US Healthcare Companies' Shares Decline Amid Potential PBM Legislation

Shares of prominent US healthcare companies fell on Wednesday amid news of potential legislation targeting pharmacy benefit managers (PBMs).

The proposed bill, currently being drafted by lawmakers, aims to compel PBMs to sell off the pharmacies they own, representing a significant intervention in the operational model of PBMs, which act as intermediaries in the drug prescription process.

UnitedHealth Group (NYSE:UNH) saw its shares decrease by up to 5.6%, while both Cigna (NYSE:CI) and CVS Health (NYSE:CVS) witnessed declines of up to 5.3%.

The S&P 500 Managed Care Index also felt the impact, falling up to 4.7%, marking its lowest point since June.

According to Leerink Partners, the likelihood of the bill's passage is low, but it is noted as the most aggressive measure proposed to date against the PBM industry.

Elizabeth Anderson from Evercore ISI commented on the situation, observing that this legislative effort is the latest in a series of government actions aimed at increasing regulation of PBMs.

This focus is partly due to the growing financial strain on patients and the fact that purchasing prescription drugs is a common aspect of voter interaction with their healthcare coverage.

Anderson highlighted the bipartisan nature of the initiative as incremental but assessed its chance of passing as slim, particularly as Congress is nearing the end of its current session.

She mentioned that while the bill poses headline risk at present, there might be a higher probability of such legislation passing in 2025, although still below a 50% likelihood.

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