Korea’s US pharma exports up 43% this year

..the upside of tariff uncertainty

Pharmaceutical exports reach USD 7.3 Billion... projected to hit post-pandemic high

U.S. remains top export destination... exports to US surge 43% year-on-year to KRW 2.3 trillion

Strong export momentum expected to continue following the Korea-US pharmaceutical tariff agreement

Korea’s cumulative pharmaceutical exports have surpassed KRW 10 trillion.

 

Exports through October increased 18% year-on-year, continuing their strong performance.

 

Industry observers expect this export momentum to continue following the final resolution of the U.S.-Korea pharmaceutical tariff negotiations, which had been the biggest source of uncertainty.

 

October cumulative pharmaceutical exports up 18%...

 

hints at record high performance According to the Korea Customs Service, as of the 17th, cumulative pharmaceutical exports for the year to date reached USD 7.30631 billion (approximately KRW 10.65 trillion).

 

This represents an 18% increase compared to the USD 6.20242 billion (approximately KRW 9.04 trillion) recorded during the same period last year.

 

Korea surpassed the KRW 10 trillion export milestone 1 month earlier than the previous year.

 

If this trend continues, exports are expected to exceed the previous all-time high set in 2021.

 

At that time, annual pharmaceutical exports soared to USD 8.12125 billion, largely driven by the COVID-19 pandemic-related surge.

 

During this period, exports surged significantly as exports of domestically produced COVID-19 vaccines began to be exported in earnest.

 

Annual pharmaceutical exports (Unit: USD 1 million, Source: Korea Customs Service)

Meanwhile, pharmaceutical imports fell 1%, from USD 7.672 billion to USD 7.614 billion.

 

With exports increasing substantially and imports decreasing slightly, the pharmaceutical trade balance improved significantly.

 

The cumulative pharmaceutical trade deficit for October stands at a deficit of USD 308.24 million.

 

This represents a reduction to one-fifth of the USD 1.4698 billion deficit recorded in the same period last year.

 

US exports surge 43% year-on-year...

 

Favorable trend expected to continue following tariff agreement Export performance to the U.S.

 

showed strong results.

 

Cumulative exports of domestic pharmaceuticals to the US in October reached USD 1.56555 billion (approximately KRW 2.28 trillion), a 43% increase compared to USD 1.09767 billion (approximately KRW 1.6 trillion) in the same period last year.

 

The US share of total pharmaceutical exports also expanded by 3 percentage points compared to the same period last year.

 

The US's export share, which was around 18% in October last year, rose to 21% this year.

 

This is interpreted as a result of domestic pharmaceutical and biotech companies actively responding to concerns over potential U.S.

 

government tariffs.

 

Companies like Samsung Biologics and Celltrion secured large inventories by preemptively exporting pharmaceuticals to their US subsidiaries in preparation for tariff concerns.

 

In the mid-to-long term, they plan to secure production facilities locally in the U.S.

 

Monthly Korean pharmaceutical exports to the US(Unit: USD 1 million, Source: Korea Customs Service)

Exports to Canada, major European countries, Japan, and China also increased significantly.

 

Cumulative exports to Canada in October rose 81% year-on-year, from USD 34.59 million to USD 62.43 million.

 

Exports to Switzerland surged 141% to USD 870.78 million, Germany rose 35% to USD 703.95 million, the Netherlands jumped 239% to USD 462.17 million, and France soared 473% to USD 91.56 million.

 

Exports to Japan rose 16% from USD 261.52 million to USD 302.51 million, while exports to China increased 36% from USD 132.63 million to USD 180.49 million.

 

With the recent resolution of the pharmaceutical tariff negotiations with the US, the industry's biggest variable, the pharmaceutical export boom, particularly the US-bound exports, is expected to continue.

 

On October 29, at the APEC Summit in Gyeongju, the two countries agreed to apply Most-Favored-Nation (MFN) tariff treatment to pharmaceuticals.

 

The core of the agreement is that Korean pharmaceuticals in the US will receive MFN treatment, similar to Japan and the EU, with a maximum tariff rate of 15% On the 14th, the details of the agreement reached in the follow-up tariff negotiations were disclosed.

 

The White House released a Korea-US Joint Fact Sheet (JFS) from the summit, stating that the two countries agreed tariffs on Korean pharmaceuticals would not exceed 15%.

 

Also, generic drugs will be fully exempt from tariffs.

 

However, industry assessments indicate that tariff uncertainties remain.

 

The fact sheet did not precisely specify the tariff scope for biosimilars.

 

It remains undetermined whether biosimilars will be included in the generic category to receive zero tariffs or be subject to separate assessment.