During the first year of Donald Trump’s second term (inaugurated on January 20, 2025), the U.S. pharmaceutical and biotech market underwent rapid changes. The focus was on drug price reductions and supply chains. The White House prominently adopted a Most Favored Nation (MFN) pricing policy, securing successive agreements with pharmaceutical companies. Simultaneously, legislation like the BIOSECURE Act intensified efforts to disrupt bio supply chains linked to China.
Industry sources reported on Monday that South Korean pharmaceutical and biotech companies are viewing U.S. policy changes as opportunities rather than just risks. Companies selling biosimilars in the U.S. are particularly sensitive to pricing policy shifts, while those with significant Contract Development and Manufacturing Organization (CDMO) and export operations are aligning more closely with supply chain and local production requirements.
MFN Pricing and TrumpRx: Market Game-Changers
The U.S. government officially launched its drug price reduction strategy on May 12 last year, promoting MFN prices for American patients. Pfizer in September and AstraZeneca in October agreed to apply MFN pricing to state Medicaid programs. By December 2025, nine companies had signed on, marking the policy’s transition from concept to reality.
This January, AbbVie unveiled a three-year agreement coupled with a 100 billion USD investment plan over the next decade, reinforcing the price cuts for investment trade-off. Market analysts suggest this evolving approach now brings companies’ investment, employment, and production plans to the negotiating table alongside pricing discussions.
The TrumpRx.gov direct-to-consumer platform for pharmaceutical companies has also become integral to the policy package. However, its real-world impact may vary based on insurance structures, co-pay systems, and affected groups, leading to diverse interpretations of the policy’s reach. Some industry insiders argue that drug pricing’s new role as a policy constant has increased market uncertainty.
Domestic Production: The Answer to Supply Chain Disruptions
The BIOSECURE Act, enacted last December, aims to protect U.S. biotech industry security and technology. It primarily restricts federal procurement and grants related to biotechnology companies of concern. While implementation will be gradual, experts believe companies now have greater incentive to proactively review their transaction and outsourcing structures.
Tariff concerns remain significant. The Trump administration’s ongoing use of potential drug tariffs as a negotiating tool has increased the appeal of U.S.-based production, accelerating companies’ investments and establishment of local bases. For instance, Samsung Biologics agreed to acquire a 280 million USD production facility in Rockville, Maryland last December, reflecting the trend of Korean companies securing U.S. manufacturing capabilities amid tariff uncertainties.
Analysts suggest that the push for U.S. production among Korean firms is driven more by increased market demand for domestic options following policy uncertainties, rather than by actual tariff impositions.
Trump’s Remaining Term: Balancing Deregulation and Price Cuts
PwC has identified regulatory relief and drug price reductions as key biotech sector priorities for Trump’s second term. This suggests a dual approach: maintaining open channels for approvals, reviews, and investments while leveraging the politically sensitive issue of drug pricing as a pressure point.
The White House’s intention to codify MFN agreements indicates this could become the cornerstone of pricing policy for the remainder of the term.
Industry observers anticipate that as this trend continues, Korean companies will refine their U.S. market strategies. While stricter drug price policies may create opportunities for biosimilars, overall market price decreases could necessitate robust profitability defense strategies.
CDMO and export strategies are likely to pivot towards establishing U.S.-based or multi-regional production networks to mitigate supply chain and tariff risks.
The health policy research organization KFF noted that Trump’s drug price reduction efforts encompass both MFN pricing and expanded manufacturer direct sales, suggesting that future drug pricing discussions may continue to revolve around international benchmarking and direct-to-consumer models.