Celltrion Chairman Seo Jeong-jin said regarding the U.S. government's drug price reduction policy and the possibility of imposing tariffs on pharmaceuticals, "The impact on the company is minimal, and rather, it could be an opportunity." Regarding plans for establishing a local production facility in the U.S., he noted, "We have already reviewed 48 sites and will decide on the investment within the year depending on U.S. tariff measures."
On the morning of the 15th, Seo held an online press conference to explain the company's response plans and future strategies regarding changes in the U.S. government's pharmaceutical-related policies.
Previously, U.S. President Donald Trump signed an executive order on the 12th (local time) aimed at lowering the price that Americans pay for prescription drugs to the same level as other countries. It required pharmaceutical companies to choose within 30 days whether to lower prescription drug prices in the U.S. or to apply new restrictions on the amounts the government will pay.
In this situation, domestic corporations exporting and distributing pharmaceuticals in the U.S. may see their revenue decline. However, Chairman Seo stated, "There are no Celltrion products currently sold in the U.S. that are priced higher than in Europe," adding, "This means we have no factors that will adversely affect us."
He emphasized that this executive order targets the structure of pharmacy benefit managers (PBM), which are key to local intermediary distribution, and high-priced pharmaceuticals. Seo said, "The high price of drugs in the U.S. is due to a complex insurance-driven distribution structure, and if this executive order simplifies the intermediary distribution structure, it will become an opportunity rather than a crisis for Celltrion."
PBMs select the pharmaceuticals to list on partner insurance plans and receive legal rebates in return. They also distribute the rebates received from pharmaceutical companies to insurance companies and government agencies. As a result, the expenses incurred by corporations in distributing pharmaceuticals in the U.S. increase, leading to higher drug prices than in other countries.
If the U.S. drug distribution structure simplifies due to this executive order and prescription drug prices fall, major pharmaceutical companies focused on original medications may see their revenue worsen, while companies such as Celltrion and Samsung Bioepis, which primarily deal with biosimilars, could benefit. The government is expected to encourage price reductions, leading to an increase in the market for affordable biosimilar prescriptions.
Regarding the tariff measures on pharmaceuticals expected to be announced by the U.S. government at the end of this month, Chairman Seo stated, "We have already secured inventory for next year, so no matter how the tariff plan turns out, there will be no impact until next year," adding, "We secured a contract to produce 3 million vials of finished pharmaceuticals in the U.S."
Currently, Celltrion is selling biosimilars such as "Herzuma," "Remsima," and "Truxima" through partners like Pfizer and Teva, indicating that Celltrion is not subject to the tariff imposition.
Regarding plans to build a production plant in the U.S., he commented, "It would cost about 1.3 trillion won to build 100,000 liters in Korea, but in the U.S., it would cost at least 2 trillion won," adding, "We have already reviewed 48 sites in 8 states, and we will decide on investments by the end of this year according to the specific details of the U.S. tariff measures."
Chairman Seo expressed optimism about the business outlook for this year, estimating that "at least 4.7 trillion won in revenue is expected," and stated, "The company will become one that secures a total of 40 products by adding 18 biosimilar products by 2038."
He also mentioned the policy of returning revenue to shareholders. As the largest shareholder holding 98.5% of the stock in the holding company Celltrion Holdings, he stated he would continue to buy back and retire company shares. Chairman Seo noted, "We have already retired 450 billion won worth of company shares this year, and if necessary, we plan to buy back around 700 billion won more," asserting that "buying back shares is the best method for maintaining equity and for inheritance, rather than just defending the stock price."