Bill Would Force Cigna to Divest PBM and Provider Units Within One Year
Mark Cuban endorsed the ‘Break Up Big Medicine Act’, a bill by Senators Hawley and Warren requiring insurers, PBMs and providers to divest within one year, targeting integrated giants like Cigna. It empowers the FTC and DOJ to enforce separations with profit-disgorgement penalties to dismantle vertical integration.
1. Bill Overview
The ‘Break Up Big Medicine Act’ introduced by Senators Hawley and Warren would prohibit common ownership of insurers, pharmacy benefit managers and provider networks. Modeled after the 1933 Glass-Steagall Act, the bill seeks to dismantle vertical integration in major healthcare companies over a one-year period.
2. Implications for Cigna
Under the proposed legislation, Cigna must divest its PBM and any directly owned provider subsidiaries within twelve months. These divestitures could materially alter Cigna’s revenue mix by separating its administrative services and network operations from its insurance business.
3. Enforcement and Timeline
Enforcement authority rests with the Federal Trade Commission and Department of Justice, with profit-disgorgement penalties for entities that fail to comply. Proponents argue this will reduce self-dealing, lower medical loss ratios and ultimately decrease healthcare premiums.