Trump Declares War on The Healthcare “Mafia” Bleeding Americans Dry... (Shares Plummet)

Pharmacy Benefit Managers (PBMs) had a no-good, very bad Monday after President-elect Teflon Don decided to put them on blast. Shares of CVS Health, UnitedHealth, and Cigna all plummeted after Trump announced his latest mission: knocking out the so-called “middlemen” of the drug industry. Because what’s a little pre-inauguration chaos without tanking a few stocks, amirite? 

(Source: Giphy) 

Now, before we get into the meat of it all, if you’re wondering what PBMs do, they’re basically the intermediaries between drugmakers and insurers, negotiating drug prices and managing formularies (aka the list of drugs your insurance covers). Think of them as the bouncers at the prescription drug nightclub—they decide who gets in and at what cost.

(Source: Bloomberg) 

But Trump? He’s not impressed. “We have a thing called the middleman,” he told reporters at Mar-a-Lago. “The horrible middleman that makes more money, frankly, than the drug companies, and they don’t do anything except they’re a middleman.” Translation: PBMs are living rent-free in Trump’s head, and he’s about to evict them.

As expected, Wall Street didn’t take the news lightly. Shares of CVS Health, which owns PBM giant Caremark, dropped 5.4%. UnitedHealth, the parent company of OptumRx, slid 3.5%, and Cigna, which owns Express Scripts, fell 2.6%.

(Source: Reuters) 

For context, these companies dominate the PBM market, so when Trump says he’s going to “knock out the middleman,” investors hear, “I’m coming for your margins.” And let’s not forget, this comes on the heels of a bipartisan bill introduced last week that would force companies to separate their PBM and insurance businesses. If passed, that could blow up one of the most profitable segments of these health conglomerates.

Naturally, PBM’s aren’t taking this lying down. CVS came out swinging, claiming that they “leverage free-market competition to fight back against pharma price gouging.” Translation: “We’re not the bad guys here, we’re the heroes fighting Big Pharma”. Nice try, but public sentiment isn’t exactly on their side—especially with the Federal Trade Commission and Congress sniffing around their business practices.

(Source: Giphy) 

What’s more is that the Pharmaceutical Care Management Association, the PBM trade group, also weighed in, warning that eliminating PBMs would “leave American patients, taxpayers, and businesses at the mercy of the prices drugmakers set.” Which, let’s be honest, is a little like the friggin’ fox warning you not to mess with the henhouse.

So yeah, a little Big Pharma drama going on from every corner these days. But remember, this isn’t the first time PBMs have been in the hot seat. They’ve been under FTC investigation since 2022, with accusations ranging from steering patients toward expensive drugs to limiting access to cheaper options. And given the industry has just been rekt from the tragic murder that recently took place, Trump’s comments are just the latest hit in what’s shaping up to be a regulatory disruption. 

(Source: Giphy) 

In the end, there’s quite a bit of chaos taking place with this story so for you lazy people (like me) here’s the TL;DR:

Trump called PBMs “horrible middlemen” and promised to “knock them out,” sending shares of CVS (-5.4%), UnitedHealth (-3.5%), and Cigna (-2.6%) lower. PBMs argue they’re the good guys keeping drug prices in check, but regulators and lawmakers don’t seem to agree—meaning with bipartisan legislation and FTC investigations in play, PBMs are facing a tough AF road ahead.

(Source: Giphy)

For now, if you’re an investor in this industry, keep your eyes peeled. Because Trump’s made it clear that while he’s been gone, PBM’s have “F**ked around” and now they’re going to find out. In the meantime, filter this all through a brain-cell and as always, stay safe and stay frosty, friends! Until next time… 

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Stocks.News does not hold positions in companies mentioned in the article.