U.S. President Donald Trump speaks at a cabinet meeting held at the White House in Washington D.C. on July 8, 2025 (local time). /Courtesy of Reuters

U.S. President Donald Trump has mentioned again that he will impose high tariffs on imported pharmaceuticals, increasing tension in the domestic pharmaceutical industry. Domestic corporations are preparing countermeasures, such as securing two years' worth of inventory in advance to minimize the impact of the tariffs and considering establishing production bases in the United States in the long term.

On the 8th (local time), President Trump said at a cabinet meeting held at the White House, "There will be announcements regarding pharmaceuticals, semiconductors, and a few other areas," adding, "I will reduce the time frame to one year or a year and a half, and if they do not come (to the U.S.) within that period, tariffs will be imposed afterward." He noted, "Very high tariff rates will be imposed," stating, "For example, at levels like 200%."

The domestic pharmaceutical and biotech industry has been preparing response strategies since early April when President Trump indicated the possibility of imposing tariffs on pharmaceuticals. The United States is not only the world's largest pharmaceutical market but also the largest export destination for domestic pharmaceutical and biotech corporations.

Celltrion announced that it has secured two years' worth of inventory for pharmaceuticals exported to the U.S. as a short-term countermeasure. The company said, "We plan to continuously hold two years' worth of inventory in the future to ensure supply stability."

Celltrion is also preparing medium- and long-term countermeasures. As a medium-term countermeasure, it has completed contracts with local contract manufacturing organizations (CMOs) to produce products sold in the U.S. locally. The company also stated that it is considering acquiring a company that has production facilities in the U.S. as a long-term countermeasure.

A company representative said, "We have been continuously monitoring the movement to impose tariffs on U.S. pharmaceuticals and preparing situational response strategies to minimize the impact," and added, "No matter how or when the domestic pharmaceutical tariff policy is decided, we plan to complete preparations by the end of next year to ensure that it has no impact on the company."

SK Biopharm is reviewing plans to establish manufacturing facilities in the United States. This is a strategy to prepare for the U.S. government's tariff policies and stabilize the production and supply of the epilepsy treatment Cenobamate.

Lee Dong-hoon, CEO of SK Biopharm, stated at the Bio USA event held in Boston last month, "We are steadily preparing for tariff risks," and added, "We are also considering producing products in U.S. territory of Puerto Rico." He mentioned, "We have contacted local producers and conducted due diligence."

Pharmaceutical contract development and manufacturing organizations (CDMOs) like Samsung Biologics had predicted that the impact of tariff imposition would be limited, but the situation could change depending on the level of the tariffs. If the high tax rate mentioned by President Trump reaches 200%, clients might shift the burden to CDMO firms.

John Lim, CEO of Samsung Biologics, said at Bio USA last month, "Currently, the CDMO business generally has a structure where clients bear the tariffs, so there is no immediate significant impact," but added, "We are preparing scenarios in case new trade barriers arise due to policy changes in some countries."

Some corporations have already secured production facilities in the U.S. Lotte Biologics acquired the Bristol-Myers Squibb (BMS) plant in Syracuse, New York, in 2022. Lotte Biologics plans to expand facilities for antibody-drug conjugates (ADCs) at this plant, aiming for production within this year. Matica Biotech, a subsidiary of CHA Biotech, announced plans to build more factories in the U.S. within 2 to 3 years after securing a cell and gene therapy (CGT) facility in Texas.

The U.S. pharmaceutical industry and civic groups are raising their voices in criticism of President Trump's tariff announcement for pharmaceuticals. They argue that the tariffs would lead to increased expenses and supply chain disruptions, ultimately harming patients.

The Pharmaceutical Research and Manufacturers of America (PhRMA), the largest pharmaceutical lobbying group in the U.S., reiterated its opposition to the tariffs that day. In a statement, the organization said, "The industry empathizes with President Trump's goal of revitalizing U.S. manufacturing and recently announced investments worth hundreds of billions of dollars in the United States," adding, "Imposing tariffs on pharmaceuticals will counteract these efforts." They emphasized that pharmaceuticals have traditionally been exempted from tariffs due to the potential for increased expenses and supply shortages.

There are opinions in the market suggesting that, given President Trump has previously warned of tariffs multiple times and reversed his position, the actual possibility of imposing a 200% tariff on pharmaceuticals is slim. David Risinger, an analyst at Leerink Partners, stated, "Tariffs are not implemented immediately, and the actual execution in the future remains uncertain." Indeed, on the day of President Trump's announcement, pharmaceutical stocks on the U.S. stock market closed without significant fluctuations.