To amend title XVIII of the Social Security Act to require PDP sponsors of a prescription drug plan under part D of the Medicare program that use a formulary to include certain generic drugs and biosimilar biological products on such formulary, and for other purposes.

HR8143 requires Medicare Part D plans to include all generic drugs and biosimilar biological products on their formularies. This eliminates the ability of Part D plans to exclude these lower-cost alternatives, forcing their inclusion. This directly impacts the revenue streams of pharmaceutical companies that rely on patented brand-name drugs for profitability, as market share will shift to generics and biosimilars. Pharmacy benefit managers (PBMs) will also see reduced margins on brand-name drugs due to decreased utilization and negotiating leverage. The money trail shifts from high-margin brand-name drug sales to lower-cost generic and biosimilar sales. Pharmaceutical companies like Pfizer ($PFE), Johnson & Johnson ($JNJ), Merck ($MRK), and Amgen ($AMGN) will experience revenue pressure on their patented portfolios. Conversely, generic and biosimilar manufacturers such as Viatris ($VTRS) and Teva Pharmaceutical Industries ($TEVA) are positioned to capture increased market share and sales volume. PBMs, including CVS Health ($CVS), Cigna ($CI), and Elevance Health ($ELV), will see a reduction in their ability to negotiate rebates on brand-name drugs, impacting their profitability. Historically, similar legislative pushes for generic drug utilization have impacted pharmaceutical stock performance. For example, the 2003 Medicare Modernization Act, which established Part D, led to a significant increase in generic drug use over the subsequent years. While not a direct mandate on formulary inclusion, the increased focus on cost-effectiveness pressured brand-name drug sales. Following the passage of the Affordable Care Act in 2010, which also emphasized cost containment and generic utilization, major pharmaceutical companies experienced a period of slower growth and increased R&D pressure. Specific stock movements are harder to isolate due to the broader market and economic conditions at the time, but the trend was clear: increased generic penetration erodes brand-name drug profitability. Winners from HR8143 are generic and biosimilar manufacturers like Viatris ($VTRS) and Teva Pharmaceutical Industries ($TEVA), which will see increased demand and market share. Losers are pharmaceutical companies heavily reliant on brand-name drug sales, including Pfizer ($PFE), Johnson & Johnson ($JNJ), Merck ($MRK), and Amgen ($AMGN). PBMs such as CVS Health ($CVS), Cigna ($CI), and Elevance Health ($ELV) will also experience margin compression due to reduced brand-name drug utilization and rebate opportunities. The bill was introduced by Rep. Matsui, a Democrat, and has 2 cosponsors. While not a committee chair, the nature of the bill aligns with broader Democratic party goals of lowering drug costs, indicating potential for progress. The next step is committee referral and hearings, which will likely occur in late 2026 or early 2027.