UnitedHealth, rival shares tumble as lawmakers push to break up drug middlemen

Core Viewpoint - The introduction of a bipartisan bill aimed at forcing health insurers and pharmacy benefit managers (PBMs) to divest their pharmacy businesses has led to a decline in shares of major companies in the sector, including CVS Health, Cigna, and UnitedHealth Group. Group 1: Legislative Impact - A bipartisan bill sponsored by Senators Elizabeth Warren and Josh Hawley will require companies that own health insurers or PBMs to divest their pharmacy operations within three years [3][7]. - The bill is supported by Representatives Diana Harshbarger and Jake Auchincloss and will be introduced in Congress [3]. Group 2: Market Reaction - Shares of CVS Health, Cigna's Express Scripts, and UnitedHealth Group's Optum fell between 4.8% to 5.5% following the news of the bill [2]. - Other insurers such as Elevance, Humana, and Centene experienced a decline in shares ranging from 1% to 3% [6]. Group 3: PBM Operations and Criticism - PBMs negotiate prescription drug prices among insurers, pharmacies, and drugmakers, and they directly reimburse pharmacies for drugs under agreed terms [4]. - PBMs have faced criticism for their role in inflating drug costs and creating conflicts of interest, as highlighted by Senator Warren [5].