Shares of the three largest pharmacy benefit managers' parent companies took a hit Dec. 16, after President-elect Donald Trump vowed that his administration would work to "knock out the middlemen."
"We have a thing called the middleman," Mr. Trump said during a one-hour news conference with reporters Dec. 16. "We're going to knock out the middlemen. We're going to get drug costs down at levels that nobody has ever seen before." He added that PBMs have been a major point of discussion with Robert F. Kennedy Jr. and Mehmet Oz, MD, his respective picks to lead HHS and CMS.
Following his comments, shares of CVS Health fell by more than 4% Monday afternoon, UnitedHealth Group shares slipped more than 3.5% and Cigna declined by 2.6%. The companies operate the nation's three largest PBMs — CVS Caremark, Optum RX and Express Scripts — which collectively control around 80% of all U.S. prescription claims.
Mr. Trump's remarks signal the potential for heightened PBM scrutiny and regulation under his administration. While they were not a major focus on the campaign trail, his administration in 2018 proposed a plan that would have upended PBM business models by altering how the government pays for drugs, though the plan was never enacted.
In recent years, the largest PBMs have been the subject of numerous bipartisan probes and legislative proposals. On Dec. 11, federal lawmakers introduced the Patients Before Monopolies Act, a bipartisan bill that would require the parent companies of insurers and PBMs to divest their pharmacy business. The bill's sponsors argued joint ownership presents a "gross conflict of interest" that pushes out independent pharmacies.
PBMs counter claims that their practices drive up drug costs, asserting that their business models ensure patients have convenient access to affordable medications.
"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 CVS spokesperson recently said in a statement to Becker's, adding that its PBM reimburses independent pharmacies at higher rates than its own retail pharmacy locations.