Trump’s Critique of Pharmacy Benefit Managers Shakes CVS, Cigna, and UnitedHealth Stocks

President Donald Trump has publicly criticized the role of pharmacy benefit managers (PBMs), calling them “middlemen” who profit excessively without adding value to the drug supply chain. His remarks have led to a significant drop in the stock prices of major PBM companies like CVS Health Corp., Cigna Group, and UnitedHealth Group Inc.

During a press conference at Mar-a-Lago, Trump emphasized his commitment to reforming the drug industry, targeting PBM practices. This follows his meeting with Pfizer CEO Albert Bourla, who echoed Trump’s sentiment about the need for change in how PBMs operate.

PBMs, which include CVS’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx, negotiate drug prices between manufacturers, pharmacies, and health plans. They are accused of inflating drug costs to benefit their corporate profits.

The Federal Trade Commission (FTC) has been actively investigating these practices, recently releasing a report that accuses these entities of marking up specialty generic drugs by thousands of percent, generating an excess of $7.3 billion in revenue from 2017 to 2022. This has led to increased scrutiny and legal action against PBMs, including a lawsuit over insulin pricing practices.

CVS, Cigna, and UnitedHealth have responded to these accusations, claiming their business models actually reduce drug costs. However, the political and regulatory pressure has not abated, with Congress considering legislation to increase transparency and curb certain PBM practices.

The market reaction was immediate, with shares of these companies falling as investors react to the potential implications of Trump’s and the FTC’s actions. This situation underscores a broader debate about the role of PBMs in healthcare, balancing cost control with ethical practices.

For more detailed insights into each company’s response or the specific findings by the FTC, further reading from financial news sources is recommended.