(Bloomberg) -- Shares of pharmacy benefit managers fell Monday after President-elect Donald Trump said he plans to “knock out” drug-industry middlemen, a sign the sector isn’t likely to see relief from political scrutiny during his administration.
CVS Health Corp. shares fell as much as 4.3%, UnitedHealth Group Inc. dropped as much as 3.9%, and Cigna Group shares dropped as much as 2.6% after the comments. The companies own the largest prescription drug middlemen, businesses that have been blamed by both Republicans and Democrats for driving up the cost of medicine.
“We have a thing called the middleman,” Trump told reporters on Monday. “You know the middleman, right? The horrible middleman that makes more money frankly than the drug companies, and they don’t do anything except they’re a middleman,” he said. “We’re going to knock out the middleman.”
Trump made the comment after describing a dinner he had with leaders from Pfizer Inc., Eli Lilly & Co. and his nominee to lead the Health and Human Services Department, Robert F. Kennedy Jr.
Congress is considering restrictions on PBMs in a year-end spending package that could change the way they get paid, Bloomberg Government reported Dec. 13. The Pharmaceutical Care Management Association, which represents the companies, said in a statement Monday that such a move would raise costs.
Separately, a bipartisan group of lawmakers introduced a bill last week that would force companies that own insurers and PBMs to divest their pharmacy businesses. If it were to become law, it could disrupt a profitable and growing segment for health conglomerates.
PBMs’ profit margins are typically smaller than those of drug manufacturers, according to a 2017 analysis by researchers at the University of Southern California.
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