Lawmakers introduce bill to force pharmacy benefit manager companies to divest, causing healthcare stock drop

From Investing.com: 2024-12-11 15:48:39

Shares of pharmacy benefit manager companies, including CVS Health, Cigna, and UnitedHealth Group, dropped 4.8% to 5.5% after a bipartisan bill was introduced to force them to divest their pharmacy businesses. The bill, sponsored by Senators Warren and Hawley, aims to address conflicts of interest and manipulation in the industry.

The bill will require companies owning health insurers or pharmacy benefit managers to divest their pharmacy businesses within three years. It has bipartisan support from Representatives Harshbarger and Auchincloss, and aims to increase transparency and fairness in prescription drug pricing.

PBMs have faced criticism for their influence over drug prices, with Senator Warren stating they have manipulated the market for their own gain. The bill seeks to address these conflicts of interest and level the playing field for pharmacies, insurers, and drugmakers.

Shares of insurers like Elevance, Humana, and Centene also fell between 1% and 3% following the news. Analysts believe the legislation may face challenges gaining traction but acknowledge the potential impact on the healthcare industry.

The healthcare industry is facing increased scrutiny, with the recent tragic shooting of UnitedHealth’s CEO adding to the pressure on insurers. The introduction of new legislation and ongoing investigations are likely to shape the future of the industry and impact companies across the sector.



Read more at Investing.com: Healthcare stocks fall as lawmakers push for bill to break up drug middlemen By Reuters