UnitedHealth Group, CVS Health, and Cigna are actively opposing legislative measures in Arkansas and Tennessee designed to dismantle their integrated business models. These new laws prohibit the companies from simultaneously managing prescription benefits and operating retail or mail-order pharmacies. Lawmakers in other states and at the federal level have introduced similar restrictions, citing concerns over the conglomerates' market dominance.
The three corporations have responded with a coordinated defense strategy that includes filing lawsuits, hiring lobbyists, and launching advertising campaigns. Within weeks of Tennessee Governor Bill Lee signing the state law in May, CVS filed a federal lawsuit to block it. UnitedHealth, Cigna’s Express Scripts division, and a related trade association subsequently joined with additional legal challenges.
Company executives argue that the legislation would reduce patient access to pharmacies and increase drug costs. Susan Peppers, an executive at Express Scripts, stated that the firms are working to prevent the laws from taking effect to protect patients. The companies contend that the legislation is misguided and would ultimately harm consumers by raising prices.
Supporters of the laws, including lawmakers who are pharmacists, doctors, and nurses, argue that breaking up the conglomerates would lower costs by eliminating practices that inflate prices. They claim the companies have harmed patient care and driven small drugstores out of business. The efforts reflect growing public concern that the three firms have become too large and possess conflicting interests.
Critics point to the vast scope of these businesses as evidence of excessive power. UnitedHealth, for instance, operates an insurer, a pharmacy benefit manager, a network of clinicians, surgery centers, a claims processor, a mail-order pharmacy, and a bank. The three conglomerates now rank among the largest U.S. public companies by sales, a status they did not hold in 2011.
Opponents allege that the companies exploit conflicts of interest to profit from their diverse operations. They note that pharmacy benefit managers often direct patients to affiliated pharmacies while paying them more than independent stores. These concerns prompted Florida Attorney General James Uthmeier to investigate CVS Health last month.
