WARREN, HAWLEY INTRODUCE BIPARTISAN BILL TO BREAK UP BIG MEDICINE

The following information was released by Massachusetts Senator Elizabeth Warren:

Today, Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.) introduced the Break Up Big Medicine Act to address rampant consolidation in the health care industry that drives up prices, squashes competition, and fuels corporate greed.

"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 Elizabeth Warren. "Our bill would be a monumental step towards ending the stranglehold that corporate giants have on our broken health care system."

"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 Josh Hawley. "Working Americans deserve better. This bipartisan legislation is a massive step towards making healthcare affordable for every American."

Giant health care conglomerates dominate the American health care 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 entities are vertically integrated, meaning one company can own or control every part of the health care supply chainfrom health insurance companies and PBMs to pharmacists and physicians. By controlling both the company that pays for health care services (e.g., a health insurer) and also the entity that sets the prices for those health care services (e.g., a health care provider), these conglomerates may be steering business to their own affiliates, evading laws intended to rein in corporate profiteering, or using providers they employ to boost government payments and pad their bottom lines.

This not only harms patients and taxpayers but has also left independent doctors and pharmacists unable to competenearly 4,000 independent pharmacies have closed since 2019, 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.

There is clear precedent for government prohibitions on joint ownership to protect consumers and promote competition, including in the railroad and banking industries. This bill extends the structural separation provisions of Senator Warren and Senator Hawley's Patients Before Monopolies Act to additional lines of business.

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