Health Insurers' Shares Drop Amid Legislation News

(Reuters) – Shares of health insurers such as UnitedHealth (NYSE:UNH) and CVS Health (NYSE:CVS) fell on Wednesday following a report from the Wall Street Journal. The article stated that a bipartisan group of lawmakers is preparing to introduce legislation aimed at breaking up pharmacy-benefit managers (PBMs).

Senate Bill Overview

The Senate bill, sponsored by U.S. Senators Elizabeth Warren and Josh Hawley, would require companies that own health insurers or pharmacy-benefit managers to divest their pharmacy operations within three years.

Role of Pharmacy-Benefit Managers

Pharmacy-benefit managers negotiate prescription drug prices between insurers, pharmacies, and drugmakers, and manage the reimbursement process for pharmacies based on agreed terms.

Stock Market Reaction

Following this news, UnitedHealth shares fell by 5%, CVS Health dropped 4.3%, and Cigna (NYSE:CI) slipped 4.4%. Other insurers, Elevance, Humana (NYSE:HUM), and Centene (NYSE:CNC), experienced declines ranging from 1% to 3%.

Additional Context

The pressure on insurer stocks intensified after Brian Thompson, CEO of UnitedHealth's health insurance unit, was fatally shot outside a Manhattan hotel last week. (This story has been refiled to correct a grammatical error in paragraph 1.)