[Edaily Reporter NA EUN-KYUNG ] With the “Blue Wave”—in which the Democratic Party secured control of both the Senate and the House of Representatives in the U.S. midterm elections—now a reality, changes are expected in the U.S. operations of domestic biosimilar companies. The Democratic Party’s push to expand health insurance coverage and reduce medical costs could increase prescribing opportunities for relatively affordable biosimilars. On the other hand, price cuts for originator biologics could exert additional downward pressure on biosimilar prices. Tighter regulations on pharmacy benefit managers (PBMs), which dominate the U.S. pharmaceutical distribution market, are also cited as a factor that could alter the sales strategies of Korean companies.

On the 9th, Samjung KPMG released a report titled “2026 U.S. Midterm Elections: U.S. Policy and the Korean Industry in the Wake of the Blue Wave.” While noting that actual institutional changes may be limited given the president’s veto power and the administration’s authority to enforce policies, the report projected that the Democratic Party would push for the expansion of Medicare drug price negotiations, the restoration of Obamacare (ACA) premium subsidies, and PBM reform.

The core of the PBM reform the Democrats intend to pursue is addressing the opaque rebate practices and conflicts of interest within PBMs. In particular, in their healthcare policy blueprint released ahead of the midterm elections, the Democrats proposed separating PBMs from their affiliated pharmacies as a key reform measure. The aim is to restrict practices where PBMs supply medications in a way that favors their affiliated pharmacies or steer prescriptions toward specific products.

Although legislation to improve PBM compensation structures and rebate transparency was enacted in early February through a bipartisan agreement, the recent election has increased the likelihood of Democratic-led efforts to strengthen related regulations and enhance congressional oversight.

Expanded Insurance Coverage Expected to Increase Prescription Opportunities for Biosimilars

First, the domestic biosimilar industry is focusing on reducing medical costs and expanding health insurance

coverage

. This is because improved access to medical care for insured individuals could lead to increased medication use among patients who previously could not afford treatment. Biosimilars, which are less expensive than originator products, can also meet the demand for cost savings from insurers and healthcare providers.

An official from the biosimilar industry explained, “The trend toward lowering drug prices stems from policy demands to supply more affordable medications in greater quantities,” adding, “Under the current circumstances, we can see that the atmosphere is primarily one where opportunities for biosimilars are expanding.”

Another industry representative also emphasized, “As drug price reductions improve patient access, the market itself could expand.” This suggests that patients who previously hesitated to seek treatment due to high prices may now opt for treatment following the launch of biosimilars, leading to an increase in prescription volumes.

However, policies aimed at reducing healthcare costs do not necessarily work in favor of biosimilar companies. This is because if Medicare drug price negotiations expand and the prices of originator drugs decrease, the relative price competitiveness of biosimilars could weaken. To maintain the price differential with originator drugs, biosimilar manufacturers may also face pressure to further lower their selling prices.

Hwang Ju-ri, Head of the External Cooperation Division at the Korea Bio Association, explained, “The trend toward reducing healthcare costs could serve as an opportunity to increase demand for biosimilars and improve market access,” but added, “If the prices of originator drugs fall, narrowing the price gap with biosimilars, competition is likely to intensify.”

In response, a biosimilar industry official acknowledged, “It is true that price cuts for originator drugs could lead to further price reductions for biosimilars,” but predicted that the expansion of opportunities for biosimilars would have a greater impact on the business. “The U.S. market has a complex drug distribution system and is entangled with various stakeholders, so it may not be easy for originator drugs to benefit from price cuts in the short term,” the official noted.

Will the PBM Rebate Structure Change?…Distribution Competitiveness More Important Than Price

Another variable is the PBM reform that the Democratic Party is expected to push for. In the U.S., PBMs are companies that negotiate drug prices and rebates with pharmaceutical companies on behalf of insurers and manage formularies—the lists of drugs covered by insurance. The selection of which drugs are covered by insurance has a significant impact on actual prescription volumes and market share.

In the U.S., the practice of pharmaceutical companies offering high rebates to PBMs in exchange for favorable listing of their drugs in formulary has long been criticized. There has also been criticism that the pricing structure is opaque, as the drug price paid by patients, the amount covered by insurers, and the amount actually received by pharmaceutical companies differ from one another.

PBM reform is a policy aimed at increasing transparency regarding rebates and fees within this structure and limiting the practice of linking PBM revenue to drug prices or rebate amounts.

Some of these reforms have already been enacted into law. Through legislation passed last February, the U.S. established regulations requiring that PBM compensation under Medicare Part D be separated from drug prices and rebates, and mandating that PBMs pass on the full amount of rebates received to the insurance plan administrator for employer-sponsored health insurance. Key provisions will be phased in starting in 2028–2029. Following the Democratic Party’s takeover of Congress, attention is focused on whether additional regulations and strengthened oversight will be implemented.

From the perspective of domestic companies, PBM reform presents both an opportunity and a challenge. If rebate-driven practices for formulary inclusion are improved, market access for highly price-competitive biosimilars could increase. Conversely, if PBMs’ contracting and distribution methods change, companies may need to restructure their existing sales networks.

In particular, it is worth noting that major U.S. PBMs are expanding the distribution of biosimilars using private labels (PL). As PBMs build their own sales networks and supply specific biosimilars under their own brands, securing distribution channels—not just price competition—is becoming increasingly important for manufacturers.

An industry insider explained, “Currently, three major U.S. PBMs are operating separate distribution channels to supply biosimilars under their own private labels,” adding, “As a result, biosimilar companies need to further diversify their U.S. market entry strategies—beyond negotiations with existing insurers for listing—to include private labels and public tenders.”

In fact, last year, Samsung Bioepis signed private-label supply agreements for its Stelara biosimilar “Pyzchiva” (active ingredient: ustekinumab) with Cordavis (operated by CVS Caremark) and Quallent (operated by Express Scripts)—two of the top three U.S. PBMs.

Analysts note that profitability is also heavily influenced by contract terms with PBMs rather than the publicly disclosed price. In the U.S., the manufacturer’s actual revenue differs from the wholesale acquisition cost (WAC) of a drug, as it reflects various discounts and rebates. Consequently, even if the publicly disclosed price decreases, the manufacturer’s revenue may actually increase if the burden of rebates is reduced to a greater extent.

Another industry insider emphasized, “In the U.S., a lower drug price does not necessarily mean a decline in the manufacturer’s profitability,” adding, “It is a market where how rebates are structured through negotiations with insurers or PBMs is far more important.”

For this reason, the extent to which Blue Wave will benefit domestic biosimilar companies appears to depend not only on the competitiveness of individual products but also on how agilely they respond to changes in the local U.S. distribution structure.

Regarding the impact of U.S. drug price reduction policies on domestic biosimilar companies, Director Hwang stated, “Rather than making a definitive judgment in one direction or another, we must consider the possibility and timing of price negotiations for each product, insurance coverage listing, prescribing preferences, and distribution networks.”