shares of United Health Group (NYSE: UNH) Today again they were pulling back on reports that the Senate is working on a bill that would force health insurers like UnitedHealth to divest their pharmacy benefit managers (PBMs) within three years.
As a result, the stock was trading down 5% at 11:44 am. more Health insurance stocksincluding Cigna And CVS HealthAs well as the news were down.
Bill, whose report was The Wall Street Journalappears to have bipartisan support, as it was sponsored by Democrat Elizabeth Warren and Republican Josh Hawley. The bill aims to open up a major source of bureaucracy in healthcare, as pharmacy benefit managers are companies that act as middlemen in the drug industry, administering prescription drug programs on behalf of insurance companies. There have been previous regulatory attempts to curtail their power.
UnitedHealth, the nation’s largest health insurer, owns one of the largest PBMs, Optum Rx, which managed $159 billion in pharmaceutical spending and $63 billion in specialty pharmaceutical spending in 2023.
UnitedHealth, one of the nation’s most valuable companies at a market cap of nearly $500 billion, has grown organically and through acquisitions and is now a vast business that covers nearly every aspect of healthcare.
It’s unclear what will come of the new Senate bill, but bipartisan sponsorship seems like a promising sign.
UnitedHealth’s practices have come under scrutiny after the killing of a top company executive last week. In the wake of his death, social media was filled not with sympathy but with expressions of anger at UNH and the rest of the insurance industry. Congressman Dean Phillips, who represents UNH’s district in Minnesota, also said Congress must do more to make health care work for everyone.
Given the public outcry, we may see more regulations on UNH and its peers in the coming years, but that will depend on the next administration and whether the story remains in the public consciousness.
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