Shares of health insurers, including CVS Health (CVS), UnitedHealth (UNH), and Cigna Group (CI), declined in trading on Tuesday after President-elect Donald Trump vowed to eliminate drug-industry middlemen. These companies control major pharmacy benefit managers (PBMs), which have been criticized by both Republicans and Democrats for escalating drug prices.
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Trump Calls PBMs the “Horrible Middleman”
Trump criticized PBMs following a dinner with leaders from Pfizer (PFE), Eli Lilly (LLY), and Robert F. Kennedy Jr., his nominee for Health and Human Services Secretary. Speaking to reporters, he remarked, “The horrible middleman that makes more money, frankly, than the drug companies, and they don’t do anything except they’re a middleman. We’re going to knock out the middleman.”
Legislative Pressure Is Intensifying on PBMs
Adding to the pressure, Congress is reportedly considering restrictions on PBMs as part of a year-end spending package, according to Bloomberg. The Pharmaceutical Care Management Association warned that the proposed changes could overhaul PBM compensation structures, potentially impacting profitability and raising healthcare costs.
Separately, bipartisan lawmakers introduced a bill last week that would require companies owning insurers and PBMs to divest their pharmacy operations. If passed into law, the bill could disrupt a profitable segment of the healthcare industry, which has increasingly relied on these integrated models for growth.
Are Health Stocks a Good Investment?
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