Bill would break up drug managers

HEALTH CARE

Large companies face ban on owning pharmacies

CVS Health, which owns the largest chain of pharmacies in the country, could be forced to divest under proposed federal legislation. JOSÉ A. ALVARADO JR. — THE NEW YORK TIMES

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By Rebecca Robbins and Reed Abelson

The New York Times

A group of prominent Republican and Democratic lawmakers on Wednesday introduced federal legislation that would prohibit companies that own drug middlemen or health insurers from also owning retail pharmacies or those that mail prescriptions to patients. If enacted, the legislation would break up giant health care conglomerates such as UnitedHealth Group and CVS Health.

The legislation is the most aggressive legislative effort in recent years to target those drug middlemen. Known as pharmacy benefit managers, or PBMs, they are companies hired by employers and government programs to oversee their prescription drug benefits. The three largest — CVS Health’s Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx — collectively control 80% of prescriptions in the United States.It’s not clear whether the legislation will gain traction. While there has been a bipartisan push to rein in the largest PBMs with legislation requiring more transparency and modest changes to pricing practices, those bills have stalled in Congress and have been met with tremendous resistance from the powerful health care lobbies. The new legislation signals a renewed effort by lawmakers on both sides of the aisle to take on the issue.

“PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers and driving small pharmacies out of business,” one of the sponsors of the legislation, Sen. Elizabeth Warren, D-Mass., said in a statement.

Sen. Josh Hawley, R-Mo., is the co-sponsor of the Senate bill. A companion bill is being introduced in the House.

The New York Times has reported on how the benefit managers have prioritized their own interests above those of patients, employers and taxpayers.

CVS Health, Cigna and UnitedHealth each own a major health insurer, a pharmacy benefit manager and a pharmacy business. If enacted, the legislation would force them to divest their pharmacy businesses within three years.

CVS owns the country’s largest chain of retail pharmacies. All three conglomerates own warehouse-based pharmacies that send prescriptions to patients through the mail. Critics complain that the conglomerates use their size and leverage to steer patients toward their own pharmacies, increasing costs for employers and government programs while driving independent pharmacies out of business.

The legislation would not seek to directly unwind two major mergers that combined leading PBMs with large health insurers in 2018: CVS Health’s purchase of the insurer Aetna, and the insurer Cigna’s purchase of Express Scripts.

JC Scott, the president of the Pharmaceutical Care Management Association, the lobbying group for pharmacy benefit managers, said in a statement that PBMs helped patients “conveniently, safely and affordably access prescription drugs.” He added that “Congress should be thoughtful in understanding that before they take away consumers’ ability to access their medicines how and where they’d like.”

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

Spokespeople for Express Scripts and Optum Rx did not immediately return a request for comment Wednesday morning.