UnitedHealth, CVS, Humana Face Double Trouble As Trump’s Medicare Cuts Are Just The Start—PBM ‘Spread Pricing’ Comes Under Fire

UnitedHealth Group Inc. (NYSE:UNH), CVS Health Corp. (NYSE:CVS), and Humana Inc. (NYSE:HUM) declined last week, but while investors focused on the Donald Trump administration’s proposed near-zero increase in Medicare Advantage, another major regulatory threat emerged late Thursday that could squeeze the industry’s profits from the other end.

The U.S. Department of Labor (DOL), on Jan. 29, issued a landmark proposed regulation demanding “radical transparency” from Pharmacy Benefit Managers (PBMs), the powerful middlemen owned by health giants like CVS (Caremark), UnitedHealth (OptumRx), and Cigna (Express Scripts).

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The proposed rule would require PBMs to fully disclose their compensation to self-insured group health plans, which cover approximately 90 million Americans. Specifically, the regulation targets:

Spread Pricing: Compensation received when the PBM charges a health plan more for a drug than it reimburses the pharmacy.

Rebates: Payments from drug manufacturers that critics argue are often retained by PBMs rather than passed to employers or patients.

Clawbacks: Payments recouped from pharmacies.

“When middlemen are forced to operate in the sunlight, American workers and their families win,” said Secretary Lori Chavez-DeRemer. “Hidden fees and distorted incentives have no place in American healthcare.”

The timing of the rule is notable given rising scrutiny over how PBMs handle rebates. On Jan. 6, Benzinga reported on an investigation by Hunterbrook Media alleging that major insurers use “shell companies” or Group Purchasing Organizations (GPOs) to hide billions in fees.

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The report claimed that while PBMs often promise to pass through 100% of rebates to customers, they allegedly funnel money through subsidiaries—some located in “ghost offices” in Ireland and Switzerland—that collect massive “fees” from drugmakers instead.

The new DOL regulation appears directly calibrated to close this loophole. The text of the proposed rule specifically defines “affiliates” and “agents” to ensure that compensation funneled through GPOs or rebate aggregators is disclosed to plan fiduciaries.