Senators Warren and Hawley introduce bill to break up vertically integrated PBMs

Senators Elizabeth Warren, a Democrat from Massachusetts, and Josh Hawley, a Republican from Missouri, have introduced a bill to break up the largest insurance companies and pharmacy benefit managers (PBMs).

“There’s no question that massive healthcare companies have created layers of complexity to jack up the price of everything from prescription drugs to a visit to the doctor. The only way to make health care more affordable is to break up these healthcare conglomerates,” Warren said in a news release.

The senators said the larger healthcare companies allow these corporations to put profits over the interests of patients, taxpayers, employers, and independent providers, adding additional costs to healthcare and leaving independent doctors and pharmacists unable to compete. They point out there is precedent for government prohibitions on joint ownership to promote competition, including in the railroad and banking industries.

Called the Break Up Big Medicine Act, the bill would:

• Prohibit a parent company from owning a medical provider or management services organization AND a PBM or an insurer;
• Prohibit a parent company of a prescription drug or medical device wholesaler from owning a medical provider or management services organization;
• Require that a company in violation of these provisions come into compliance within one year of the bill’s enactment;
• Create automatic penalties if a company fails to comply in a timely manner, including disgorgement of profits and forced sales of assets;
• Enable the Federal Trade Commission (FTC), Department of Health and Human Services, Department of Justice (DOJ), state attorneys general, and private parties to bring lawsuits against violators; and
• Allow the FTC and DOJ to review and block future actions that would recreate the conflicts of interest prevented by the bill.

“It will be interesting to see if this legislation gains traction in the wake of the federal PBM legislation and the DOL Transparency Rule, or whether requiring wholesale divestiture of vertically integrated payers is a bridge too far for policymakers and Congress,” Theresa C. Carnegie, an attorney with Mintz, told Managed Healthcare Executive.

There have been two previous bills that have targeted vertical integration in healthcare. The first was the Patients Before Monopolies Act, which was introduced in December 2024 by Warren and Hawley. This would have prohibited joint ownership of PBMs and pharmacies.

Warren and Hawley’s new bill expands the structural separation provisions of the Patients Before Monopolies Act to additional segments of the healthcare supply chain – i.e. payers, providers, and wholesalers.

Additionally, a bill introduced in September 2025, the Patients Over Profits Act, targeted vertical integration with clinics/providers who receive payment for services under Medicare Part B or C. This would have specifically excluded pharmacies, so it is relevant to the discussion of vertical integration, generally, but not the insurer/PBM/pharmacy vertical integration.

“Arkansas attempted legislation that would have prevented PBMs from owning pharmacies in the state, and that law is currently on pause due to a preliminary injunction,” Carnegie said. “Legal challenges to the Break Up Big Medicine Act would be different, but I expect it to face quite a bit of opposition from payers, PBMs, and wholesalers. I would not peg the bill’s chances of ultimate passage very high right now, but I think a lot will depend on whether Congress feels that it has addressed the PBM industry with the most recent 2026 [funding law] or whether it feels it needs to go further.”

A spokesperson for the Pharmaceutical Care Management Association, the trade organization for PBMs, said the bill isn’t a priority in Congress. A survey sponsored by PCMA has found that employers are satisfied with their PBM relationship, the savings they received, and the transparency that is provided.

Executives from CVS Health, which owns the PBM CVS Caremark and the insurance company Aetna, told Managed Healthcare Executive that they welcome the opportunity to work with policymakers on ways to improve the entire U.S. healthcare system. But they said those policies should be judged on whether they are lowering costs or raising them, whether they are integrating the patient experience or further fragmenting it, and whether they are improving health outcomes or harming them. 

During CVS Health’s recent earnings call with investors, CEO David Joyner said “We are taking the lead to address some of the biggest challenges in the U.S. healthcare system — its cost, its complexity, and the fragmentation that exists today. By combining our unique set of capabilities, we can provide a connected solution for consumers that delivers better experiences and improves health outcomes at a lower cost. Aetna members who have a combined medical and pharmacy offering have lower medical costs. Aetna members who consistently use CVS Pharmacy have higher medication adherence and lower ER utilization.”