Warren and Hawley Want to Break Up Big Medicine. Here's What the Bill Actually Does.

On February 10, 2026, Sen. Elizabeth Warren (D-Mass.) and Sen. Josh Hawley (R-Mo.) introduced the Break Up Big Medicine Act, a bipartisan bill that would force the structural separation of healthcare conglomerates that simultaneously own insurance companies, pharmacy benefit managers (PBMs), pharmacies, physician practices, and drug wholesalers. The political pairing is unusual: a progressive Democrat and a populist Republican, finding common ground on the idea that a handful of corporate giants have rigged the healthcare supply chain in their own favor. The bill arrives as both parties scramble to address healthcare affordability ahead of the 2026 midterm elections, and just days after President Trump signed an appropriations package containing new PBM transparency rules and issued executive orders directing agencies to "reevaluate the role of middlemen" in prescription drug pricing. The political will to confront healthcare consolidation is clearly building. The question is whether this bill meets the moment.

What the Bill Does

The Break Up Big Medicine Act draws its inspiration from the Glass-Steagall Act of 1933, which separated commercial and investment banking after the financial system's collapse during the Great Depression. Applied to healthcare, the principle is the same: entities that are supposed to be bargaining competitively with one another should not be owned by the same parent company.

The bill establishes two core prohibitions. First, it bars any person or entity from simultaneously owning or controlling a medical provider or management services organization (MSO) and an insurance company or PBM. Second, it bars common ownership of a provider or MSO and a prescription drug or medical device wholesaler. Companies in violation would have one year to divest. Those who miss divestiture milestones would face automatic penalties, including 10% of profits transferred into escrow on a monthly basis and, eventually, a court-appointed divestiture trustee with authority to force asset sales. Revenue from seized profits would be deposited into a fund created by the Federal Trade Commission (FTC) and distributed to serve the healthcare needs of harmed communities.

An MSO is an entity that contracts with a medical provider to furnish administrative and business services such as payroll, payer contracting, billing and collection, coding, IT, and patient scheduling. While MSOs do not technically practice medicine, they have become the primary vehicle through which corporate entities, including insurers and private equity firms, exert operational control over physician practices without appearing on paper as the owner. The bill's explicit inclusion of MSOs is a recognition that corporate control of healthcare delivery does not require direct ownership; it can be achieved through the back office.

The enforcement architecture is broad. The FTC, the Department of Justice (DOJ) Antitrust Division, the Department of Health and Human Services (HHS) Inspector General, state attorneys general, and private citizens can all bring civil actions. The private right of action provision allows treble damages (a legal remedy where a court triples the amount of actual, compensatory damages awarded to a prevailing plaintiff), attorney's fees, and equitable relief. The FTC and DOJ would also retain forward-looking authority to review and block future transactions that would re-create the prohibited conflicts of interest.

The bill's definition of "provider" is notably expansive: it includes pharmacies (both in-patient and outpatient), physician practices, ambulatory surgery centers, urgent care centers, post-acute care facilities, home-health providers, and hospitals. This means the legislation reaches well beyond PBM-owned pharmacies to encompass the full range of insurer-owned care delivery.

The Problem It Targets

The scale of vertical integration in U.S. healthcare is difficult to overstate. Three PBMs, CVS Caremark, Express Scripts, and OptumRx, manage nearly 80% of prescription drug claims for roughly 270 million people. Each is owned by a company that also operates a health insurance plan, physician offices, and pharmacies. Three drug wholesalers control 98% of U.S. drug distribution. As of 2023, UnitedHealth Group, through its Optum subsidiary, controls approximately 10% of all American physicians, making it the single largest employer of doctors in the country. Nearly 80% of physicians now work for a corporate parent, and since 2019, nearly 4,000 independent pharmacies have closed.

The evidence on what this consolidation does to costs and quality is damning. RAND Corporation testimony to the U.S. House of Representatives found that vertical integration of hospitals or health systems with physician practices does not lower spending and does not improve quality of care. Instead, it shifts care to higher-cost settings and increases payment rates through greater negotiating power. Hospital-physician vertical integration has been associated with 10 to 14% price increases for physician services. A Commonwealth Fund analysis found vertical consolidation associated with 14% higher physician prices and 10-20% higher total spending per patient.

The FTC itself has found that vertically integrated PBMs have both the ability and incentive to steer business to their own affiliated pharmacies, reducing competition and increasing prescription drug costs. PBMs engage in spread pricing, charging health plans more for a drug than they reimburse pharmacies and keeping the difference, while simultaneously reducing reimbursements to independent pharmacies to drive them out of business.

The conflicts run deeper. As Wendell Potter detailed in Healthcare Uncovered, the joint ownership of insurance companies, PBMs, provider organizations, and pharmacies allows parent companies to game the Affordable Care Act's (ACA's) medical loss ratio (MLR) requirement. The ACA mandates that insurers spend 80-85% of premium dollars on medical care. When an insurer owns the PBM, the provider group, or the pharmacy, it can count internal payments to those entities as "medical care" for MLR purposes, even though those payments are self-dealing. This accounting maneuver converts premium dollars to profits at a rate Congress never intended.

Antitrust enforcement has proven inadequate to the task. From 2000 to 2020, only 13 mergers out of 1,164 were challenged by the FTC. As Erin Fuse Brown, professor at Brown University's School of Public Health, noted during a recent KFF Health Wonk Shop panel, antitrust enforcement has largely looked the other way on vertical consolidation, and even when agencies have attempted to bring cases, they have struggled to convince courts that vertical mergers pose a competitive risk.

The Promise for Patients and Providers

If enacted, the bill could address several of the structural conflicts of interest that drive up costs and limit patient choice. Forced separation of PBMs from their affiliated pharmacies could create a more level playing field for independent pharmacies, which currently compete against entities that also control their reimbursement rates. For people living with chronic conditions who rely on specialty medications, the current system means that the company deciding what drug is covered, how much the patient pays, and which pharmacy fills the prescription can be the same company. Breaking those links could open real competition in both pricing and access.

The bill would also force the divestiture of insurer-owned physician practices, a development that could restore meaningful clinical autonomy for physicians and potentially slow the trend of care being steered toward affiliated, higher-cost settings. Consolidation has already narrowed provider choice for patients across the country. Hospital consolidation from 1998 to 2021 resulted in 1,887 mergers and reduced the number of hospitals nationwide by about 25%. The GAO reported that rural hospital closures force residents to travel roughly 20 miles farther for common inpatient services and about 40 miles farther for less common services. When consolidated systems close facilities or eliminate services that rarely turn a profit, such as maternity wards, primary care clinics, and emergency departments, patients in underserved and rural communities face fewer doctors, longer wait times, and greater distances to travel for care. For low-income patients who may lack access to paid time off, reliable transportation, or affordable child care, those distances can mean the difference between receiving care and going without. Reducing the financial incentive for insurers to steer patients exclusively to affiliated providers could, over time, help preserve a broader range of care options in the communities that need them most.

The bill's expansive definition of "provider" and its inclusion of MSOs is significant: it closes the backdoor through which corporate entities use management services agreements to exert de facto control over physician practices without technically owning them. The private right of action with treble damages gives patients and affected parties a meaningful tool to hold companies accountable, something traditional antitrust enforcement has failed to do at scale.

The Pitfalls

The bill's ambition is also its vulnerability. A one-year divestiture timeline for restructuring trillion-dollar companies like UnitedHealth Group, CVS Health, and Cigna is aggressive by any measure. The logistics of unwinding these conglomerates, separating data systems, reassigning contracts, re-establishing independent management structures, present real operational risk. Corey Katz, a partner at Bates White Economic Consulting, cautioned during the KFF panel that policymakers should be careful of unintended consequences because the linkages in these systems are complex, and breaking them can produce adverse outcomes that were not anticipated. He pointed to the Haven joint venture between JP Morgan, Amazon, and Berkshire Hathaway, which sought to make healthcare more efficient and collapsed within five years, as evidence that restructuring healthcare delivery is harder than it appears.

Industry has already signaled opposition. CVS Health Group president David Joyner pushed back on the characterization of the system as market concentration at a House hearing in January, describing the integrated model as one that "works really well for the consumer." Evidence would seem to suggest otherwise, but Mr. Joyner is certainly welcome to his opinion.

The bill also has notable gaps. It does not address hospital-to-hospital horizontal mergers, which remain a primary driver of higher prices in local markets. It does not address private equity acquisitions of physician practices, which a GAO analysis found can lead to 4-16% increases in commercial insurance spending depending on the specialty. And it does not address the payment system incentives, particularly the persistent site-of-care payment differentials where Medicare pays two to four times more for identical outpatient procedures performed in a hospital setting versus a physician's office, that create the financial motivation for consolidation in the first place. Fuse Brown acknowledged that structural separation is a "blunt instrument" but argued that we have reached the point where antitrust tools have proven insufficient and bolder approaches are warranted.

What This Means for People Living with Chronic Conditions

For people living with HIV and other chronic conditions, pharmacy access is a persistent concern. The current vertically integrated system can dictate which pharmacy fills a prescription, what drugs appear on a formulary, and what a patient pays out of pocket. PBM-driven patient steering limits access to specialty pharmacies and 340B providers that play a critical role in serving people who are most affected by healthcare costs. Consolidation also disproportionately impacts communities of color, who, as the Commonwealth Fund noted, are more likely to face medical debt, are more vulnerable to increased costs, and are more likely to bear the brunt of the often cruel business practices that consolidation enables.

Separating PBMs from their captive pharmacies could expand real pharmacy choice for patients. But poorly managed divestiture could also temporarily destabilize specialty pharmacy networks or disrupt care coordination for people who depend on uninterrupted medication access. The details of how divestiture is structured and monitored will matter as much as the principle behind it.

Looking Forward

The Break Up Big Medicine Act faces long odds in a divided Congress. But its bipartisan sponsorship reflects a genuine shift in the political calculus around healthcare consolidation, one that cuts across party lines and ideological camps. Whether or not the bill advances, it establishes a policy framework that advocates, policymakers, and the public can build on.

We should watch closely for how recently enacted PBM transparency rules interact with these structural proposals, how state-level merger review and health equity impact assessments continue to evolve, and whether the FTC and DOJ use existing authority to pursue vertical consolidation cases more aggressively. We should also urge our elected representatives to support the bill and, critically, to demand that any restructuring of the healthcare system be evaluated for its impact on patient access, affordability, and health equity. Structural separation is a necessary conversation. Making sure the people most affected by consolidation are centered in that conversation is our responsibility.