S. 3822 — Break Up Big Medicine Act

This section sets forth congressional findings on vertical integration and consolidation in the health care industry, including that (1) one insurance conglomerate controls approximately 10% of U.S. physicians; (2) more than three-quarters of U.S. doctors are employed by corporate entities; (3) three drug wholesalers control 98% of U.S. drug distribution and have pursued $16 billion in acquisitions of downstream suppliers since January 2024; and (4) three pharmacy benefit managers process nearly 80% of prescription drug claims. The section identifies inherent conflicts of interest in such structures (e.g., steering patients to affiliated providers, evading medical loss ratio requirements, inflating Medicare Advantage payments) and states Congress's intent to address them by requiring structural separation of vertically integrated conglomerates, divestiture of medical providers by parent companies owning insurers, pharmacy benefit managers, or drug/device wholesalers, and enhanced enforcement authorities for federal agencies, state attorneys general, and private citizens.

This section prohibits any person from directly or indirectly owning, operating, or controlling both (1) a healthcare provider or management services organization and (2) either (A) an insurance company and pharmacy benefit manager or (B) a prescription drug or medical device wholesaler, requiring divestiture of one set of entities within one year of enactment. It grants the Federal Trade Commission (FTC) and Department of Justice (DOJ) Antitrust Division joint or separate enforcement authority, including issuance of divestment milestone guidance within 30 days of enactment; monthly escrow of 10% of a violator's profits for missing milestones; and appointment of a divestiture trustee with sale authority if divestment is not completed timely. The section authorizes civil actions by the HHS Inspector General, DOJ Antitrust Division, FTC, or state attorneys general; establishes a private right of action with treble damages, attorney fees, and other relief; permits state attorneys general to sue as parens patriae; mandates cease-and-desist orders, divestiture, and disgorgement upon finding a violation; guarantees jury trials; and directs disgorged funds to an FTC-administered fund for harmed communities' healthcare needs. It further requires reporting of required divestitures to the FTC and DOJ Antitrust Division under the Hart-Scott-Rodino Act (15 U.S.C. 18a) without regard to size thresholds and tolls the one-year divestment period during any review.