Res No. 399

Resolution calling on the United States Senate to pass S.3822, the United States House of Representatives to draft and pass companion legislation, and for the President to sign S.3822 and such companion legislation, to prohibit healthcare companies from owning both ends of a healthcare supply chain transaction

By Council Member Schulman

                     Whereas, Senators Elizabeth Warren (D-MA) and Josh Hawley (R-MO) introduced in the United States Senate S.3822, also known as the Break Up Big Medicine Act, which would make it unlawful for insurers, pharmacy benefit managers (PBMs), and pharmacy wholesalers to control both ends of the healthcare supply chain; and

                     Whereas, PBMs, according to KFF, are middlemen who manage pharmacy benefits for health insurance companies and self-insured employer plans, and pharmacy wholesalers are intermediaries who purchase drugs from manufacturers and sell those drugs to pharmacies, hospitals, nursing homes, and other medical facilities, according to the Commonwealth Fund; and

                     Whereas, An oligopsony occurs when a few firms dominate the purchase of goods, services, or factors of production, allowing them to pay lower prices for goods, and an oligopoly exists when an industry is dominated by a few large firms, controlling the supply of a good or service, which can result in collusion among firms and higher prices for consumers; and

                     Whereas, According to the Open Markets Institute, healthcare costs continue to rise and erode the standard of living, with a typical American family of four seeing an annual healthcare cost of $28,000 and with health insurance premiums increasing by 242 percent; and

                     Whereas, These higher prices are not a result of overutilization or better care, with peer nations like Germany utilizing healthcare services as or more often than in the United States, while life expectancy in the United States lags behind much of the European Union, according to the Open Markets Institute; and

                     Whereas, Large insurers, PBMs, and pharmacy wholesalers have been coming under increased scrutiny as they acquire assets at both the supply and distribution ends of the healthcare supply chain; and

                     Whereas, According to Congressional findings included in S.3822, large, publicly traded insurance conglomerates have been hiring physicians at an aggressive rate, with more than three quarters of all American doctors employed by corporate entities, and 10 percent of American physicians, according to MedPage Today, employed by just one, UnitedHealth’s Optimum division; and

                     Whereas, According to KFF, these large insurance companies also own PBMs, with the three largest PBMs, OptumRx, Express Scripts, and CVS Caremark, being owned by the aforementioned UnitedHealth, Cigna, and CVS Health respectively; and

                     Whereas, These three PBMs control nearly 80 percent of all prescription drug claims, while also owning mail order pharmacies and specialty pharmacies, according to KFF; and

                     Whereas, According to the Commonwealth Fund and Congressional findings included in S.3822, the three largest pharmaceutical wholesalers, AmerisourceBergen, Cardinal Health, and McKesson Corporation, account for more than 90 percent of wholesale drug distribution in the United States, while also acquiring downstream suppliers, such as specialty medical practices and medical supply distributors, worth approximately $16 billion across 1,000 locations in 35 states; and

                     Whereas, New York State ranks second among all states and the District of Columbia in per capita prescription drug and other medical product cost, according to World Population Review, and NY State of Health insurance plans are slated to see premiums increase, according to the New York Governor’s Office, making this a particularly pressing issue for New York; and

Whereas, S.3822 will prevent these large corporations from further cornering the healthcare market and creating an oligopsony and an oligopoly, and force them to divest where they already hold too much market power; now, therefore, be it;

                     Resolved, that the Council of the City of New York calls on the United States Senate to pass S.3822, the United States House of Representatives to draft and pass companion legislation, and for the President to sign S.3822 and such companion legislation, to prohibit healthcare companies from owning both ends of a healthcare supply chain transaction.

JN

LS 22016

3/12/2026