Break Up the Real Medical Cartel
The Break Up Big Medicine Act misdiagnoses the problem and could make healthcare even more unaffordable.
It's easy to blame so-called Big Medicine for our healthcare affordability crisis. These large vertically integrated companies, such as CVS Health and UnitedHealth Group, combine healthcare providers, insurers that pay for care, and middlemen who help negotiate prices. This setup is, unsurprisingly, prone to conflicts of interest, where the parent company benefits by paying itself and taking a cut of negotiated rebates at the patient's expense. The stories of these ethically questionable dealings are also well known, and include patients being tricked into paying higher prices for generic drugs or steered to affiliate practices against their wishes.
Considering these unscrupulous business practices, it's no wonder that the Break Up Big Medicine Act has bipartisan support. Even Mark Cuban, self-titled disrupter of healthcare, has been vocal in his support for the legislation and the politicians who support it. He argues that breaking up Big Medicine will increase patient choice and competition in healthcare. But that is where Cuban and his political allies are wrong.
No doubt, the public would love to see Big Medicine broken up. People are fed up with companies using patients as bargaining chips, trapping them in their subsidiary systems and limiting their ability to take their own healthcare choices (and money) outside of those networks.
However, breaking up Big Medicine in a vacuum won't increase competition. For instance, CVS Health, perhaps seeing the writing on the wall, is spinning off its retail CVS Pharmacy business. But this doesn't create new competitors in the healthcare marketplace. And the breakup of CVS Health doesn't provide new opportunities for competition by expanding its network so that patient choice can influence pricing and services.
Because the Break Up Big Medicine Act incorrectly identifies bigness and vertical integration as hindrances to competition, legislators are poised to add regulations that won't address the problem. They risk discouraging small-business entrants in healthcare by limiting possible growth and legislating away innovations and aspects of vertical integration that could align with patients' values, such as efficiency, reliability, and continuity of care. They also overlook the real issues: government-backed protectionism and patient capture.
Instead of breaking up Big Medicine for being big, legislators should focus on avenues that increase competition by repealing regulations that prevent patients from shopping, new businesses from entering, and protect Big Medicine (both vertically- and horizontally-integrated companies like large hospital systems) at the expense of smaller, independent companies and patients.
As long as someone else pays for healthcare, patients won't have the freedom or incentive to escape the network trap by shopping. Most healthcare purchasing power currently rests with the insurance company that chooses its network and the primary buyers of health insurance—employers and the government. In 2025, 91 percent of Americans' health insurance was government-subsidized, either directly or through employer tax exclusions. Lawmakers could help restore some balance for patients' choices to influence competitive offerings by expanding health savings accounts, relaxing Affordable Care Act restrictions on health insurance plans, and passing legislation that explicitly protects the rights of patients—including Medicaid patients—to make alternative payment arrangements such as cash pay and subscription plans.
Still, giving patients the opportunity to influence competitive offerings isn't enough. Big Medicine has survived in its current form for so long because anticompetitive and protectionist regulations have handed it market advantage after advantage, encouraging its growth and consolidation. To pave the way for new competitors of any size, legislators from both sides of the aisle could support holding nonprofit, tax-exempt hospitals to their mandate to provide charity care and accept the lower payments from Medicare and Medicaid. Site-neutral payment reforms that address unfair payment programs, such as 340B drug rebates and Medicare facility fees, are also a part of the solution. At the state level, legislators should repeal or restrict Certificate of Need laws, which exist in 34 states and allow existing healthcare facilities—whose representatives sit on state certifying boards—to forbid potential competitors from opening or expanding.
Improved competition could challenge Big Medicine, as Cuban's Cost Plus Drugs demonstrates. No one broke up CVS Health's pharmacy conglomerate before Cost Plus Drugs entered the marketplace, but the existence of this better business, which offered transparent prices and real shoppable value to patients, laid bare the murky practices of Big Medicine conglomerates and forced many of these companies to recalibrate drug pricing. Cost Plus Drugs has even begun to grow bigger and vertically integrate in ways that benefit both shareholders and patients. They've taken on limited manufacturing of hard-to-source generic drugs and begun contracting directly with employers, in place of the pharmacy benefit manager middlemen.
If lawmakers want to give Big Medicine a run for its money, the answer is not to break it up, which would discourage competition, but to take the hard steps to dismantle protectionist regulations. Rather than breaking up Big Medicine, the Mark Cuban-esque disruptors should be calling for a breakup of protected medicine.
