Health care stocks fall as lawmakers seek legislation to crack down on drug middlemen. Reuters

(Reuters) – Shares of companies that own pharmacy benefit managers fell on Wednesday after the introduction of bipartisan legislation that would force health insurers or drug intermediaries to divest their pharmacy operations.

CVS Health’s ( NISE: ) Caremark, Cigna’s ( NISE: ) Express Scripts and UnitedHealth Group’s ( NISE: ) Optum control most of the pharmacy benefit management (PBM) in the U.S., while their parent companies also manage health insurance businesses.

Shares of all three companies fell between 4.8% and 5.5% after the Wall Street Journal first reported news of the legislation.

The bill, sponsored by US Senators Elizabeth Warren, Democrat, and Josh Hawley, Republican, would force companies that own health insurance or pharmacy benefit managers to divest their pharmacy business within three years.

Reps. Dianna Harshbarger, a Republican, and Jake Auchincloss, a Democrat, also support the bill, which will be introduced in Congress.

PBMs negotiate prescription drug prices between insurers, pharmacies and drug manufacturers and directly reimburse pharmacies for prescription drugs included under their negotiated terms.

They have previously come under scrutiny for their influence on prescription drug prices.

“PBMs manipulated the market to enrich themselves — driving up drug costs, cheating employers and driving small pharmacies out of business.” “My new bipartisan legislation will resolve these conflicts of interest by reining in these middlemen,” said Senator Warren.

Shares of other insurers such as Elevance, Humana (NISE:) and Hundreds (NOT:) fell between 1% and 3%.

“The latest introduction of potential legislation to limit PBM operations and broader vertical integration in healthcare is unlikely to gain traction, although it is hard to rule it out entirely,” said Leerink Partners analyst Michael Cherney.

The insurer’s shares came under pressure after Brian Thompson, chief executive of UnitedHealth’s health insurance unit, was shot dead outside a Manhattan hotel last week.