U.S. drug prices are under scrutiny due to patent monopolies and a lack of government-negotiated pricing. The administration is considering reintroducing the Most Favored Nation (MFN) model, which aims to align U.S. drug prices with the lowest rates among comparable nations.
The policy could prove advantageous for Korean biosimilar manufacturers, whose products match the efficacy of original drugs but come at a fraction of the cost. Analysts at the Korea Health Industry Development Institute suggest that Trump’s favorable stance on biosimilars and generics might help sustain or even boost U.S. demand for Korean pharmaceutical exports.
However, the changes present challenges for South Korean firms focused on developing novel drugs. Lower U.S. pricing benchmarks could diminish returns on investment, potentially curbing research and development spending.
A more immediate challenge lies in Trump’s push to overhaul global pharmaceutical supply chains, with an emphasis on excluding Chinese products. This initiative could compel South Korean firms to invest heavily in diversifying their supply chains, as many rely on Chinese raw materials.
“The potential ban on Chinese products and the emphasis on U.S. technology could create serious challenges in sourcing pharmaceutical raw materials,” said Noh Yun-hong, president of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association.
Yet the policy shift could also unlock new opportunities for South Korean contract development and manufacturing organizations (CDMOs), as the exclusion of Chinese biotech firms from the U.S. market creates a gap that Korean companies could fill.
The Korea Health Industry Development Institute has cautioned that Trump’s second term could bring heightened pressure on South Korea’s health industries. It urged companies to bolster their competitiveness and prepare for a rapidly evolving global landscape.
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