Cigna to acquire ExpressScripts for $67B
Health insurer Cigna has entered into a agreement to acquire Express Scripts. The combination of Bloomfield, Conn.-based Cigna and the St. Louis-based pharmacy benefits management company is valued at roughly $67 billion, the companies said — a scale similar to that of the ongoing $69 billion acquisition of health insurer Aetna by CVS Health.
As part of the stock-and-cash deal deal, Cigna will assume roughly $15 billion in Express Scripts’ sebt, with Cigna paying $48.75 and 0.2424 shares of its stock per one Express Scripts share. The companies said that the move is aimed at improving consumer choice in healthcare, providing more coordinated care and improving the value of healthcare dollars.
“Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers,” Cigna president and CEO David Cordani said. “This combination accelerates Cigna’s enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities. Together, we will create an expanded portfolio of health services, delivering greater consumer choice, closer alignment between the customer and health care provider, and more personalized value. This combination will create significant benefits to society and differentiated shareholder value.”
Once the transaction closes, Express Scripts shareholders will own roughly 36% of the combined company, with Cordani leading it as president and CEO. Express Scripts’ president and CEO Tim Wentworth will become president of Express Scripts, with the combined company’s board comprising 13 directors, four of whom will be independent Express Scripts board members. The combined company will be headquartered in Bloomfield, Conn., with Express Scripts continuing to be headquartered in St. Louis.
The deal comes as the healthcare industry works to find value-focused solutions to rising healthcare costs. In in 2016, the $3.3 trillion dollars in healthcare spending made up 17.9% of the United States’ gross domestic product. Both the Cigna-Express Scripts and CVS Health-Aetna mergers appear focused on personalized care through use of analytics. And where the CVS Health-Aetna merger is aimed at turning CVS Pharmacy into the “front door of health care,” as executives at both companies have said, Cigna’s move is meant to streamline the way healthcare is delivered by physicians while making medical, behavioral, specialty pharmacy and other services accessible through more channels.
“Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve,” Express Scripts’ Wentworth said. “Adding our company's leadership in pharmacy and medical benefit management, technology-powered clinical solutions, and specialized patient care model to Cigna’s track record of delivering value through innovation, we are positioned to transform healthcare. We will continue to have a distinct focus at Express Scripts and eviCore on partnering with health plans, and together, build tailored solutions for health plans and their members. Importantly, this agreement is a testament to the work of our team and their resolute focus on providing the best care to patients, and the most value to clients.”
As consolidation continues in the industry, smaller players — in particular community pharmacists — are growing concerned about their place in the healthcare world and what these pushes for patient access mean for their patients. On Thursday, National Community Pharmacists Association CEO Doug Hoey said that, as the orgnaization assesses the implications of Cigna's acquisition, “one thing is clear: Consolidation among health care giants leads to fewer choices for patients and plan sponsors.”
Hoey also registered his skepticism about such deals’ ability to curb soaring healthcare costs.
“Companies make claims of cost savings that will benefit patients and health plan sponsors, but the available evidence from previous consolidations suggests otherwise,” he said. “The merger of UnitedHealth and Catamaran a few years ago, for instance, certainly didn’t change the upward trajectory in health care spending.”
A narrowing field of industry players could have big consequences on patients, Hoey said.
“We’re seeing the growing balkanization of the health care industry — a world in which patients may be forced into a health care kingdom – the CVS-Aetna kingdom, the Cigna-Express Scripts kingdom, the UnitedHealth-OptumRx kingdom, et cetera — where the borders aren’t porous, and patients are stuck with what they get. Depending on where you live, that lack of choice could disadvantage patients who are trapped in inflexible pharmacy and health care networks that dictate the decision-making process for the delivery of care.”
As part of the stock-and-cash deal deal, Cigna will assume roughly $15 billion in Express Scripts’ sebt, with Cigna paying $48.75 and 0.2424 shares of its stock per one Express Scripts share. The companies said that the move is aimed at improving consumer choice in healthcare, providing more coordinated care and improving the value of healthcare dollars.
“Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers,” Cigna president and CEO David Cordani said. “This combination accelerates Cigna’s enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities. Together, we will create an expanded portfolio of health services, delivering greater consumer choice, closer alignment between the customer and health care provider, and more personalized value. This combination will create significant benefits to society and differentiated shareholder value.”
Once the transaction closes, Express Scripts shareholders will own roughly 36% of the combined company, with Cordani leading it as president and CEO. Express Scripts’ president and CEO Tim Wentworth will become president of Express Scripts, with the combined company’s board comprising 13 directors, four of whom will be independent Express Scripts board members. The combined company will be headquartered in Bloomfield, Conn., with Express Scripts continuing to be headquartered in St. Louis.
The deal comes as the healthcare industry works to find value-focused solutions to rising healthcare costs. In in 2016, the $3.3 trillion dollars in healthcare spending made up 17.9% of the United States’ gross domestic product. Both the Cigna-Express Scripts and CVS Health-Aetna mergers appear focused on personalized care through use of analytics. And where the CVS Health-Aetna merger is aimed at turning CVS Pharmacy into the “front door of health care,” as executives at both companies have said, Cigna’s move is meant to streamline the way healthcare is delivered by physicians while making medical, behavioral, specialty pharmacy and other services accessible through more channels.
“Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve,” Express Scripts’ Wentworth said. “Adding our company's leadership in pharmacy and medical benefit management, technology-powered clinical solutions, and specialized patient care model to Cigna’s track record of delivering value through innovation, we are positioned to transform healthcare. We will continue to have a distinct focus at Express Scripts and eviCore on partnering with health plans, and together, build tailored solutions for health plans and their members. Importantly, this agreement is a testament to the work of our team and their resolute focus on providing the best care to patients, and the most value to clients.”
As consolidation continues in the industry, smaller players — in particular community pharmacists — are growing concerned about their place in the healthcare world and what these pushes for patient access mean for their patients. On Thursday, National Community Pharmacists Association CEO Doug Hoey said that, as the orgnaization assesses the implications of Cigna's acquisition, “one thing is clear: Consolidation among health care giants leads to fewer choices for patients and plan sponsors.”
Hoey also registered his skepticism about such deals’ ability to curb soaring healthcare costs.
“Companies make claims of cost savings that will benefit patients and health plan sponsors, but the available evidence from previous consolidations suggests otherwise,” he said. “The merger of UnitedHealth and Catamaran a few years ago, for instance, certainly didn’t change the upward trajectory in health care spending.”
A narrowing field of industry players could have big consequences on patients, Hoey said.
“We’re seeing the growing balkanization of the health care industry — a world in which patients may be forced into a health care kingdom – the CVS-Aetna kingdom, the Cigna-Express Scripts kingdom, the UnitedHealth-OptumRx kingdom, et cetera — where the borders aren’t porous, and patients are stuck with what they get. Depending on where you live, that lack of choice could disadvantage patients who are trapped in inflexible pharmacy and health care networks that dictate the decision-making process for the delivery of care.”