Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., have introduced legislation that would ban health insurers and pharmacy benefit managers from owning medical providers, and would force companies in violation to divest within one year of the bill’s enactment.
The “Break Up Big Medicine Act” would also prohibit a parent company of a prescription drug or medical device wholesaler from owning a medical provider or management services organization.
The proposal follows back-to-back congressional hearings in January where lawmakers pressed executives from UnitedHealth Group, CVS Health, Elevance Health, Cigna Group and Blue Shield of California parent company Ascendiun on the consequences of vertical integration for consumers.
“I think corporate monopolies are a problem, and this vertical integration is destroying people’s ability to access care,” Rep. Alexandria Ocasio-Cortez, D-N.Y., said during the hearing. “100 years ago, we had this type of market concentration in our banks, and we did something about it when it crashed the economy and we passed the Glass-Steagall Act.”
UnitedHealth is the country’s largest insurer, owns claims clearinghouse Change Healthcare, employs or has contractual ties with about 10% of the U.S. physician workforce and controls more than 20% of the PBM market through Optum Rx. CVS Health owns both Aetna and the PBM Caremark. Cigna’s Evernorth unit houses PBM Express Scripts, and Elevance operates Carelon, which includes pharmacy, behavioral health and care delivery businesses.
Optum Rx, Caremark and Express Scripts combined process nearly 80% of prescription drug claims in the U.S. A 2025 FTC report found that the three PBMs marked up specialty generic drugs for cancer, HIV and other conditions by thousands of percent at their affiliated pharmacies, generating more than $7.3 billion in revenue above estimated drug acquisition costs from 2017 to 2022.
The proposed bill also noted that self-preferencing of affiliated pharmacies or physicians may allow conglomerates to evade ACA-capped limits on insurance profits by using pricing strategies that shift profits into unregulated pharmacy or physician business units.
In his January testimony, UnitedHealth CEO Stephen Hemsley defended the company’s structure as “a very substantial value dynamic in terms of bringing a better care experience and more value to the healthcare environment in total, by better coordination of care across those spectrums, by better use of data, by more engagement in critical areas in healthcare, including how drugs are made available and integrated into therapies.”
For companies that fail to meet divestiture milestones, the proposed legislation would establish automatic penalties, including the transfer of 10% of profits into escrow on a monthly basis. If divestiture does not occur by the deadline, a trustee would be appointed with the authority to sell the entities. The escrowed funds would be deposited into an FTC-created fund and distributed to serve the healthcare needs of “harmed” communities.
The bill would provide enforcement authority to the FTC, the Department of Justice Antitrust Division, the HHS Inspector General and state attorneys general. It also creates a private right of action, allowing individuals alleging damages from a violation to sue in state or federal court. The FTC and DOJ would also have the authority to review and block future M&A activity that would recreate the alleged conflicts of interest the bill is designed to prevent.
CVS Health’s president and CEO, David Joyner, appeared to address the criticisms lobbed at his company during the January hearings while speaking on the company’s year-end earnings call with investors Feb. 11. “We create competition and negotiate with providers and drug manufacturers, which directly lead to lower cost for consumers,” he said, saying that Aetna’s network negotiations resulted in over $235 billion of savings for members and clients and Caremark’s negotiations with drug manufacturers deliver an additional $45 billion of annual savings.
“All of us as consumers of healthcare are experiencing the same growing affordability pressures that have been escalating for decades,” Mr. Joyner said. “To address this, we need to collectively have a transparent and honest dialogue about what is and what isn’t driving up healthcare costs.”
