Celltrion

Dear Shareholders,

On May 20, 2025 (local time), the U.S. Department of Health and Human Services (HHS) announced follow-up measures regarding the executive order on drug price reduction that was publicly released on May 12. We would like to share a summary of the announcement and Celltrion’s position as follows:
 

1. Summary of the Announcement
• The announcement outlines the pricing targets introduced in the executive order titled “Ensuring American Patients Access to Prescription Drugs at Most-Favored-Nation Prices” issued on May 12.
• HHS has set specific most-favored-nation (MFN) level price targets that pharmaceutical companies must follow to comply with the executive order.
• For high-cost prescription drugs, the MFN price benchmark will be based on the lowest price available in OECD countries whose gross national income is at least 60% of that of the U.S.
• The U.S. government plans to announce agreements with pharmaceutical companies in the coming weeks to ensure Americans do not pay more than patients in other countries.
• The policy is expected to significantly lower U.S. drug prices, which are currently 3 to 5 times higher than those overseas, by aligning them with MFN price levels.
• The government expects pharmaceutical companies to comply with the price reductions; otherwise, federal enforcement measures will be implemented.
 

2. Impact on Our Company
• As explained during the Celltrion Online Conference held on May 15, the announced measures are aimed at high-cost drugs that burden American patients. Since Celltrion’s biosimilar products are already priced competitively and contribute to lowering drug prices through market competition, they are not the primary targets of this policy. Thus, the impact on our products is expected to be limited.
• Should the MFN pricing policy lead to lower prices for high-cost drugs, it may shift the prescribing environment from originator-biased formularies to one favoring direct competition with biosimilars. This shift could provide an opportunity for broader use of biosimilar products.
• In the case of Zymfentra, it has only been approved as a novel drug in the U.S., while it is marketed as a biosimilar in other countries. Therefore, it is not expected to fall under the scope of the MFN pricing reference.
• Taken together, the executive order and related policy changes—such as promoting biosimilar use and improving intermediary distribution structures—indicate a favorable policy stance for Celltrion, and we anticipate these developments will create positive business opportunities.
 

The measures announced are consistent with what Celltrion Group Chairman Seo Jung-Jin stated during the May 15 meeting. As the pricing policy is proceeding within the scope we had anticipated, we believe it will have a favorable impact on Celltrion as a biosimilar manufacturer.

We are providing this explanation to reassure our shareholders and affirm that Celltrion remains committed to responding proactively to global healthcare policy shifts—including those in the U.S.—and leveraging these developments to drive performance and growth.

Thank you.