A Conversation with Dave Cordani, President and CEO of Cigna, About Express Scripts

I had the opportunity to talk to Dave Cordani, President and CEO of Cigna regarding their planned purchase of Express Scripts. The health insurance carriers get it – they very much need to bring solutions to the market or solutions, which may not be optimal to the carriers, will be imposed upon them. Cigna’s intent is to create better linkage between physical health, mental health and now pharmacy to create a unified approach to promoting the optimal blending of mind and body health. With pharmacy representing around 20% of total healthcare spending and with specialty medication costs as the fastest-rising component of cost increases, Cigna believes that controlling the pharmacy benefit manager (PBM) component is essential. When evaluating gaps in care, Cigna says that pharmacy noncompliance is the biggest culprit leading to increased cost overall.

I asked David about UnitedHealthcare’s recent announcement to pass rebates directly to consumers and he feels this is consistent with Cigna’s approach to creating value-based solutions with greater transparency (note Aetna just announced they’ll be passing through rebates as well). Cigna is looking to lead societal change in healthcare, focusing on causes of poor health and not on symptoms. They have been a leader in fighting the opioid crisis, with steps such as recently eliminating coverage for OxyContin. Cigna plans to use their Express Scripts purchase to increase their focus on creating an open-access platform with flexible solutions; using value-based care strategies for both the commercial marketplace and also for government-sponsored coverage. And 80 million Express Scripts members gives them access to almost 25% of all Americans.

I have not heard of any roadblocks to this vertically-integrated combination. Unlike Cigna’s aborted Anthem merger and Aetna’s failed effort at acquiring Humana (two efforts at horizontal integration) the acquisition of Express Scripts doesn’t seem, to me at least, to be anti-competitive. UnitedHealthcare already owns Optum, a leading PBM, and Aetna is merging with CVS. CVS owns Caremark, another large PBM. Anthem is going the route of building their own PBM. So, this combination has strong precedence in the market. And it makes sense. Compressing distribution eliminates channel conflicts and should result in more efficient value-based care delivery. Pharmacy costs are under the microscope. Let’s hope that this realignment is successful.

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