U.S. President Donald Trump signed an executive order aimed at lowering drug prices in the United States to match those in other countries, and local biotechnology corporation Celltrion noted, "This executive order could provide a better business environment."
According to the company, this executive order is expected to weaken the distribution dominance that high-priced original drug manufacturers have held in the U.S. market, while biosimilars may benefit from improved distribution structures and increase prescriptions in the United States.
Celltrion posted a document titled "Response strategy regarding the Trump administration's executive order on offering most-favored-nation drug pricing" on its website on the 13th.
The key focus of this executive order is to reduce the prices that Americans pay for prescription drugs to levels similar to those in other countries. On the 12th (local time), President Trump signed the executive order related to price reductions, stating, "The United States will no longer subsidize foreign healthcare" and added, "I will no longer tolerate the exorbitant profits and price hikes of major pharmaceutical companies."
To implement this, the U.S. Secretary of Health and Human Services will push forward a program that allows American patients to purchase drugs directly from drug manufacturers at the most-favored-nation price, and the Secretary plans to convey the price targets for American patients to drug manufacturers within 30 days. This aims to ultimately improve the intermediary distribution structure, such as prescription benefit managers (PBMs), and encourage price reductions for high-priced drugs.
Celltrion anticipated that improvements in the intermediary distribution structure, including PBMs, will provide positive opportunities for the company's business operations in the United States.
The company stated, "The distribution dominance held by high-revenue pharmaceutical companies based on original products, including PBMs, is expected to weaken," adding, "This could present market expansion opportunities for corporations based on competition in the biosimilar sector." They also noted, "In particular, biosimilar manufacturers will have the opportunity to negotiate drug prices directly with the government rather than intermediaries such as PBMs, benefiting both the government and manufacturers."
The company predicted that one of the core aspects of this executive order, the reduction of high-priced drug prices, will have a positive impact on Celltrion's operations in the United States.
Currently, the U.S. insurance and PBM systems feature a structure where 2 to 3 additional biosimilar products are listed as limited competition emerges after high-priced original drugs are prioritized on the prescription list. Due to the rebate issues with these intermediaries, biosimilar prices were high and aligned with original drugs when prescribed in hospitals, which failed to deliver substantial benefits to patients, resulting in a notably limited expansion of the biosimilar market compared to Europe.
Celltrion projected, "If the intermediary distribution structure is improved by this measure, the actual prescription prices of biosimilars will decrease, and the benefits that governments and patients will receive would be evident. Therefore, the expansion of biosimilar prescriptions should accelerate to levels similar to Europe."
Celltrion also expressed expectations that, if parallel imports are activated to supply drugs at most-favored-nation prices, they could seize additional opportunities to introduce products not previously launched. Given that Celltrion possesses a direct sales network in the United States, leveraging their rich experience in the European market, they anticipate accelerating sales through product portfolio expansion and synergistic marketing.
A representative from Celltrion stated, "After comprehensively reviewing this executive order, it is expected to work favorably for biosimilar manufacturers," adding, "In particular, it could represent another significant opportunity for corporations like Celltrion that are selling biosimilars directly in the United States." He emphasized, "We will respond with a flexible and adaptable strategy that continuously reflects the specific implementation procedures and policy directions of the U.S. government."