U.S. President Donald Trump signed an executive order favoring generic drugs to reduce the financial burden of healthcare on Americans. The core of the order is to simplify approval procedures and lower barriers to market entry. As a result, expectations are rising that domestic corporations could benefit.
On the 15th (local time), President Trump announced an executive order titled 'Reducing drug prices to prioritize Americans once again,' expressing his intention to expand the use of generics (chemical synthetic drugs) and biosimilars (biopharmaceuticals).
This executive order goes beyond a simple pricing policy, aiming to activate competition in the prescription drug market. The U.S. Food and Drug Administration (FDA) will simplify guidelines and approvals for generics and encourage doctors to prescribe affordable generic drugs. Additionally, it contains measures to force prescription benefits managers (PBMs), who manage U.S. private insurance prescriptions, to disclose their fees, thereby putting pressure on drug intermediaries.
This executive order seems likely to provide new opportunities for domestic biosimilar corporations that have technological competitiveness and have already launched products in the U.S.
Celltrion and Samsung Bioepis are representative corporations that are expected to benefit. Celltrion has currently received approval for 9 types of biosimilars in the U.S. and has launched 7. Samsung Bioepis has received approval for 10 and has launched 6 products.
An industry official noted, 'This executive order is expected to benefit biosimilar manufacturers through drug price reduction policies, and with policies for accelerating approvals and activating competition among drugs, it is anticipated that there will be more opportunities for market expansion for biosimilar manufacturers.'
On the other hand, there are projections that competition may intensify due to lower barriers to entry for generics. If the approval process is relaxed, the number of market entrants may increase, intensifying price and quality competition. One industry official stated, 'Prescription benefits managers typically contract with 1 to 3 companies for biosimilar products, but they may seek to increase this number, and the ability to supply in a timely manner is essential, leading to the possibility of restructuring around major companies in the long term.'
This executive order also allows the FDA to cooperate with state governments to facilitate the import of drugs from other countries, including Canada. SK Biopharma, which manufactures the epilepsy treatment 'cenobamate' as a finished drug in Canada for export to the U.S., may be affected. However, the company is waiting to see future tariff policies.