Trump 2.0 Era: Pharma and Biotech Industries Eye Gains from Biosimilars and CDMO

As the “Trump 2.0 Era” begins in the United States, the world’s largest pharmaceutical market, attention is focused on its impact on the domestic pharmaceutical and biotech sectors. The industry expects policies such as drug price reductions and supply chain strengthening from the first Trump administration to continue into the second term.

According to industry sources on Jan. 21, the first Trump administration’s key pharmaceutical and biotech policies included Executive Orders 13948 and 13944. Executive Order 13948 mandated that pharmaceutical companies supply drugs to Medicare, the U.S. public healthcare system, at the lowest price among OECD countries. Executive Order 13944 required that essential medicines be sourced from U.S. manufacturers. These policies stemmed from Trump’s belief that drug prices in the U.S. were excessively high, allowing global pharmaceutical giants to reap undue profits. Trump argued that while drugmakers set relatively low prices in other countries, the U.S. was being unfairly exploited. During his first term, Trump sought to lower drug prices through executive orders, but faced legal challenges from the Pharmaceutical Research and Manufacturers of America and strong opposition from pharmaceutical companies. Both executive orders were rescinded under the Biden administration, but analysts believe they are likely to be reinstated under Trump’s second term.

The drug price reduction policy is expected to stimulate growth in the biosimilar and generic drug markets. Companies like Celltrion and Samsung Bioepis are anticipated to benefit. However, as demand for biosimilars rises, competition with overseas firms from regions such as India, Europe, and Japan is expected to intensify. Price competition will likely escalate, making it critical for companies to differentiate themselves through biobetter technologies and strong patent strategies.

Heightened efforts to counter China during Trump’s second term may present opportunities for South Korea. A prime example is the Biosecure Act, which includes a ban on transactions between the U.S. federal government and Chinese biotech firms. Although the act was temporarily shelved at the end of last year, it is expected to gain momentum and, if passed, will likely benefit South Korean contract development and manufacturing organization (CDMO) companies such as Samsung Biologics.

Trump’s appointment of Robert Kennedy Jr., known as a “vaccine skeptic,” as secretary of the Department of Health and Human Services has raised questions about its potential impact on the domestic and global vaccine industries. Following the announcement, the stock prices of global vaccine manufacturers like Pfizer, Moderna, and Novavax declined simultaneously.

For new drug developers, the outlook is mixed. While concerns exist about potential reductions in revenue for global pharmaceutical companies due to price cuts, which could hinder licensing deals for new drug candidates, there is still optimism that companies will actively pursue open innovation. Prof. Lee Hyo-young of the Korea National Diplomatic Academy stated in a policy report published by the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, “The Trump administration is expected to focus on creating a private-led ecosystem by reducing government intervention and regulations in the healthcare sector. Strengthened countermeasures against China are also likely to present opportunities for South Korea’s pharmaceutical and biotech industries.”

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