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Cigna: Icahn attacks driven by 'desire to profit' from shorting Express Scripts

Cigna Corp. again made a scathing response to activist investor Carl Icahn in the latest word war between the two over the company's pending merger with Express Scripts Holding Co.

The health insurer said Icahn showed "no apparent interest in understanding the underlying logic" of the acquisition, the current healthcare regulatory environment or what it called the unsustainable hike in costs of drugs in the U.S. It claims that Icahn's "ill-informed" statements are "motivated by a desire to profit off of his short position in Express Scripts by leveraging his recently bought stake in Cigna."

Cigna clarified that eliminating rebates is not a big deal, disputing Icahn's latest assertion that doing so will negatively affect the pharmacy benefits management industry. Icahn had said that the companies he controls spend more than $3 million a year on fees to Express Scripts, noting he would not pay the amount Express Scripts charges if his companies did not get back 95% of the rebates. Cigna replied by saying Icahn's companies are paying for the value Express Scripts brings, not the rebates.

Cigna also said that Amazon.com Inc.'s entry into the market and its plans to buy in-network pharmacy PillPack do not pose a threat to the deal and the pharmacy benefits management industry as a whole, as Icahn had warned in a letter to shareholders. Cigna noted the PillPack's business model does not compete with pharmacy benefits managers, which offers other capabilities beyond mail order pharmacy.

"It simply cannot be boiled down to rebates or Amazon or any other red herring issue that Mr. Icahn wants to seek to use as a scare tactic to support his own personal agenda," Cigna stated. It again urged Cigna shareholders to vote for the deal in an upcoming Aug. 24 meeting.