Insurer shares fall after Trump says ‘we will knock out the intermediary’

(Reuters) – Shares of well being insurers working pharmacy profit managers fell on Monday after U.S. President-elect Donald Trump known as them middlemen who drive up prices and stated he plans to eradicate their function.

CVS Well being (NYSE:CVS)’s Caremark, Cigna (NYSE:CI)’s Specific Scripts and UnitedHealth Group (NYSE:UNH)’s Optum management the vast majority of the U.S. pharmacy profit market, with their mum or dad corporations additionally working medical health insurance and pharmacy companies.

Pharmacy profit managers negotiate drug prices with pharmacies and drug producers and assist construct drug protection lists for well being plans, totally on behalf of employers and the federal government. They immediately reimburse pharmacies for pharmaceuticals included underneath their agreed phrases.

“The horrible intermediary that makes more cash, frankly, than the drug corporations, they usually do not do something besides they seem to be a intermediary,” Trump stated on Monday, at a information convention at his Mar-a-Lago membership in Palm Seashore, Florida.

“I do not know who these middlemen are, however they’re wealthy,” he stated.

Referring to his dinner earlier this month with key executives of drugmakers Pfizer (NYSE:PFE) and Eli Lilly (NYSE:LLY), in addition to business lobbying group PhRMA, Trump stated he spent a lot of it speaking in regards to the excessive prices of medicine and the way the U.S. pays rather more than different nations.

“We’ll knock out the intermediary. We’ll get drug prices down at ranges that no one has ever seen earlier than,” Trump stated.

Shares of CVS fell 5.35% to $46.73, Cigna slipped 2.6% to $274.63, whereas UnitedHealth was down 3.54% at $502.07 in afternoon buying and selling.

“CVS leverages free-market competitors to combat again in opposition to pharma worth gouging, and we’re happy with our continued work to make pharmaceuticals extra inexpensive in the US,” a spokesperson for CVS stated, including that the corporate welcomes outreach from federal and state officers to debate its worth.

“Any coverage that limits using (pharmacy profit supervisor) negotiating instruments would go away American sufferers, taxpayers, and companies on the mercy of the costs drugmakers set.”

ExpressScripts and Optum weren’t instantly accessible for remark.

Pharmacy profit managers got here underneath a Home Oversight Committee investigation for his or her affect over prescription drug costs.

The Federal Commerce Fee launched a swimsuit in September, accusing Caremark, Optum and Specific Scripts of artificially growing their revenue by unfairly limiting entry to cheaper insulin medicine and steering sufferers towards costlier choices.