Bipartisan group to push for break up of pharmacy-benefit managers (update)

Update 12:40pm: Updates shares, adds link to proposed bill.

A bipartisan group of lawmakers introduced legislation to break up pharmacy-benefit managers.

Sen. Elizabeth Warren (D. Mass) and Josh Hawley (R. MO) proposed a bill that would force companies that own health insurers or pharmacy-benefits managers to sell off their pharmacy business, according to a statement from the lawmakers on Wednesday. The bill calls for a company in violation of the PBM Act divest its pharmacy business within three years.

A companion house bill was also expected to be introduced on Wednesday, according to a WSJ report, which broke the news of the proposed bill.

The three biggest PBMs include CVS Health’s (NYSE:CVS) Caremark, Cigna’s (NYSE:CI) Express Scripts and UnitedHealth’s (NYSE:UNH) OptumRx. Shares of CVS, Cigna and UnitedHealth all slid 5%.

“PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business, ” Warren said, according to the statement. “My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen.”

The bipartisan bills come after the Federal Trade Commission filed suit against Optum Rx, Caremark Express Scripts in late September, accusing the trio of inflating the prices of insulin drugs to boost profits.

The FTC in July released a report as part of an investigation into pharmacy benefit managers (PBMs), accusing them of profiting at the expense of patients and independent pharmacies, thus contributing to higher drug prices.