Lawmakers push for insurers to divest pharmacies: 6 notes

Federal lawmakers introduced a bipartisan bill Dec. 11 that would forbid the parent companies of insurers and pharmacy benefit managers from also owning pharmacy businesses. 

The Patients Before Monopolies Act represents lawmakers' boldest legislative attempt to regulate PBMs in recent years, though it's uncertain whether the bill will gain traction in the House and Senate, according to The New York Times.

Six things to know about the legislation:

1. Sen. Elizabeth Warren, D-Mass., Sen. Josh Hawley, R-Mo., Rep. Diana Harshbarger, R-Tenn., and Rep. Jake Auchincloss, D-Mass., introduced the bill, which would prohibit the joint ownership of PBMs and pharmacies.

2. If enacted, the bill would require healthcare conglomerates that own both entities — including CVS Health, Cigna and UnitedHealth Group — to divest their pharmacy businesses within three years. 

3. The bill would also give federal officials the authority to regulate these divestments and require companies to surrender any revenue made from its pharmacy business while in violation of the law. The Federal Trade Commission would then distribute these funds to communities and consumers who may have been overcharged under the vertically integrated pharmacies, the lawmakers said.

4. CVS' Caremark, Cigna's Express Scripts and UnitedHealth's OptumRx represent the three largest PBMs in the U.S., collectively controlling about 80% of all prescription claims. The lawmakers behind the new legislation argue that the joint ownership of PBMs and pharmacies creates a "gross conflict of interest" that allows companies to achieve bigger profits at the expense of patients and independent pharmacies.

5. The Pharmaceutical Care Management Association, a major lobbying group for PBMs, has contended these claims, arguing that PBMs offer patients convenient access to affordable medications.

"Congress should be thoughtful in understanding that before they take away consumers' ability to access their medicines how and where they'd like," PCMA President J.C. Scott told the Times.

6. In a Dec. 11 statement to Becker's, CVS emphasized the value of its integrated business model, saying it helps connect consumers to accessible, affordable care. The company said it has lowered out-of-pocket drug costs by more than 25% over the last decade and noted that CVS Caremark reimburses independent pharmacies at a higher rate than CVS Pharmacy locations. 

"Any policies that would limit our ability to negotiate with drugmakers and pharmacies would ultimately increase the cost of medicine in the United States, and in many cases, serve as a handout to the pharmaceutical industry," a spokesperson said. 

Editor's note: Becker's has reached out to UnitedHealth Group and Cigna for comment and will update this article if more information becomes available.

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