Trump's order aims to align U.S. drug Should you loved this article and you would want to receive details about long distance limo hire assure visit our web page. prices with international standards
CVS, Cigna, UnitedHealth shares drop amid executive order announcement
PBMs may adjust service fees to offset pricing changes, one analyst says
By Amina Niasse
NEW YORK, May 12 (Reuters) - President Donald Trump on Monday delivered a blow to the private-sector middlemen who negotiate U.S.
drug prices in his executive order on drug pricing, saying he would cut them out as part of a goal to bring the U.S. in line with other countries. The news drove their shares down even as pharmaceutical stocks rose in investor relief about the broad order. "We're going to cut out the middlemen and facilitate the direct sale of drugs at the most favored nation price, directly to the American citizen," Trump said during a press conference. The U.S. pays about three times more than other nations for drugs, and Trump's wide-reaching executive order directs pharmaceutical companies to charge similar prices in the U.S. and Europe. The order says its health department will establish a mechanism for patients to buy more drugs directly from manufacturers. Shares of CVS Health, UnitedHealth Group and Cigna fell 5%, 0.5% and 6%, respectively. The companies individually operate pharmacy benefit managers Caremark, Optum Rx and Express scripts. Pharmacy benefit managers have already been under regulatory pressure from the Federal Trade Commission, which had sued them under the Biden administration over their insulin pricing practices. The pharmaceutical industry has blamed them for high prices, saying the aftermarket discounts and long distance limo hire fees add hidden costs to drug prices. Jeff Jonas, portfolio manager at Gabelli Funds, said the executive order would keep that negative pressure on companies like Cigna, CVS, and UnitedHealth. "The system of high list prices and big, hidden rebates makes the system very opaque and hard to navigate," he said. A spokesperson for CVS said the company welcomed the president´s focus on pricing by pharmaceutical companies and aimed to have discussions with the administration on making pricing more affordable. He said that its negotiations with drugmakers in health plans it operates for Medicare prescription drug insurance had resulted in "significantly lower" costs than that which the government had been able to extract in the 7 of ten drugs it has directly negotiated under the Inflation Reduction Act.
Cigna and UnitedHealth did not immediately respond to a Reuters request for comment. Industry spokesman Greg Lopes, vice president of public affairs at the Pharmaceutical Care Management Association, said the problem was with the drugmakers and long distance limo hire that PBMs were the only check against drug companies´ unlimited pricing power. American reliance on employer-sponsored health plans poses a challenge to the implementation and may require congressional oversight to enforce, long distance limo hire one analyst said.
Because pharmacy benefit managers provide bundled services to clients, companies could raise the costs of other services or administrative fees, effectively maintaining the same plan pricing, said Julie Utterback, an analyst at Morningstar.
She said UnitedHealth shares had not fallen as much because the company is more diversified than Cigna and CVS, which also has a retail pharmacy that could be negatively impacted by lower drug prices. (Reporting by Amina Niasse in New York; Additional reporting by Sriparna Roy in Bengaluru; editing by Caroline Humer and Rosalba O'Brien)