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Perspectives on Cigna-Express Scripts Deal

Posted by Matt Breese on Mar 13, 2018

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Cigna Corp. on March 8 said it would buy Express Scripts Holding Co. in a $67 billion deal, a move that analysts say furthers the trend of payers and PBMs joining together in a single diversified entity. 

Cigna agreed to pay $48.75 in cash and 0.2434 shares of stock of the combined company for each Express Scripts share. Such a move would give the insurer control over the pharmacy space and a greater scale that helps cut costs, according to Jefferies analyst David Windley. 

This deal follows a path in recent years of industry consolidation in the pharma supply chain, as health plans are moving to integrate pharmacy and medical management capabilities. 

Ashraf Shehata, a partner at KPMG’s Global Healthcare Center of Excellence, thinks the industry is moving away from the stand-alone PBM model. He tells AIS Health

"[Express Scripts], of course, was the remaining pure play. I think what’s kind of prevailing right now is this notion that the PBMs are really starting to kind of attach their value to a larger ecosystem."

The deal may affect CVS’s $69 billion deal to purchase Aetna, which combines a PBM-and-retail-pharmacy powerhouse with a major health insurer, as the Department of Justice might review these deals in parallel, thus slowing down the review process. 

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