Steps to rein in pharmacy benefit managers in US bill “manageable” for firms

(Reuters) – Healthcare provisions in a stopgap bill unveiled by top Republicans and Democrats are likely manageable for companies that own pharmacy benefit managers such as CVS Health and UnitedHealth, Wall Street analysts said on Wednesday.

The stopgap measure aimed at averting a partial government shutdown includes a healthcare package that prohibits these companies from deriving remuneration based on a drug’s Medicare list price.

Pharmacy benefit managers, or PBMs, act as intermediaries between drugmakers and consumers. They negotiate volume discounts, or rebates, and fees with drugmakers, create lists of medications covered by insurance, and reimburse pharmacies for prescriptions.

“It is important to note there is no call for the total elimination of rebates in the legislation and the provisions do not go into effect until 2028, which provides time for the industry to renegotiate and restructure contracts,” said Mizuho analyst Ann Hynes.

The companies have come under increased scrutiny from lawmakers over their role in high drug prices in the U.S. Their shares fell earlier this week after President-elect Donald Trump blamed PBMs for driving up costs and said he would eliminate their role.

CVS’ Caremark, Cigna’s Express Scripts and UnitedHealth Group’s Optum control the majority of pharmacy benefit management in the U.S., while their parent companies operate health insurance businesses.

“Overall, the PBM provisions are a win for big pharma, but may not accomplish the primary goal of lowering drug costs,” Oppenheimer analyst Michael Wiederhorn said.

These changes will require further evolution of the model, but we believe PBMs still have a place in the “healthcare flywheel”, he said.

(Reporting by Christy Santhosh in Bengaluru; Editing by Arun Koyyur)

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