Samil PwC: "US Biosecurity Law Presents Opportunities for Korean Bio Companies"

Report: “Another Front in the US-China Trade Dispute: The Pharmaceutical and Bio Industry”

There is a growing expectation that domestic bio companies could benefit as the Biosecurity Act, initially proposed during the second Trump administration targeting Chinese bio companies, is being reintroduced. However, concerns remain over potential tariff increases on pharmaceuticals, highlighting the need for strategic responses.

On the 13th, Samil PwC announced the publication of a report titled “Another Front in the US-China Trade Dispute: The Pharmaceutical and Bio Industry.” The report analyzes the impact of the Biosecurity Act’s implementation on the US, China, South Korea, and other countries, aiming to explore growth opportunities for domestic bio companies.

According to the report, the Biosecurity Act was proposed to protect Americans’ personal health and genetic information from concerning companies. It includes provisions banning the US operations of China’s largest genomics company, BGI Group, and its affiliates. After being introduced in January 2024, the bill passed the US House of Representatives in September 2024 but failed in the Senate vote in December. Nevertheless, given the policy stance of the second Trump administration, the likelihood of the Biosecurity Act being reintroduced is considered high.

The report analyzed that “the US’s high dependence on China means that if the Biosecurity Act is enforced, finding alternative supply sources will be difficult, resulting in significant impact.” Regarding China, it noted, “Since Wuxi Biologics and Wuxi AppTec generate more than half of their revenue from the US, these companies will suffer considerable sales losses,” and predicted that “the trust of US companies and investors in Chinese bio companies will also decline sharply.”

On the other hand, the report forecasted benefits for Korean companies. It stated, “As an alternative to Chinese companies focusing on early-stage contract development (CDO), domestic small and medium-sized contract development and manufacturing organizations (CDMOs) are expected to emerge.” It further predicted, “In the mid to long term, large domestic CDMO companies with overwhelming production capacity, strong track records with global pharmaceutical firms, and adherence to global excellent manufacturing and quality management practices (GMP) will directly and indirectly benefit.” The report added, “The impact on Korean CDMO companies will extend to clinical research organizations (CROs) and bio materials and parts companies, creating a virtuous cycle within the domestic bio ecosystem.”

Seo Yong-beom, Partner and Leader of the Pharmaceutical and Bio Industry at Samil PwC, said, “President Trump’s pharmaceutical and bio industry policies are expected not only to restrain China through the Biosecurity Act but also to impose tariffs on all countries to protect the US.” He emphasized, “Domestic bio companies need to prepare strategic responses to the tariff variables.”