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Cigna, Express Scripts $67B deal does not close door on other insurers: Execs

With Cigna Corp.'s $67 billion purchase of Express Scripts Holding Co., the last large, stand-alone pharmacy-benefit manager and its roughly 100 million customers will be absorbed by a major health insurer.

That should not impact Express Scripts' multibillion-dollar contracts with other managed care providers, CEOS of both companies said on an investor call after the March 8 announcement.

"For the health plans we serve, I want to be clear that our strong relationships with you do not change," President and CEO Tim Wentworth said on the call. "We will maintain guard rails to protect health plan client data and ensure competition."

Together with CVS Health Corp.'s Caremark and UnitedHealth Group Inc.'s OptumRx, Express Scripts is one of the largest pharmacy-benefit managers, or PBMs, in the United States. CVS struck a $69 billion deal for insurer Aetna Inc. in December 2017, leaving Express Scripts as the lone PBM of the big three unattached to a major health insurer.

The St. Louis-based company, which acts as the cost-negotiating middleman between drugmakers and a range of insurers, employers and government plans, currently manages prescriptions and benefits for more than 100 million people, according to Wentworth. That figure includes growth from the company's own recent acquisition of benefits manager eviCore for $3.6 billion.

Approximately 38% of Express Scripts' estimated 2017 revenue came from health plans, according to a Barclays report last year that factored in the PBM's biggest overall revenue driver, the nearly $17 billion, 10-year contract with Anthem Inc. The insurer has publicly discussed parting ways with Express Scripts when the contract expires at the end of 2019.

Outside of Anthem, Express Scripts' most valuable health plan contracts are with Blue Cross Blue Shield of Michigan Mutual Insurance Co., Highmark Inc., BlueCross BlueShield of Tennessee Inc. and Blue Cross & Blue Shield of Massachusetts Inc., each valued near $2 billion in 2017, according to the Barclays report. Express Scripts also manages a $1.4 billion Premera Blue Cross contract and a $1 billion agreement with Blue Cross and Blue Shield of Louisiana, a business of Louisiana Health Service & Indemnity Co. All six rank among its 10 highest-value contracts.

Express Scripts' data will help leverage evidence-based care, Cigna President and CEO David Cordani said on the call.

Payers and employers have increasingly looked to cut down healthcare expenses and play a role in cost decisions. Earlier in the year, Amazon.com Inc., JPMorgan Chase & Co. and Berkshire Hathaway Inc. announced they would combine forces to explore healthcare options for their collective 1 million employees.