Warren, Hawley propose PBM Act to break up CVS, UnitedHealth

One of the Senate's most liberal members has teamed up with one of its most conservative on legislation that would break up healthcare behemoths such as UnitedHealth Group, CVS Health and Cigna.

Sens. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), joined in the House by Reps. Diana Harshbarger (R-Tenn.) — a pharmacist — and Jake Auchincloss (D-Mass.), unveiled the Patients Before Monopolies Act of 2024, or PBM Act, on Wednesday. The measure would prohibit corporations that own pharmacy benefit managers or health insurers from also owning pharmacies.

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This would have a dramatic effect on some of the biggest companies in the healthcare sector.

UnitedHealth Group owns the insurance subsidiary UnitedHealthcare and a leading PBM, OptumRx, and provides mail-order and specialty pharmacy services. CVS Health is best known for its drugstore chain, but also sells health insurance through Aetna and PBM services through CVS Caremark, and has extensive mail-order pharmacy and specialty pharmacy divisions. The insurance company Cigna owns the PBM Express Scripts, offers mail-order pharmacy and is ramping up its presence in the specialty pharmacy market.

Under the PBM Act, companies that own health insurers or PBMs would have to divest their pharmacy properties within three years.

"It is important to make a central point about PBMs," Warren said in an interview. "They are the middlemen, and when they are permitted to own others in the chain, they have opportunities to cheat the American taxpayer and to cheat every customer six ways to Christmas."

The bill would give the Justice Department, the Health and Human Services Department, the Federal Trade Commission and state attorneys general the authority to order companies to sell off assets they still hold after three years. Companies would be required to hand over revenue they collected from those operations to the FTC, which would distribute the money to patients "overcharged at vertically integrated pharmacies," according to a news release.

“The insurance monopolies are ruining American healthcare. Patients and independent pharmacies are paying the price. This legislation will stop the insurance companies and PBMs from gobbling up even more of American healthcare and charging American families more and more for less,” Hawley said in the news release.

The Pharmaceutical Care Management Association, which represents PBMs, blasted the measure.

"This proposed legislation would severely limit access to safe and affordable pharmacies that patients value and rely on for prescription drugs," PCMA President and CEO JC Scott said in a news release. “Congress should be thoughtful in understanding the value that PBMs provide before taking away consumers’ ability to access their medicines how and where they’d like, while making the cost of prescription drugs more expensive.”

Congress has failed to advance significant, if less ambitious, PBM legislation over the past two years, and the PBM Act is not likely to be considered before Congress adjourns for the year. Warren, Hawley, Harshbarger and Auchincloss may be setting themselves up for a real push in 2025.

The uncommon pairing of Warren, an outspoken progressive proponent of antitrust enforcement, and Hawley, an arch-conservative ally of President-elect Donald Trump, underscores the growing discontent on Capitol Hill with consolidation in the healthcare industry, especially the kind of vertical integration that built companies such as UnitedHealth Group and CVS Health into powerhouses.

"There's a lot of talk now about what we need to do about PBMs. And it is important that, instead of nibbling around the edges and kind of looking for a piece here or a piece there, we go straight to the heart of the problem," Warren said. "That is the conflicts and the ways in which, without any regulations, PBMs just get to play everybody off against everybody else, keep it all in secret, and make billions and billions of dollars for themselves."

In the news release, the PBM Act's sponsors highlight a report the FTC issued in July, which shows PBMs pay mail-order pharmacies with the same parent companies up to 200 times more for medicines than they pay other pharmacies.

Congress has taken up numerous bipartisan bills aimed at PBMs, including one measure the House overwhelmingly passed exactly a year ago. House and Senate committees have approved several other bills targeting PBM business practices and finances but supporters have been unable to secure floor votes.

The bills vary in their approach and scope, but key provisions include greater transparency about fees, pharmaceutical prices and rebates, and rules governing how PBMs are compensated.