Express Scripts joins a wave of independent PBMs to merge with or former closer ties with health insurers
Express Scripts reported adjusted claims of 1.4 billion in 2017, which was flat growth from 2016.
Snow covers the ground around Cigna Corp. signage displayed at the company's headquarters in this photo taken with a tilt-shift lens in Bloomfield, Connecticut, U.S., on Friday, Feb. 6, 2015. Photographer: Ron Antonelli/Bloomberg
Health insurer Cigna confirmed it will buy for $54 billion Express Scripts, the last major standalone pharmaceutical benefit manager.
Under terms of the deal announced Thursday, the price includes $48.75 in cash and 0.2434 shares of stock of the combined company, the companies said.
Express Scripts joins a wave of independent PBMs to merge with or former closer ties with health insurers as consumers and employers ratchet up pressure on health benefits companies to control prescription costs.UnitedHealth Group has its OptumRx PBM under the larger insurer’s umbrella and, CVS Health, which operates the large Caremark PBM, is buying Aetna, the nation’s third largest health insurance company.
PBMs are middlemen between drug makers and consumers when it comes to purchasing drugs and providing prescription coverage. The PBM’s role is in part to leverage its negotiating clout to get the best drug prices on behalf of its diverse base of customers that include large employers as well as Medicare and Medicaid.
Just last week, Express Scripts faced several questions from Wall Street analysts concerned the last major standalone PBM may lose business this year amid a turbulent period for pharmacy benefit managers and increasing competition from PBM rivals.
Express Scripts Tim Wentworth tried to extoll the virtues of the independent PBM model, but the reality is his company was having trouble increasing business. Last week, Express Scripts reported adjusted claims of 1.4 billion in 2017, which was flat growth from 2016.
Pressure began to build on Express Scripts in the last year to find a partner after it lost a major client in Anthem , the nation’s second-largest health insurer. Anthem is creating its own PBM, IngenioRx which will begin operations in January of 2020 so Express Scripts will continue to be Anthem's PBM vendor through Dec. 31, 2019, and "through the transition period in 2020," Anthem says.