Cigna Corporation, the fifth largest health insurer in the U.S., finalized its $67 billion acquisition of pharmacy benefit manager Express Scripts on Thursday, the company announced, and pledged the combined company would deliver improved affordability and choice.
Bloomfield, Conn.-based Cigna announced in early March its plans to buy the nation’s largest stand-alone pharmacy benefit manager (PBM) in a $67 billion deal. Express Scripts, based in St. Louis, is responsible for the prescription plans of more than 80 million Americans.
In the past year, there has been a wave of PBM and insurer integrations, vertical mergers and acquisitions. This past December, CVS Health, which has both pharmacy and PBM capabilities, announced plans to acquire leading health insurer Aetna for $69 billion That deal, the largest ever in the health insurance industry, was completed in November.
Days after news of the Cigna/Express Scripts proposed merger back in March, Centene Corporation announced it had made a major investment in RxAdvance, a cloud-based PBM led by former Apple CEO John Sculley. Express Scripts is one of three large PBMs in the industry, the other two being CVS Caremark and UnitedHealth Group’s OptumRx. With the successful closing of the CVS-Aetna deal and the Cigna-Express Scripts deal, the nation’s largest PBMs are now aligned with the three largest payers, creating large, vertically-integrated healthcare entities.
The Justice Department cleared the Cigna-Express Scripts merger back in September, and Cigna received final approval from New Jersey regulators this week, the last state necessary to complete the merger.
In a statement, David Cordani, president and CEO of Cigna, said the acquisition establishes a “blueprint for personalized, whole person health care” and further enhances Cigna’s “ability to put the customer at the center by creating a flexible, open and connected model that improves affordability, choice and predictability.:
“Today’s closing represents a major milestone in Cigna’s drive to transform our health care system for our customers, clients, partners and communities,” Cordani said. “By approaching each individual as a whole person – body and mind as one – we are empowering and supporting customers to take control of their total health and well-being. As a combined company, we are also going deeper into our local communities to help close gaps in care.”
Cordani also said that the combination of Cigna with Express Scripts “integrates two complementary health care service companies, each with industry-leading cost trend capabilities, that together, are positioned to deliver better care, expanded choice and drive down health care costs.”
“With Express Scripts, Cigna can dramatically accelerate the number and breadth of value-based relationships,” he said. “This model of partnership aligns incentives to clinical outcomes, not just consumption of the medication or health care services, adding to Cigna's rapidly expanding collaborative care network. These relationships will be further strengthened by our comprehensive analytics platform, which is based on insights from one billion annual customer touchpoints, and is designed to drive transparency and engagement with clients and customers.”
On Thursday, Cigna also announced a $200 million investment to support local communities, focused on improving societal health. Cordani said the investment will be a key driver of transforming health care at the societal and local levels.
The company also launched an initiative called Healthier Kids for Our Future, a community engagement program focused on addressing the well-being of children globally. Through a five-year $25 million investment, this new initiative will address the health and well-being needs of children around the world the company said. In 2019, the initiative will focus on putting children on a healthier path by eradicating childhood hunger and improving nutrition.