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.

Last year, the American Economic Liberties Union launched an effort to lobby for breaking up the big healthcare companies, which the organization said would help to eliminate conflicts of interest.

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.