Warren, Hawley introducing legislation to break up 'Big Medicine'

Sens. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.) are teaming up to “break up big medicine.”

The lawmakers introduced legislation to crack down on health care conglomerates that own multiple parts of the industry — including pharmacy benefit managers (PBMs), which act as a conduit between insurers and drug manufacturers, and pharmacies themselves.

Warren and Hawley’s “Break Up Big Medicine Act” proposes prohibiting parent companies from owning a medical provider or management services organization and a PBM or insurer. It also proposes prohibiting parent companies of prescription drug or medical device wholesalers from owning a medical provider or management services organization. 

CBS News was first to report on the legislation earlier Tuesday.

Three PBMs, CVS Caremark, Express Scripts and OptumRX, manage 79 percent of prescription drug claims for roughly 270 million people in the U.S., according to a 2024 report from the Federal Trade Commission (FTC). Those three companies are owned by insurance giants CVS Health, Cigna and UnitedHealth Group, respectively. 

A report from the American Medical Association last year said that this vertical integration reduces competition, crowds out smaller insurers and results in higher prices for consumers.

“There’s no question that massive health care companies have created layers of complexity to jack up the price of everything from prescription drugs to a visit to the doctor. The only way to make health care more affordable is to break up these health care conglomerates,” Warren said in a release. 

“Our bill would be a monumental step towards ending the stranglehold that corporate giants have on our broken health care system,” she added. 

“Americans are paying more and more for healthcare while the quality of care gets worse and worse,” said Hawley, a member of the Senate Health, Education, Labor and Pensions Committee. “In their quest to put profits over people, Big Pharma and the insurance companies continue to gobble up every independent healthcare provider and pharmacy they can find.

“Working Americans deserve better. This bipartisan legislation is a massive step towards making healthcare affordable for every American.”

The legislation also requires that companies in violation come into compliance within one year and empowers the FTC, Department of Health and Human Services, Department of Justice (DOJ), state attorney generals and private citizens to file suit against violators. 

Under the law, the FTC and the assistant attorney general for the DOJ’s Antitrust Division — currently Abigail Slater — may also file suit to block “any action that would harm competition to the detriment of the public interest with respect to the conflicts of interest” that are prohibited. 

The American Economic Liberties Project applauded the legislation in a release, drawing parallels to the 1932 Glass-Steagall Act, which effectively separated commercial banking from investment banking.

“For decades, policymakers in both parties have incentivized vertical consolidation in health care, resulting in Big Medicine behemoths that exploit conflicts of interest to drive costs up, quality down, and independent providers out of business,” said Emma Freer, senior policy analyst for health care at the anti-monopolist think tank. 

“This is why we launched the Break Up Big Medicine initiative last year, and we are proud to support the Break Up Big Medicine Act, which will eliminate these conflicts of interest while restoring power over our healthcare system to patients and the providers who care for them.”