HR-8779-119
Referred to the House Committee on the Judiciary.
Sponsored by Diana Harshbarger (R-TN)
What it does
This bill would make it unlawful for any company to simultaneously own or control both a pharmacy benefit manager (PBM) — the middlemen who manage prescription drug benefits for health plans — and a pharmacy (including retail, mail-order, specialty, and hospital pharmacies). It would also prohibit common ownership of an insurance company and a pharmacy. Companies currently in violation would be required to divest their pharmacy holdings within one year of enactment. The bill would authorize the FTC, DOJ, state attorneys general, and private individuals to bring civil enforcement actions, with penalties including treble damages, profit escrow, and court-appointed divestiture trustees for non-compliant companies.
Who benefits
Independent and community pharmacies that compete with PBM-affiliated chains and may gain more favorable contract terms. Patients who may see lower prescription drug costs if self-preferencing is reduced. Health plan enrollees and taxpayers who fund public programs like Medicare and Medicaid, if PBMs can no longer use transfer pricing to obscure profits and evade Medical Loss Ratio limits. Rural and underserved communities that rely on independent pharmacies. Generic and specialty drug competitors who may gain fairer access to pharmacy networks. State attorneys general who gain new enforcement tools.
Who is hurt
Large vertically integrated health conglomerates — primarily CVS Health (which owns Caremark PBM and CVS pharmacies), Cigna (Express Scripts and Evernorth), and UnitedHealth Group (OptumRx and Optum pharmacies) — which would be required to divest significant business segments. Employees of divested pharmacy units who may face uncertainty during ownership transitions. Patients who use mail-order or specialty pharmacies affiliated with their insurer and may experience disruption during divestiture. Shareholders of affected conglomerates. Potentially, patients in integrated care models where PBM-pharmacy coordination reduces administrative friction.
Supporters argue
Supporters argue that the three largest PBMs — CVS Caremark, Express Scripts, and OptumRx — collectively processed over 90% of U.S. prescriptions in 2023 while simultaneously owning the pharmacies that fill them, creating an inherent conflict of interest. They contend that the FTC's own findings document that vertically integrated PBMs steer patients to affiliated pharmacies at higher costs, and that this dynamic contributed to the closure of more than 7,000 independent pharmacies between 2019 and 2024. Supporters further argue that structural separation is the only remedy that eliminates — rather than merely regulates — the incentive to self-preference, and that similar structural remedies have been used in banking and telecommunications to restore competition.
Opponents argue
Opponents argue that forced divestiture of large, operationally integrated companies within a one-year window is an unprecedented and blunt instrument that could disrupt prescription drug supply chains for millions of patients before any competitive benefit is realized. They contend that vertical integration can produce efficiencies — such as coordinated specialty drug management and reduced administrative costs — that lower overall plan costs, and that the FTC already has existing antitrust authority to address specific anticompetitive conduct without mandating structural breakups. Opponents also argue that the bill's broad definitions could sweep in hospital pharmacies and other non-commercial entities never intended as targets, and that forcing rapid divestitures may result in pharmacy assets being acquired by private equity rather than independent operators, potentially worsening the competitive landscape.
Constitutional context
Congress grounds this bill in the Commerce Clause (Art. I, §8, cl. 3) and the Necessary and Proper Clause (Art. I, §8, cl. 18), as PBMs operate as large national entities engaged in interstate commerce. NFIB v. Sebelius (2012) affirmed broad congressional authority to regulate existing commercial activity. However, post-Loper Bright (2024), the FTC's rulemaking authority under Section 3(e) to implement this structural mandate will face independent judicial scrutiny, and courts will no longer defer to the agency's interpretation of its own statutory authority.
Checks and balances
The legislative branch sets the structural prohibition; the FTC and DOJ Antitrust Division gain significant new enforcement authority, including the power to appoint divestiture trustees and escrow profits — subject to judicial review through civil actions in federal district courts and the existing Clayton Act framework.
Historical precedent
The Glass-Steagall Act (1933) mandated structural separation of commercial and investment banking to eliminate conflicts of interest, and was enforced through divestiture; its partial repeal in 1999 via the Gramm-Leach-Bliley Act is frequently cited in debates over structural separation remedies in other industries.