Cigna buying Express Scripts for $67 billion
The latest contraction in the health care industry has serious implications for retailers.
In the latest shakeup in health care retail, insurer Cigna announced Thursday that it plans to acquire pharmacy benefit manager Express Scripts in a $67 billion deal. Express Scripts has big retail clients including Walmart and Amazon.
The recurring consolidation in the health care industry comes as retailers try fend off heightened competition from Amazon and others.
“Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers,” said David M. Cordani, President and Chief Executive Officer of Cigna. “This combination accelerates Cigna’s enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities. 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.”
On Thursday Cordani told CNBC that the health-care marketplace in its current form is not sustainable.
The Cigna news comes after CVS Health said in December it would acquire health insurer Aetna for around $69 billion.
Walgreens was reportedly considering buying drug distributor AmerisourceBergen after it acquired a bunch of Rite Aid stores.
Then Albertsons Cos. bought the Rite Aid stores that Walgreens didn't buy.
And finally, Amazon recently announced a joint venture with JPMorgan Chase and Warren Buffett's Berkshire Hathaway to try to curb medical costs for their employees.
“First and foremost, we believe this transaction delivers attractive value to the Express Scripts shareholders" said Tim Wentworth, President and Chief Executive Officer of Express Scripts. Regarding the combination of Cigna and Express Scripts, Mr. Wentworth noted, "Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve. 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 healthcare. We will continue to have a distinct focus at Express Scripts and eviCore on partnering with health plans, and together, build tailored solutions for health plans and their members. Importantly, this agreement is a testament to the work of our team and their resolute focus on providing the best care to patients, and the most value to clients.”