CVS, Cigna fall after Trump administration proposes rule to lower drug prices

By | January 31, 2019

The Trump administration announced Thursday it plans to target “backdoor rebates” as it seeks to lower drug costs for consumers.

CVS Health and Cigna fell 3 percent, while Cardinal Health slipped 2 percent. Walgreens Boots Alliance and UnitedHealth also dipped about 1 percent.

A pharmacy benefit manager (PBM) lobbying group said while it is “encouraged” by proposals that increase competition, it is concerned that eliminating rebates for PBMs may increase costs. J.C. Scott, president and CEO of the Pharmaceutical Care Management Association, said in a statement that this may “force Medicare beneficiaries to pay higher premiums and out-of-pocket expenses, unless there is a viable alternative for PBMs to negotiate on behalf of beneficiaries.”

Industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) said it supports the proposal, saying it would “fix the misaligned incentives in the system that currently result in insurers and pharmacy benefit managers (PBMs) favoring medicines with high list prices.”

— CNBC’s Bertha Coombs and Angelica Lavito contributed to this report.

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