Cigna Corporation and Express Scripts Holding Company announced a definitive agreement in which Cigna will acquire Express Scripts for approximately $67 billion, according to a press release.
“We are at a pivotal moment in health care history. In the U.S., for example, health care is fragmented, disconnected and expensive, and therefore unsustainable for many,” David M. Cordani, president and CEO of Cigna, said in a video press release. “We must give individuals the greater ability to connect with their health care providers, to achieve their best health, and do so on a more affordable basis whether they’re healthy, at risk of becoming unhealthy, whether they have chronic disease or they’re in need of acute care.”
The combined company’s focus will include expanding consumer choice of medical, behavioral, specialty pharmacy and other health engagement services through retail and online distribution; provide a more coordinated approach in patient-provider alignment to reduce complexity and improve health care delivery systems; and create personalized value with evidence-based care and industry-leading innovation.
The American Mediclal Association, however, voiced concern with the combined impact of proposed mergers among the nation’s largest insurance companies and the country’s largest pharmacy benefits managers.
“A deal between Cigna and Express Scripts magnifies competition issues in the deal between CVS and Aetna,” David O. Barbe, MD, MHA, president of the AMA said. “The AMA expressed its concerns last week to a U.S. House Judiciary subcommittee and indicated that the proposed CVS-Aetna merger has the potential to worsen competition in three poorly performing markets: pharmacy benefit management services, local health insurance, and retail pharmacy. The AMA will continue to strongly encourage rigorous review of the proposed mergers by state and federal officials to determine if the ramifications of these deals will further restrict access and choice, raise prices and reduce quality care for patients, and avoid harm through further decline in competition.”
The merger consideration will include Cigna’s assumption of approximately $15 billion in Express Scripts debt, consist of $48.75 in cash and 0.2434 shares of combined company stock per Express Script share, and received approval each company’s board of directors.
Upon closing, the combined company will be known as Cigna, but Cigna and Express Scripts will continue to operate as independent companies.
The combined company will make an incremental investment of $200 million in its charitable foundation to support the communities in which the company operates. The board will also expand to 13 directors, including four members of the Express Scripts board.
“Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve,” Tim Wentworth, president and CEO of Express Scripts, said in the press release. “Adding our company's leadership in pharmacy and medical benefit management, technology-powered clinical solutions, and specialized patient care model to Cigna’s track record of delivering value through innovation, we are positioned to transform health care.”
Express Scripts declined additional comments beyond the press release. – by Talitha Bennett
Editor’s note: This article has been updated with quotes from the AMA.