Shares of major health-care companies, including Cigna, experienced declines following reports of new bipartisan legislation targeting Pharmacy Benefit Managers (PBMs). The proposed bill, sponsored by Senators Elizabeth Warren and Josh Hawley, aims to compel companies that own health insurers or PBMs to divest their pharmacy businesses within three years.
This legislation directly addresses the integrated business model employed by large healthcare conglomerates, where PBMs like Cigna's Express Scripts are connected to health insurers and collectively administer approximately 80% of the nation's prescriptions. Lawmakers argue that this structure creates a 'gross conflict of interest' that allows companies to profit at the expense of patients and independent pharmacies.
The bill's introduction signals heightened legislative pressure on the PBM industry, which has faced years of scrutiny from Congress and the Federal Trade Commission over allegations of inflating drug costs. If enacted, this reform could necessitate significant restructuring for Cigna and other integrated health companies.
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