Cigna CEO David Cordani Thursday said the addition of the pharmacy benefit manager Express Scripts will help the health insurer offer a “more integrated approach that addresses the whole person.”
Cigna said it is nearing the close of its acquisition of Express Scripts, the last major standalone PBM in an industry under attack for rising prescription drug costs and questions about whether consumers and patients are getting the best deals on their medicines.
Insurers like Cigna are closing ranks around a model that brings the PBM closer to the health plan in hopes of creating a savvier buyer of prescription medicines while seeking more transparency. UnitedHealth Group already owns OptumRx, a fast-growing PBM and CVS Health, which owns the Caremark PBM, is nearing completion of its acquisition of Aetna, the nation’s third largest health insurer.
By the end of this year, Cordani said the acquisition of Express Scripts should close. “We’re ready to close and get on with execution,” Cordani told analysts on Cigna’s third quarter earnings call this morning.
PBMs are middlemen between drug makers and consumers when it comes to purchasing drugs and providing prescription coverage. The PBM’s role is in part to leverage its negotiating clout to get the best drug prices on behalf of its diverse base of customers that include large employers as well as Medicare and Medicaid.
Looking ahead, Cordani said the combination with Express Scripts should allow Cigna to offer a more integrated package of benefits and more closely monitor not only the patient’s medical costs but their prescription usage as well.
Cigna raised its earnings guidance for the rest of the year due in part to strong growth projected in its commercial insurance businesses. Cigna reported an additional more than 400,000 new commercially insured enrollees in the third quarter compared to the year-ago quarter last year. Cigna’s commercial enrollment rose 3% to 14.2 million customers.
Cigna’s third quarter profits jumped 38% to $ 772 million , or $ 3.14 per share, compared to $ 560 million, or $ 2.21 per share, in the year-ago period. Revenues rose 11% to $ 8.99 billion.