Cigna-Express Scripts Deal Poses Challenges to Insurers

From Health Plan Weekly

If Cigna Corp. completes its acquisition of Express Scripts Holding Co., the PBM's health insurer clients will have to decide whether to keep working with an entity now owned by a fellow payer.

"We will soon be in a market where most PBM lives are owned by or affiliated with a health plan," Dan Mendelson, president of Avalere Health, tells AIS Health, given that Express Scripts was the only remaining major stand-alone PBM. CVS Health Corp. is poised to acquire Aetna Inc. and OptumRx is owned by UnitedHealth Group.

Express Scripts currently has 51 health plan clients, according to AIS's Directory of Health Plans. Ten of those are Blue Cross Blue Shield-affiliated plans, which could opt to go with Anthem's in-house PBM — IngenioRx — once it debuts in 2020.

Express Scripts CEO Tim Wentworth said that the PBM will continue to be a valuable partner for its insurer clients even after the acquisition. But for health plans that choose to part ways with the PBM, their choices are limited: to go with a much smaller firm or to set up their own PBMs.

"The challenge there is, those [smaller firms] may not have as aggressive of pricing as some of the big players do or may not have all of the capabilities that some of the big players do," David Dross, the leader of Mercer's managed pharmacy practice, says. "And then the other thing that also may happen is — because it's happened a lot in the last year or so — there's no guarantee down the road that a small player might [not] also get acquired by somebody."

After all, the vertical integration happening in the payer and PBM industries would help health care organizations improve PBM offerings via comprehensive data, according to Mendelson.

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