Congress is taking a significant step with new legislation that aims to reshape the health care landscape. This move could have far-reaching implications for major players like UnitedHealth Group, CVS Health, and Cigna.

Legislation Forces Big Health Care Players to Sell Pharmacies

Background and Context

Members of Congress are pushing for legislation that could break up some of the nation's largest health care conglomerates. The federal legislation, introduced on Wednesday by a group of prominent Republican and Democratic lawmakers, prohibits companies owning drug middlemen or health insurers from also owning pharmacy businesses. This is the most aggressive legislative effort in recent years to target pharmacy benefit managers (P.B.M.s), which control a significant portion of prescriptions in the US. 1: The three largest P.B.M.s - CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth's Optum Rx - collectively hold 80 percent of prescriptions. This dominance has raised concerns about market manipulation and increased drug costs. The new legislation signals a renewed effort by lawmakers to address these issues. 2: While there has been a bipartisan push to rein in the largest P.B.M.s with legislation requiring more transparency and modest changes to pricing practices, those bills have stalled in Congress. The powerful health care lobbies have put up significant resistance, but the new legislation shows that lawmakers on both sides of the aisle are determined to take on the issue.

Impact on UnitedHealth Group, CVS Health, and Cigna

1: Under the new legislation, UnitedHealth Group, CVS Health, and Cigna would be forced to sell their pharmacies within three years. This is a major blow to these companies, which have built significant pharmacy businesses over the years. It will require them to restructure their operations and potentially find new ways to generate revenue. 2: For UnitedHealth Group, which has Optum Rx as its pharmacy business, this could mean a significant change in its business model. The company will need to focus on its core health insurance business and find alternative ways to provide pharmacy services to its members. For CVS Health, which has Caremark, the sale of its pharmacy could have a major impact on its retail operations and its ability to provide one-stop health care services.

Resistance and Future Outlook

1: It's not clear whether the legislation will gain traction. The powerful health care lobbies have shown that they are willing to fight to protect their interests. However, the fact that lawmakers on both sides of the aisle are supporting the legislation gives it some momentum. 2: If the legislation does pass, it will have a significant impact on the health care industry. It could lead to increased competition in the pharmacy market, which could ultimately benefit consumers by lowering drug costs. But it will also require these companies to adapt and find new ways to operate in a changing regulatory environment.