'Cuban, Talarico Back Plan to Break Up Big Medicine'

 CVS Health (NYSE:CVS) and other vertically integrated healthcare giants could face a fresh political challenge after billionaire entrepreneur Mark Cuban backed a new healthcare plan from Texas Senate candidate James Talarico aimed at lowering prescription-drug costs and break[ing] up the Big Medicine monopolies. The proposal is far from becoming law, but it matters for investors because it directly targets the combination of insurers, pharmacy benefit managers and healthcare providers that has become central to CVS's strategy.

CVS is particularly exposed to that debate. Its integrated model combines Aetna health insurance, CVS Caremark pharmacy-benefit management, retail pharmacies and healthcare services. Caremark alone manages benefits for roughly 87 million plan members, while CVS serves more than 37 million people through insurance products.

Talarico told CNBC that his plan would pursue antitrust legislation targeting vertically integrated healthcare conglomerates, including PBMs, insurers and hospital networks.

Healthcare corporations are ripping us offjacking up premiums and profiting off our pain, Talarico said.

Cuban, who co-founded the Mark Cuban Cost Plus Drug Company as an alternative prescription-drug model, is backing the proposal.

Whether you're a Republican, Democrat, or an independent, you want more affordable, better quality healthcare, Cuban said.

The two are expected to promote the plan at an Aug. 29 event in Fort Worth.

CVS would not be alone in facing greater scrutiny. UnitedHealth (NYSE:UNH), Cigna (CI), Elevance Health (NYSE:ELV) and large hospital operators could also be affected if lawmakers moved toward separating healthcare businesses or restricting how vertically integrated companies operate.

Investor takeaway

For CVS shareholders, the key point is that this is currently a political proposal, not an enacted regulatory change.

Still, investors should watch whether Talarico's proposals gain broader congressional support and whether federal antitrust scrutiny of PBMs and vertically integrated healthcare companies intensifies.

CVS has built much of its strategy around connecting insurance, pharmacy benefits, pharmacies and care delivery. Regulations that limit those relationships could weaken expected efficiencies or force structural changes.

The risk becomes materially more important if Cuban's involvement helps push healthcare consolidation and PBM reform higher on the national political agenda.

https://ca.finance.yahoo.com/news/mark-cuban-backs-plan-break-193611240.html