Pharmacy-benefit managers (PBMs) have been scrutinized for their role in drug distribution for years. Now a bipartisan group of lawmakers is threatening to break up the companies behind these so-called drug middlemen.
What To Know: According to a Wall Street Journal report, Sen. Elizabeth Warren (D.-Mass.) and Sen. Josh Hawley (R.-Mo.) have sponsored a Senate bill that would require the companies that own health insurance units or PBMs to divest those businesses over the next three years.
A companion bill was also reportedly introduced in the House on Wednesday.
The legislation could cut off a significant source of revenue for these companies and bring an end to ongoing frustration for patients.
"PBMs have manipulated the market to enrich themselves - hiking up drug costs, cheating employers, and driving small pharmacies out of business," Warren said.
Hawley added that the legislation will stop health care companies from charging "more and more for less."
CVS Health Corp's (NYSE: CVS) Caremark, Cigna Group's (NYSE: CI) Express Scripts and UnitedHealth Group Inc's (NYSE: UNH) OptumRx are the three largest PBMs. Shares of these companies turned lower Wednesday when news of the bills surfaced.
"Any policies that would limit our ability to negotiate with drugmakers and pharmacies would ultimately increase the cost of medicine in the United States, and in many cases, serve as a handout to the pharmaceutical industry," a CVS Health spokesperson reportedly said.
The report indicates the bills are not likely to gain traction in Congress until next year, but supporters are attempting to lay the groundwork for potential passage in 2025.
The role of PBMs in the healthcare industry has been challenged by several dissatisfied patients across social platforms following the murder of UnitedHealthcare CEO Brian Thompson. Luigi Mangione has been charged with killing Thompson.
CVS, CI, UNH Price Action: CVS shares closed Wednesday down 6.15% at $51.76, Cigna Group closed the session down 5.57% at $294.03 and UnitedHealth closed down 5.60% at $533.53, according to Benzinga Pro.