Express Scripts Deal Would Make Cigna More Like UnitedHealth
On one level, the deal could pull business from
The broader message is that established players in health care are banding together to get bigger as frustration builds over costs and as powerful outsiders like online retail giant Amazon threaten to shake up the sector.
"The health care landscape is changing quite quickly," said
PBMs manage the pharmacy portion of health insurance benefits. They negotiate prices with drug manufacturers as well as the pharmacies that dispense medications. PBMs also advise health plans on "formularies" that assign particular drugs to tiers with different copay requirements.
In late 2017, analysts estimated that
Under terms of the deal announced Thursday, Cigna will buy
In a news release, Cigna officials pledged the deal would help improve quality while making health care more affordable. The insurer touted "the combined company's role as the connective tissue between individuals and their health care providers."
Bringing together PBMs and health insurers amounts to a vertical integration that some consumers might not immediately recognize. The pharmaceutical benefit is often embedded within an individual's broader health insurance coverage, with the PBM logo appearing in small print on the health plan ID card.
But it's vertical integration, nonetheless, and one that large employers will be watching carefully to see how it affects their costs and service, said
Thursday's news was greeted with skepticism by some.
"This type of merger would create a market-straddling giant, with new profit-maximizing incentives that could result in restricted choices throughout the marketplace, ultimately leading to higher costs," said
The
The PBM industry has come under fire in recent weeks with Trump administration officials questioning whether the companies actually contribute to high drug costs. Following a yearlong dispute between drug companies and PBMs about which sector is to blame for rising medication expenses,
United "is most immediately impacted by the combination," wrote
In a note to investors Thursday, Credit Suisse analyst
"However, we also believe that
In trading Thursday, shares of
___
(c)2018 the Star Tribune (Minneapolis)
Visit the Star Tribune (Minneapolis) at www.startribune.com
Distributed by Tribune Content Agency, LLC.
Erie Indemnity Co Files SEC Form 8-K, Current Report: (Feb. 22, 2018)
BRIEF: Retirees learn tips to stay fit at Laguna Woods’ first health fair and expo
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News