Under pressure to suppress increasing health-care costs, health insurance company Cigna announced on Thursday that it had agreed to buy Express Scripts, the largest pharmacy benefit manager in the country, for $52 billion.
Health-care spending is inexorably rising. Insurers, drug-benefit managers, drug distributors, pharmacies, and large medical groups all get a cut of the profits from caring for patients. The thought is bringing these businesses together could help streamline some costs and improve care.
This deal could also help Cigna compete with UnitedHealth Group Inc., which has clinics, drug benefits, and insurance business, and CVS Health Corp., which agreed to buy Aetna Inc., linking its pharmacies and drug-benefit plans with the insurer’s coverage.
Although a combined Cigna-Express Scripts would have great bargaining power over drug prices, it remains to be seen whether this deal would reduce costs for the employers and patients who pay the bill.
Recently, pharmacy benefits managers have come under pressure from critics of the health sector’s inefficiencies. Attacks have been aimed at a system of rebates that critics say obscure a drug’s true cost and often don’t benefit patients.
Express Scripts is the largest of the remaining independent pharmacy-benefit managers. They have recently noted the benefits of staying independent, though recent deals in health care appears to have changed its mind.
The agreement comes as Express Scripts is set to lose its biggest client, Anthem Inc. as it said it would set up its own pharmacy-benefits management unit after accusing Express Scripts of overcharging for drugs.
900 North Shoreline Boulevard Mountain View, CA 94043 (650) 966-1492
Check the background of your financial professional on FINRA'S BROKERCHECK
Investment advisory services offered through Liberty Wealth Management LLC, a registered investment advisor with the SEC. Securities offered through Liberty Group, LLC, Member FINRA, SIPC. For additional information on lwm or your investment advisor representative, please visit the following website: www.adviserinfo.sec.gov.