(Reuters) – Shares of companies that own pharmacy benefit managers fell on Wednesday after the introduction of a bipartisan bill that would force health insurers or drug brokers to divest their pharmacy businesses.
CVS Health’s Caremark, Cigna’s Express Scripts and UnitedHealth Group’s Optum control the majority of pharmacy benefits management (PBMs) in the U.S., while their parent companies also operate health insurance businesses.
Shares of all three companies fell between 4.8% and 5.5% after the Wall Street Journal first reported news of the bill.
The bill, sponsored by U.S. Senators Elizabeth Warren, a Democrat, and Josh Hawley, a Republican, would force companies that own health insurers or pharmacy benefit managers to divest their businesses that operate pharmacies within three years.
Reps. Diana Harshbarger, a Republican, and Jake Auchincloss, a Democrat, also support the bill, which will be introduced in Congress.
PBMs negotiate prescription drug prices between insurers, pharmacies and drug manufacturers, and reimburse pharmacies directly for prescription drugs covered by their agreed-upon terms.
They have previously come under scrutiny for their influence on prescription drug prices.
“PBMs have manipulated the market to enrich themselves – by driving up drug costs, defrauding employers and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen,” said Senator Warren.
Shares of other insurers such as Elevance, Humana and Centene fell between 1% and 3%.
“The latest introduction of potential legislation to restrict PBM activities and broader vertical integration in healthcare is unlikely to gain traction, although it is difficult to reject it outright,” said Leerink analyst Michael Cherny Partners.
Insurer shares have come under pressure after Brian Thompson, the CEO of UnitedHealth’s health insurance division, was fatally shot outside a Manhattan hotel last week.
(Reporting by Sriparna Roy in Bengaluru; Editing by Devika Syamnath and Vijay Kishore)
