Date
23 June 2018
Cigna’s CEO David Cordani says the Express Scripts acquisition will be good news for the health insurer’s employer clients. Photo: Reuters
Cigna’s CEO David Cordani says the Express Scripts acquisition will be good news for the health insurer’s employer clients. Photo: Reuters

Health insurer Cigna to buy Express Scripts for US$52 bln

US health insurer Cigna has agreed to buy pharmacy benefits manager Express Scripts in a deal worth US$52 billion, the latest mega transaction in the healthcare-related business in the country.

The companies say the combination will lower costs for corporate clients by giving them more coordination between medical care and pharmacy benefits, particularly for pricey specialty drugs, Reuters reports.

“Our employer clients will be delighted with that,” Cigna CEO David Cordani was quoted as saying in an interview.

The firms project US$600 million in annual savings through the combination.

Cigna’s offer consists of US$48.75 in cash and 0.2434 in shares of the combined company for each Express Scripts share, amounting to US$96.03 per share.

That represents a premium of nearly 31 percent to Express Scripts’ Wednesday closing price, according to Reuters.

Cigna will also assume about US$15 billion in Express Scripts’ debt. 

After the deal closes, expected by the end of the year, Cigna shareholders will own about 64 percent of the combined company and Express Scripts shareholders the rest.

The deal comes as the pharmacy benefits business, which tries to negotiate down the price of prescription medicines for large employers, has drawn fire from the Trump administration and Congress, who have questioned whether those discounts are really being passed on to consumers, Reuters noted.

Cigna’s transaction follows close on the heels of a rival US$69 bln merger between retail pharmacy chain CVS Health and health insurer Aetna, announced in December.

Together, the deals would represent a massive consolidation of the market for managing employees’ prescription drug benefits.

– Contact us at [email protected]

CG/RC

EJI Weekly Newsletter

Please click here to unsubscribe