The healthcare industry in the United States is in dire need of reform, and the culprit is none other than the powerful 'Big Medicine' conglomerates. These entities, including pharmacy benefit managers (PBMs), insurance companies, and drug distributors, have been driving up healthcare costs and stifling competition, leaving Americans with middling healthcare and the highest medical expenses globally. The situation is dire, and it's time to break up these monopolies.
One of the key players in this crisis is the PBMs. These middlemen between insurers, drug manufacturers, and pharmacies have been found to be more interested in lining their pockets than in reducing drug costs. The 'big three' PBMs, CVS Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum Rx, control a staggering 80% of US prescriptions and are vertically integrated with major insurance and pharmacy companies. This integration allows them to leverage their market power, driving up drug costs and pushing independent pharmacies out of business. For instance, a 2025 report by the Federal Trade Commission revealed that these PBMs paid their affiliated pharmacies up to 7,736% more than unaffiliated competitors.
The issue extends beyond PBMs to drug wholesalers like McKesson, Cencora, and Cardinal Health, who control 96% of US drug distribution. These companies are also vertically integrated with medical providers, creating conflicts of interest. In March 2026, Cencora agreed to pay $1 million to resolve allegations of paying kickbacks to healthcare providers, demonstrating how these wholesalers can dictate which drugs patients receive based on profit margins rather than clinical judgment.
The pharmaceutical industry, or Big Pharma, has been accused of abusing patents to keep drug costs high and block competition from more affordable generics. However, this doesn't absolve the other players in Big Medicine. The situation is further complicated by the fact that even incremental PBM reform efforts have stalled due to fierce opposition from industry groups, including Elon Musk's unexpected support for a government funding bill that included PBM reforms.
The proposed Break Up Big Medicine Act, introduced by Senators Elizabeth Warren and Josh Hawley, aims to address this crisis. The bill would prohibit insurers, PBMs, and wholesalers from owning or controlling healthcare providers, effectively breaking up the six major Big Medicine companies. Research suggests that such a ban could reduce drug prices by more than 7%, and public support for this legislation is growing. Business leaders like Mark Cuban endorse breaking up these companies, and my organization, the American Economic Liberties Project, is part of a coalition supporting the bill.
The parallels between the Glass-Steagall Act, which separated commercial and investment banks during the Great Depression, and the Break Up Big Medicine Act are striking. Just as the Glass-Steagall Act aimed to prevent systemic risks, breaking up Big Medicine could begin the path to recovery for the US healthcare system. While it may not heal all the system's problems, it's a necessary step towards a more competitive and affordable healthcare landscape.
