Cigna To Spend About $52 Billion For Express Scripts
NEW YORK (AP) - The insurer Cigna will spend about $52 billion to acquire the nation's biggest pharmacy benefit manager, Express Scripts, the latest in a string of proposed tie-ups as health care's bill payers attempt to get a grip on rising costs.
Including $15 billion in debt, the proposed $67 billion acquisition follows a deal announced late last year in which the drugstore chain CVS Corp. said it will spend around $69 billion on the insurer Aetna Inc.
Insurers and pharmacy benefit managers — which run drug plans for insurers and employer-based plans — have struggled to corral spiraling costs and the industry that was jolted by the Affordable Care Act, which reshaped the individual insurance market and expanded the state- and federally funded Medicaid program.
In that environment the ultimate disruptor, Amazon.com, said this year that it wanted to get involved in health care as well in a collaboration with billionaire Warren Buffett and JPMorgan Chase. No one knows what that means yet, but it sent a shudder through the sector.
Insurers and others say they want to get more involved in patient care, to supplement what a regular doctor provides and keep people healthy and on their medications. They are especially focused on those with chronic conditions, like diabetes patients who need regular blood sugar monitoring. They say they want to change a system that generally waits until people get sick before treating them.
Aetna and CVS have said they hope to create "front doors" to health care through 9,800 stores run by CVS. That deal could turn many of the chain's stores into one-stop-shop locations for an array of health care needs like blood work and eye or hearing care, in addition to their traditional role of filling prescriptions.
UnitedHealth Group Inc., which runs the nation's largest insurer, is spending almost $5 billion to buy nearly 300 primary and specialty care clinics and some urgent care and surgery centers. That push will help the company steer patients away from expensive hospital care.
Another insurer, Humana Inc., is making a separate deal to better manage the care of its Medicare Advantage patients.
Cigna CEO David Cordani said Thursday that the combined company will make health care more simple for customers.
The deal announced Thursday consists of $48.75 in cash and a portion of stock in the combined company for each share of St. Louis-based Express Scripts Holding Co. Cordani will lead the combined company, with his Express Scripts counterpart, Tim Wentworth, staying on as a president.
The boards of both companies have approved the deal, which is expected to close at the end of this year.
Cigna was the target of an acquisition bid by the Blue Cross-Blue Shield insurer Anthem Inc. But Anthem ended that $48 billion offer last spring, accusing Cigna of sabotaging that deal. Cigna, in turn, said Anthem "willfully breached" its obligation to get regulatory approval.
A federal judge and an appeals court had rejected the combination after antitrust regulators sued to stop it.
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