A bipartisan bill is being introduced to the US Congress, aiming to force health insurers or drug middlemen to divest their pharmacy businesses. CVS Health, Cigna, and UnitedHealth Group would be affected by the bill, which would give companies three years to break up their pharmacy operations.
These companies dominate the pharmacy benefit management (PBM) industry in the US, while also operating health insurance businesses. The PBM industry negotiates prescription drug prices between insurers, pharmacies, and pharmaceutical manufacturers.
Senator Elizabeth Warren, a Democrat, and Senator Josh Hawley, a Republican, are sponsoring the bill, which aims to reduce conflicts of interest among PBMs. They argue that these middlemen have manipulated the market to increase healthcare costs for employers and drive small pharmacies out of business.
The introduction of the bill has led to a decline in shares for companies owned by pharmacy benefit managers, with CVS Health seeing a 4.8% drop and Cigna experiencing a 5.5% fall. Other insurers like Elevance, Humana, and Centene also saw their stock prices drop between 1-3%.
Analysts believe that the bill’s introduction may not lead to significant changes, but it is an attempt to regulate the PBM industry. The news comes after the fatal shooting of UnitedHealth Group’s CEO outside a Manhattan hotel last week, putting pressure on insurers’ shares.
Source: https://www.reuters.com/business/healthcare-pharmaceuticals/health-insurer-stocks-fall-wsj-says-lawmakers-set-break-up-pharmacy-benefit-2024-12-11