December 15, 2018
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Health insurer Cigna to buy Express Scripts in $67 billion package

Wilfredo Lee | AP
Wilfredo Lee | AP
Express Scripts prescription medication bottles are arranged for a photo in Surfside, Florida, July 25, 2017. Health insurer Cigna will spend about $52 billion to acquire the pharmacy benefits manager Express Scripts, announced Thursday the latest in a string of proposed buyouts and tie-ups in a rapidly shifting landscape for the health services industry.

In another mega deal to reshape the business of negotiating drug prices, health insurer Cigna said Thursday it will acquire Express Scripts Holding, the nation’s largest pharmacy benefit manager, in a package valued at $67 billion.

The merger is the latest shoe to drop in a health care industry in flux. The pharmacy benefit industry — which negotiates for drug discounts on behalf of employers and insurers — has come under increasing scrutiny over its role in drug prices. In December, CVS Health, a major pharmacy benefit manager, announced it would acquire the insurer Aetna.

Four of the nation’s largest health insurance companies have tried in the past to grow through mergers — and failed due to antitrust concerns. In contrast, these vertical mergers that bring together companies with different health care functions have been seen as having a better chance. The CVS move was also seen by some as defense against a possible Amazon entry into the prescription drug industry.

The total scope of the deal is $67 billion, including about $15 billion of Express Scripts debt.

The deal could be closed by the end of the year, subject to shareholder and regulatory approval.

“Together, we will create an expanded portfolio of health services, delivering greater consumer choice, closer alignment between the customer and health care provider, and more personalized value. This combination will create significant benefits to society and differentiated shareholder value,” Cigna chief executive David Cordani said in a statement.

The two companies say the deal will broaden consumer choice and better align the incentives of the companies that pay for and provide health care.

“Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve,” said Tim Wentworth, president and CEO of Express Scripts.

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