Well being care shares fall as lawmakers push for invoice to interrupt up pharmaceutical middlemen By Reuters

(Reuters) – Shares of corporations proudly owning pharmacy profit managers fell on Wednesday after the introduction of a bipartisan invoice that might drive well being insurers or pharmaceutical middlemen to divest their pharmaceutical companies.

CVS Well being’s Caremark (NYSE:), Cigna’s Specific Scripts (NYSE:) and UnitedHealth Group’s (NYSE:) Optum management the vast majority of pharmacy profit administration (PBM) in the USA, whereas their dad or mum corporations additionally function well being companies. insurance coverage corporations.

Shares of the three corporations fell 4.8% to five.5% after The Wall Road Journal first reported information of the invoice.

The invoice, sponsored by U.S. Senators Elizabeth Warren, Democrat, and Josh Hawley, Republican, would require corporations that personal well being insurers or pharmacy profit managers to divest their pharmacy working companies inside three years.

Reps. Diana Harshbarger, a Republican, and Jake Auchincloss, a Democrat, additionally assist the invoice, which will likely be launched in Congress.

PBMs negotiate prescription drug costs between insurers, pharmacies, and drug producers, and reimburse pharmacies immediately for prescribed drugs included within the agreed-upon phrases.

They’ve already come underneath shut scrutiny for his or her affect on prescription drug costs.

“PBMs have manipulated the market to counterpoint themselves – by elevating drug costs, dishonest employers, and driving small pharmacies out of enterprise. My new bipartisan invoice will resolve these conflicts of curiosity by reining in these middlemen.” , stated Senator Warren.

Shares of different insurers corresponding to Elevance, Humana (NYSE:) and A whole lot (NYSE:) fell between 1% and three%.

“The most recent introduction of potential laws to limit PBM operations and broader vertical integration of healthcare is unlikely to realize traction, though it’s troublesome to dismiss out of hand,” Michael stated Cherny, analyst at Leerink Companions.

Insurer shares got here underneath stress after Brian Thompson, CEO of UnitedHealth’s medical health insurance unit, was fatally shot outdoors a Manhattan lodge final week.