Josh Hawley, Elizabeth Warren back bill to force health insurance companies to sell pharmacy divisions

A bipartisan group of lawmakers introduced federal legislation on Wednesday aimed at preventing companies that own drug "middlemen" or health insurers from owning retail pharmacies. The legislation targets major healthcare companies like UnitedHealth Group and CVS Health in an effort to “start putting patients first.”

The legislation is considered the most aggressive effort in recent years to curb the power of pharmacy benefit managers (PBMs), the intermediaries that employers and government programs hire to manage prescription drug benefits. The three largest PBMs, CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx, account for 80 percent of prescriptions in the country, according to a report by the New York Times.

Despite having bipartisan support in Congress for more transparency among PBMs, previous efforts have stalled in Congress in part due to large resistance from healthcare lobbies. The new legislation, however, shows that lawmakers from both parties are seeking renewed efforts to enact such change.

Among the sponsors of the legislation are Republican Senator Josh Hawley and Democratic Senator Elizabeth Warren. Warren condemned the current market structure, stating, “PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers and driving small pharmacies out of business."

Additionally, Senator Hawley said on X: “The insurance companies are out of control. They need to be broken up. No more buying up doctors’ practices. No more owning pharmacies. Start putting patients first. That’s what my new bill would do.”

Under the proposed legislation companies like CVS Health, Cigna, and UnitedHealth, which each own a major health insurer, pharmacy benefit manager, and a retail pharmacy business, would be forced to divest their pharmacy business within three years. CVS, for example, owns the largest chain of retail pharmacies in the country, and all three conglomerates operate warehouse-based pharmacies that deliver prescriptions by mail.

Critics have argued that these companies use their market power to steer patients to their own pharmacies, which in turn increases costs and drives independent pharmacies out of business. 

The president of the PBM lobbying group Pharmaceutical Care Management, JC Scott, said in a statement that PBMs help patients “conveniently, safely and affordably access prescription drugs.” He also argued that “Congress should be thoughtful in understanding that before they take away consumers’ ability to access their medicines how and where they’d like,” per the New York Times. 

Similarly, David Whitrap, a spokesperson for CVS, cautioned against policies that “ultimately increase the cost of medicine in the United States, and in many cases, serve as a handout to the pharmaceutical industry.”