Celltrion announced on Monday that the tariff impact on its business related to the Adjustment of Drug and Active Pharmaceutical Ingredient Imports to the U.S. recently announced by the Donald Trump administration has been effectively resolved. The company projects that long-term growth opportunities will expand further.

U.S. Announces Drug Tariff Measures; Biosimilars Excluded from Application

The U.S. government introduced tariff measures to encourage the return of the drug supply chain to domestic production. For South Korea, a 15% tariff on pharmaceuticals is expected to apply, considering existing trade agreements.

Companies that sign a Most Favored Nation (MFN) pricing agreement with the U.S. Department of Health and Human Services (HHS) and have local production facilities may qualify for tariff exemptions.

Celltrion's biosimilars, which account for the majority of its U.S. sales, will be excluded from these tariffs and will undergo reevaluation in one year.

With the tariff impact on Celltrion's biosimilar products in the U.S. now eliminated, the company has established a stable foundation for its local sales and marketing strategies. Additionally, Celltrion plans to gradually build local production capabilities at its Branchburg facility for products sold in the U.S.

Local Production System Established; Drug Tariff Impact Preemptively Blocked

The subcutaneous infliximab treatment Zymfentra is expected to avoid tariff impact as its active pharmaceutical ingredients (APIs) will be produced at the Branchburg facility in New Jersey.

Celltrion has already completed the technology transfer for Zymfentra's production at this facility and plans to produce not only Zymfentra but all products sold in the U.S. at the local site.

A Celltrion representative explained that by establishing a local production system that fundamentally avoids U.S. tariff risks, the company will remain structurally unaffected even if U.S. tariff policies change, including adjustments to tariff rates.

Increased Demand for Local API Production Anticipated; Additional Growth Expected

Celltrion has decided to expand its Branchburg production facility by an additional 75,000 liters, increasing its total production capacity from the current 66,000 liters to 141,000 liters for API production. This is expected to significantly enhance its global contract manufacturing (CMO) capabilities and improve business prospects.

The company anticipates strengthening its direct sales competitiveness based on local production. Zymfentra has entered a significant growth trajectory, with prescriptions more than tripling compared to the previous year, setting record monthly prescription volumes.

If local production facilities can provide tariff-free pricing, the growth momentum is likely to accelerate. Factoring in logistics and transportation cost reductions, the price competitiveness compared to other companies could improve even further.

A Celltrion representative stated that with the U.S. drug tariff policy effectively eliminating tariff impacts on the key product lines, it sees this as a positive development for strengthening direct sales competitiveness through local production and expanding new business opportunities. It will accelerate growth in the U.S. market through increased prescriptions for key products, including Zymfentra, and by expanding the CMO business.

Celltrion announced on Monday that the tariff impact on its business related to the Adjust …

How Celltrion's Local Production Strategy Eliminates U.S. Drug Tariffs Influence