In the wake of newly elected President Donald Trump’s recent declaration to eliminate the “middleman” in an effort to lower prescription drug costs, shares of companies that own pharmacy benefit managers (PBMs) took a pullback on Monday. Key industry players such as CVS Health’s (NYSE:) Caremark, Cigna (NYSE:)’s Express Scripts and UnitedHealth Group’s (NYSE:) Optum, which collectively dominate the PBM market in the United States, saw their shares prices are falling after Trump’s comments to the press at Mar-a-Lago today.
Trump’s statement aligns with bipartisan efforts to address the role of PBMs in healthcare. Last week, a bill was introduced by U.S. Senators Elizabeth Warren and Josh Hawley, representing both the Democratic and Republican parties, respectively. The proposed legislation aims to oblige health insurers or pharmaceutical brokers to divest their pharmacy activities within a period of three years. This bill, which also has the support of Representatives Diana Harshbarger and Jake Auchincloss of the Republican and Democratic parties, will be introduced in Congress.
PBMs have become a focal point of research because they play a crucial role in drug price negotiations between various parties, including insurers, pharmacies, and drug manufacturers. They are also responsible for reimbursing pharmacies for prescription drugs covered by their plans.
The market’s reaction to Trump’s comments was clearly visible, with shares of CVS down 3% on Monday afternoon, Cigna down 1.2% and UnitedHealth down 2.8%. These moves underscore the mounting political and regulatory pressure PBMs face as lawmakers from both major parties push for pharmaceutical industry reform.
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