals targeting branded and patented drugs. The 100% tariff applies to products from companies without US manufacturing plants. Industry experts warn that US tariffs on pharmaceuticals may reduce South Korean drugmakers’ competitiveness against firms from countries with trade agreements.
President Trump clarified that companies “building” a US pharmaceutical facility will avoid the tariffs. Construction must either have started or be underway to qualify. Meanwhile, countries with negotiated trade agreements, including the EU and Japan, face lower or capped duties. South Korea, without finalized agreements, falls under the full tariff rate, potentially affecting exports.
The tariff news already impacted stock prices. SK Biopharmaceuticals Co. lost 3.5%, underperforming the Kospi index. Green Cross Holdings Corp. and Chongkundang Holdings Corp. declined by over 2.5%. Several junior Kosdaq pharmaceutical firms also saw notable losses, while Celltrion rose after acquiring Eli Lilly’s US plant. Analysts expect companies with US bases to better withstand the US tariffs on pharmaceuticals.
South Korea’s pharmaceutical exports to the US reached $1.5 billion last year, comprising 1.1% of total national exports. Generic drugs remain exempt, as most South Korean exports involve drug substances rather than finished branded products. Industry experts highlight that profits could drop if tariffs extend to drug substances later.
To mitigate risks, South Korean firms are securing US production or packaging facilities. Celltrion acquired Eli Lilly’s plant, SK Biopharmaceuticals established a base in Puerto Rico, and Lotte Biologics purchased a US biologics plant. Samsung Biologics also explores US plant options to avoid future tariffs. Contract development organizations are following similar strategies.
The US administration is exploring tariffs on electronics based on semiconductor counts. Products such as smartphones, PCs, TVs, and refrigerators may see increased tariffs. Officials emphasize the goal is to restore domestic manufacturing and protect national economic security. Analysts predict South Korean exports of electronics and pharmaceuticals will face sustained pressure until trade agreements evolve.
The tariffs illustrate how South Korea’s pharmaceutical sector faces growing uncertainty from US trade policy. Companies with US manufacturing presence are positioned to adapt, while others must accelerate expansion abroad. The government and industry continue monitoring developments closely to safeguard competitiveness and maintain market share.
