Shares of UnitedHealth Group, Cigna and CVS Health fell 5% following the killing of CEO Brian Thomson and a new bill aimed at eliminating pharmacy benefit managers (PBMs), CNBC reported.
The three companies, which operate as the nation’s largest private health insurers and drug supply chain intermediaries, also have pharmaceutical businesses. response because of claims that they cause increased drug costs for patients.
The Senate bill, sponsored by Sen. Elizabeth Warren, Democrat of Massachusetts, and Sen. Josh Hawley, Republican of Missouri, would force companies that own PBMs to divest their pharmacy business within three years conflicts of interest such as UnitedHealth Group’s OptumRx, CVS Health’s Caremark and Cigna’s Express Scripts, which are either owned or affiliated with health insurers, “PBMs have manipulated the market to get rich by driving up drug costs, defrauding employers and driving out small pharmacies,” the senator said.
“My new bipartisan bill would eliminate those conflicts of interest by reining in these middlemen.”
Another reason for the stock’s decline appears to be behind the killing of United Health CEO Brian Thompson. Thompson was allegedly killed by 26-year-old Luigi Mangione in what is believed to be a targeted attack in New York City in early December 2024. The day of the shooting, according to The IndependentShares of United Healthcare opened at $610.79 with a week to go. shares fell about 13% to $537.82.
Fellow insurers like Humana and Centene also took a hit, with Mizuho Financial Group health equity strategist Jared Holtz saying the decline was in response to “renewed rhetoric” around insurance companies , that the reaction of investors is as follows. “Do we want to own stocks in this category if there’s a renewed negative focus on the industry now,” Holtz said.
The FTC has been investigating PBMs since 2022 and found that they collectively shipped approximately 80% of the nation’s prescriptions. sitting at the center of the drug supply chain In the US, the groups have been found to negotiate discounts with drug manufacturers on behalf of insurers, in addition to large employers and federal health plans.They also create lists of covered drugs and reimburse pharmacies for prescriptions.
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