U.S. Health Stocks Dip Amidst Commitment to PBM Reform

Investing.com -- Stocks of U.S. healthcare companies with pharmacy benefit management (PBM) units continued to decline on Tuesday following a drop on Monday. This decline followed statements from Pfizer CEO Albert Bourla indicating that President-elect Donald Trump is determined to reform the pharmacy benefit management (PBM) system.

Shares of UnitedHealth fell by as much as 2.9%, while Cigna's stocks dropped by as much as 4.1%. CVS Health was also affected, with its shares losing up to 2.5% in value. Bourla's comments came after a recent dinner meeting with Trump.

Pharmacy benefit managers negotiate drug prices with pharmacies and drug manufacturers. They also assist in creating drug formularies for health plans primarily for employers and government entities. Additionally, they directly reimburse pharmacies for prescription medications within the agreement terms.

Trump has previously described these organizations as "terrible intermediaries" that profit more than drug companies but provide little value. He has expressed his intention to eliminate their role in reducing drug costs.

Major players in the U.S. pharmacy benefit market include CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum. The parent companies of these organizations also operate health insurance and pharmacy businesses.

In response to Trump's comments, a spokesperson for CVS told Reuters that the company uses free market competition to combat excessive drug price increases. The spokesperson emphasized that the company takes pride in its ongoing efforts to make prescription drugs more affordable in the U.S. and is open to discussions with federal and state officials about their values.

No immediate comment was available from Express Scripts and Optum on the matter.

The impact of pharmacy benefit managers on prescription drug prices has recently been under scrutiny by the House Oversight Committee.