Trump's drug pricing order delivers blow to pharmacy benefit managers

By Amina Niasse

NEW YORK (Reuters) -President Donald Trump connected Monday delivered a stroke to the private-sector middlemen who negociate U.S. cause prices successful his enforcement bid connected cause pricing, saying helium would chopped them retired arsenic portion of a extremity to bring the U.S. successful enactment with different countries.

The quality drove their shares down adjacent arsenic pharmaceutical stocks roseate successful capitalist alleviation astir the wide order.

"We're going to chopped retired the middlemen and facilitate the nonstop merchantability of drugs astatine the astir favored federation price, straight to the American citizen," Trump said during a property conference.

The U.S. pays astir 3 times much than different nations for drugs, and Trump's wide-reaching enforcement bid directs pharmaceutical companies to complaint akin prices successful the U.S. and Europe.

The bid says its wellness section volition found a mechanics for patients to bargain much drugs straight from manufacturers.

Shares of CVS Health, UnitedHealth Group and Cigna fell 5%, 0.5% and 6%, respectively. The companies individually run pharmacy payment managers Caremark, Optum Rx and Express Scripts.

Pharmacy payment managers person already been nether regulatory unit from the Federal Trade Commission, which had sued them nether the Biden medication implicit their insulin pricing practices.

The pharmaceutical manufacture has blamed them for precocious prices, saying the aftermarket discounts and fees adhd hidden costs to cause prices.

Jeff Jonas, portfolio manager astatine Gabelli Funds, said the enforcement bid would support that antagonistic unit connected companies similar Cigna, CVS, and UnitedHealth.

"The strategy of precocious database prices and big, hidden rebates makes the strategy precise opaque and hard to navigate," helium said.

A spokesperson for CVS said the institution welcomed the president’s absorption connected pricing by pharmaceutical companies and aimed to person discussions with the medication connected making pricing much affordable.

He said that its negotiations with drugmakers successful wellness plans it operates for Medicare medicine cause security had resulted successful "significantly lower" costs than that which the authorities had been capable to extract successful the 7 of 10 drugs it has straight negotiated nether the Inflation Reduction Act.

Cigna and UnitedHealth did not instantly respond to a Reuters petition for comment.

Industry spokesperson Greg Lopes, vice president of nationalist affairs astatine the Pharmaceutical Care Management Association, said the occupation was with the drugmakers and that PBMs were the lone cheque against cause companies’ unlimited pricing power.

American reliance connected employer-sponsored wellness plans poses a situation to the implementation and whitethorn necessitate legislature oversight to enforce, 1 expert said.