In the wake of President-elect Donald Trump’s bold statements on the pharmaceutical industry, healthcare and pharma stocks have taken a significant hit. Trump’s promise to tackle drug-industry middlemen, particularly Pharmacy Benefit Managers (PBMs), has sent ripples through the sector, with major companies like UnitedHealth Group Inc. (UNH), CVS Health Corp. (CVS), and Cigna Group (CI) seeing their stock prices drop sharply.
UnitedHealth’s shares fell as much as 4.5%, CVS dropped by 3.9%, and Cigna slid 4.1%, as investors reacted to the uncertainty surrounding potential changes in the healthcare landscape. PBMs, which act as intermediaries between insurers, drug manufacturers, and pharmacies, have long been a controversial part of the industry. These entities are often blamed for inflating drug prices and taking a large cut of the profits, leaving both patients and insurers bearing the brunt of rising healthcare costs.
Albert Bourla, CEO of Pfizer Inc. (PFE), weighed in on the growing political pressure, saying that Trump “has very strong views” on PBMs and “wants transparency” in the drug pricing process. Bourla’s comments came during a call with analysts following the release of Pfizer’s 2025 guidance. The CEO’s remarks underscore the mounting pressure on PBMs to disclose how much money they are pocketing in the current system. Trump, in a recent statement to reporters, sharply criticized the role of middlemen in the pharmaceutical supply chain. “The horrible middleman that makes more money frankly than the drug companies, and they don’t do anything except they’re a middleman,” he said. “We’re going to knock out the middleman.”
The controversy surrounding PBMs is not a new issue; both Republicans and Democrats have long criticized these intermediaries for contributing to the rising costs of prescription drugs. PBMs negotiate drug prices and rebates on behalf of insurers, but critics argue that they often operate in a way that drives up costs without providing meaningful benefits to consumers. Trump’s emphasis on reforming this aspect of the healthcare system has added fuel to the debate, with investors reacting negatively to the prospect of major regulatory changes.
In addition to Trump’s statements, a bipartisan group of lawmakers recently introduced a bill aimed at forcing companies that own both insurers and PBMs to divest their pharmacy businesses. If passed, this legislation could disrupt a highly profitable and rapidly growing segment of the healthcare industry, forcing health conglomerates to reconsider their business strategies. The bill has the potential to shake up the current dynamics between insurers, PBMs, and pharmaceutical companies, which could further impact stock valuations in the sector.
As the debate continues to unfold, the healthcare and pharma industries are bracing for potential changes that could reshape the way prescription drugs are priced and distributed in the U.S. With President-elect Trump’s commitment to transparency and his promise to dismantle the role of middlemen, it’s clear that the pharmaceutical landscape is on the cusp of a major transformation—one that could have significant financial implications for the companies involved.
