From CNBC: 2024-12-11 16:13:22

Shares of major health-care companies, including UnitedHealth Group, Cigna, and CVS Health, dropped by 5% on Wednesday due to concerns over potential changes to their business models from lawmakers and patients.

The stock decline was triggered by bipartisan legislation aiming to break up pharmacy benefit managers (PBMs) like Optum Rx, Caremark, and Express Scripts, owned by health insurers, due to allegations of inflating drug costs for profit.

The legislation, sponsored by Sens. Elizabeth Warren and Josh Hawley, would force health companies to divest their pharmacy businesses within three years to eliminate conflicts of interest and protect patients from rising drug costs.

PBMs play a crucial role in the U.S. drug supply chain, negotiating rebates with manufacturers, creating formularies, and administering 80% of the nation’s prescriptions, but they have faced scrutiny for their practices since 2022.

Public criticism of insurance companies and PBMs has intensified following the fatal shooting of Brian Thompson, CEO of UnitedHealth Group’s insurance arm, leading to further scrutiny and calls for regulatory action to prevent conflicts of interest and protect patients and pharmacies.



Read more at CNBC: Health-care stocks fall after Warren PBM bill, Brian Thompson shooting