Bipartisan Bill Aims to Break Up Healthcare Giants and Tackle Prescription Costs

A significant move to reshape the American healthcare landscape was unveiled on Wednesday, as a bipartisan coalition of lawmakers introduced federal legislation aimed at breaking up major health care conglomerates such as UnitedHealth Group and CVS Health. The proposed law seeks to prohibit companies that own pharmacy benefit managers (P.B.M.s) or health insurers from also owning retail pharmacies or mail-order prescription services. This legislative initiative represents one of the most aggressive actions in recent years targeting the growing influence of P.B.M.s—entities hired by employers and government programs to manage their prescription drug benefits. Currently, the three largest P.B.M.s—CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth's Optum Rx—dominate the market, controlling approximately 80 percent of prescriptions dispensed in the United States. The introduction of this bill comes amid increasing frustrations over the pricing practices and market manipulation attributed to P.B.M.s. Senator Elizabeth Warren, a Democrat from Massachusetts and one of the bill's sponsors, emphasized the negative impact of these entities on drug costs and small pharmacies, stating, "P.B.M.s have manipulated the market to enrich themselves—hiking up drug costs, cheating employers, and driving small pharmacies out of business." Co-sponsoring the Senate bill is Senator Josh Hawley, a Republican from Missouri, illustrating a rare convergence of interests across party lines on a healthcare issue that many agree needs urgent attention. A companion bill is expected to be introduced in the House, signaling a concerted effort to address the growing concerns over the consolidation of healthcare services. Despite this renewed push, the bill's future remains uncertain, as previous attempts to regulate P.B.M.s have faltered in Congress due to powerful lobbying from the healthcare sector. While earlier legislative efforts aimed at enhancing transparency and enacting modest reforms have been stalled, this new bill appears to reflect a more aggressive stance from lawmakers who see the need for comprehensive reform. Under the new legislation, CVS, Cigna, and UnitedHealth would be required to divest their pharmacy businesses within three years, effectively dismantling their extensive control over multiple facets of the healthcare system. Currently, these conglomerates not only own health insurance companies but also operate significant pharmacy operations, including retail chains and mail-order pharmacies. Critics argue that this vertical integration allows them to steer patients towards their own services, consequently inflating costs for employers and government programs while threatening the viability of independent pharmacies. However, the bill does not seek to unravel two high-profile mergers from 2018—CVS's acquisition of insurer Aetna and Cigna's purchase of Express Scripts—indicating a focused approach on the more recent market dynamics rather than a complete overhaul of the past consolidations. In response to the proposed legislation, JC Scott, president of the Pharmaceutical Care Management Association—the lobbying group for P.B.M.s—defended their role in the healthcare system. He asserted that P.B.M.s play a crucial part in ensuring patients can access prescription drugs conveniently and affordably, urging Congress to carefully consider the implications of such sweeping changes. CVS spokesperson David Whitrap echoed these sentiments, cautioning that the legislation could lead to increased medication costs for consumers and potentially benefit pharmaceutical companies more than patients. As the debate unfolds, the pressure mounts on Congress to address the concerns of rising drug costs and the dominance of large healthcare conglomerates, with the future of patients, employers, and independent pharmacies hanging in the balance. The coming weeks will be critical as lawmakers weigh the merits and potential consequences of this landmark legislative proposal.