(Reuters) – Shares of health insurers operating pharmacy benefit managers fell on Monday after U.S. President-elect Donald Trump called them middlemen who drive up costs and said he plans to eliminate their role.
CVS Health’s Caremark, Cigna’s Express Scripts and UnitedHealth Group’s Optum control the majority of the U.S. pharmacy benefit market, with their parent companies also operating health insurance and pharmacy businesses.
Pharmacy benefit managers negotiate drug costs with pharmacies and drug manufacturers and help build drug coverage lists for health plans, mostly on behalf of employers and the government. They directly reimburse pharmacies for prescription drugs included under their agreed terms.
“The horrible middleman that makes more money, frankly, than the drug companies, and they don’t do anything except they’re a middleman,” Trump said on Monday, at a news conference at his Mar-a-Lago club in Palm Beach, Florida.
“I don’t know who these middlemen are, but they are rich,” he said.
Referring to his dinner earlier this month with key executives of drugmakers Pfizer and Eli Lilly, as well as industry lobbying group PhRMA, Trump said he spent much of it talking about the high costs of drugs and how the U.S. pays much more than other countries.
“We’re going to knock out the middleman. We’re going to get drug costs down at levels that nobody has ever seen before,” Trump said.
Shares of CVS fell 5.35% to $46.73, Cigna slipped 2.6% to $274.63, while UnitedHealth was down 3.54% at $502.07 in afternoon trading.
“CVS leverages free-market competition to fight back against pharma price gouging, and we are proud of our continued work to make prescription drugs more affordable in the United States,” a spokesperson for CVS said, adding that the company welcomes outreach from federal and state officials to discuss its value.
“Any policy that limits the use of (pharmacy benefit manager) negotiating tools would leave American patients, taxpayers, and businesses at the mercy of the prices drugmakers set.”
ExpressScripts and Optum were not immediately available for comment.
Pharmacy benefit managers came under a House Oversight Committee investigation for their influence over prescription drug prices.
The Federal Trade Commission launched a suit in September, accusing Caremark, Optum and Express Scripts of artificially increasing their profit by unfairly limiting access to cheaper insulin drugs and steering patients toward more expensive options.
(Reporting by Sriparna Roy in Bengaluru and Amina Niasse in New York; editing by Caroline Humer and Pooja Desai)
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