Celltrion considers securing US production bases amid mounting tariff concern

Celltrion said it has prepared a three-step response strategy to the possible imposition of pharmaceutical tariffs by the second Trump administration, including expanding exports of raw pharmaceutical materials and securing local manufacturing bases.

The announcement comes after U.S. President Donald Trump mentioned the possibility of imposing tariffs on foreign-made pharmaceuticals, semiconductors, and steel in his speech on Monday (local time).

“President Trump has not made a specific policy proposal on pharmaceutical tariffs, and the actual implementation is subject to further review and policy observation,” Celltrion said in a letter to its shareholders on Thursday.

Noting that tariffs on pharmaceuticals could result in higher drug prices in the U.S. and pose a significant burden on consumers and the healthcare system, Celltrion said, “The likelihood of actual enforcement is uncertain given that President Trump has consistently pushed for lower drug prices during his first administration.”

Nonetheless, Celltrion has laid out a phased response strategy for the tariffs: short-, medium-, and long-term.

In the short term, the company said, “Our products currently sold in the U.S. have sufficient inventory that can be sourced locally without additional imports until the third quarter of 2025,” it said. “Some products expected to run out early can be produced in the U.S. through local manufacturing sites based on raw materials already imported into the country.”

The company's medium-term response is to shift its supply strategy to focus on raw materials.

“If the tariffs persist in the long term, we plan to adjust our strategy by focusing on exporting raw pharmaceutical products with lower tariff burdens than finished pharmaceutical products with relatively high tariffs and producing finished pharmaceutical products at local manufacturing sites,” Celltrion said. “We are already looking into collaborating with local companies with sufficient manufacturing capacity to produce our products.”

In the long term, the company is looking to secure a manufacturing site in the U.S. “We are considering the acquisition or establishment of a local production base that can produce not only finished drugs but also raw materials,” Celltrion said. “We are looking to establish a stable supply chain unaffected by political and social changes in the U.S. and further expand our market share in the world’s largest pharmaceutical market.”

Celltrion even sees a positive effect from the tariff policy.

“If the Trump administration imposes tariffs, this is likely to result in higher consumer and commodity prices in the U.S., which could trigger inflation,” Celltrion, which would be supported by continued tight monetary policy by the U.S. Federal Reserve and a high exchange rate environment,” the company said. “A high exchange rate environment can be positive for global exporters like us, as it can help us become more competitive in the U.S. market and improve our profitability.”

Noting that the company will continue to monitor the direction of the Trump administration's tariff policy and is prepared to respond immediately if it materializes, Celltrion said, “We remain committed to minimizing supply and sales risk and maximizing shareholder value through sustainable growth in a changing global market environment. We will continue to share our response with our shareholders promptly and transparently.”

Celltrion's response comes as the global pharmaceutical industry is also concerned.

On Tuesday, Reuters reported that Trump's drug tariffs could hit Japanese drugmakers who rely heavily on the U.S. market, including Takeda, Astellas, Daiichi Sankyo, and Eisai. Takeda, in particular, made more than half of its sales in the last fiscal year, and Astellas also produced 41 percent of its revenue in the U.S. market.