WASHINGTON — Senators Josh Hawley (R-Mo.) and Elizabeth Warren (D-Mass.) introduced the Break Up Big Medicine Act to address rampant consolidation in the healthcare industry that drives up prices, squashes competition, and hurts working people.
“Americans are paying more and more for healthcare while the quality of care gets worse and worse. 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,” said Senator Hawley. “Working Americans deserve better. This bipartisan legislation is a massive step towards making healthcare affordable for every American.”
“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,” said Senator Warren. “Our bill would be a monumental step towards ending the stranglehold that corporate giants have on our broken health care system.”
Giant healthcare conglomerates dominate the American healthcare system. The three largest pharmacy benefit managers (PBMs) manage 80% of prescription drug claims, while just three prescription drug wholesalers control 98% of U.S. drug distribution. These corporate behemoths are vertically integrated, meaning one company can own or control every part of the healthcare supply chain—from health insurance companies and PBMs to pharmacists and physicians.
By controlling both the company that pays for healthcare services (e.g., a health insurer) and also the people that set the prices for those healthcare services (e.g., physicians), these conglomerates are steering business to their own affiliates. This not only harms patients and taxpayers but has also left independent doctors and pharmacies unable to compete. Since 2019, nearly 4,000 independent pharmacies have closed, and almost 80 percent of physicians now work for a corporate parent.
The Break Up Big Medicine Act addresses these structural conflicts of interest, which allow corporate giants to put profits over the interests of patients, taxpayers, employers, and independent providers. The legislation will:
- Prohibit a parent company from owning a medical provider or management services organization and a PBM or an insurer;
- Prohibit a parent company of a prescription drug or medical device wholesaler from owning a medical provider or management services organization;
- Require that a company violating these conflicts of interest come into compliance within one year of the bill’s enactment;
- Create automatic penalties if a company fails to comply in a timely manner, including disgorgement of profits and forced sales of assets;
- Enable the Federal Trade Commission (FTC), Department of Health and Human Services, Department of Justice (DOJ), state attorneys general, and private parties to bring lawsuits against violators; and
- Allow the FTC and DOJ to review and block future actions that would recreate the conflicts of interest prevented by the bill.
This bill extends the structural separation provisions of Senator Hawley’s and Senator Warren’s Patients Before Monopolies Act to additional segments of the healthcare supply chain.
Read the bill text here.