With Deal Nearly Done, What’s Next for Cigna/Express Scripts?

by Leslie Small

On Sept. 17, the U.S. Department of Justice (DOJ) formally approved Cigna Corp.’s acquisition of Express Scripts Holding Co., a move that sets the companies on a path to close their transaction by the end of the year. The deal still must get the green light from some state regulators, but industry analysts largely expect them to fall in line with the DOJ’s verdict.

Once their tie-up is completed, though, Cigna and Express Scripts will be tasked with a new set of challenges — including integrating two very different businesses and creating a convincing value proposition to clients facing a dynamic PBM landscape, experts tell AIS Health.

“I think the greatest challenge will be kind of the integration of different cultures,” says Brian Anderson, a principal at Milliman, Inc., noting that Express Scripts is used to functioning as a stand-alone PBM and Cigna as a health insurer.

But James Burns, a health care antitrust attorney and partner at Akerman LLP, says he isn’t sure that integrating cultures will be much of an issue for the two companies.

“In this particular merger, because the parties are in distinct practice areas — one’s a PBM and one’s a health insurer — there won’t be, presumably, as much of a need for wholesale integration,” he says. “I would imagine that the PBM arm would continue to act as a PBM, and the insurer will continue to act as an insurer, and presumably, as well, the upper level management of the PBM wouldn’t presume to know the best way of running an insurer and vice versa.”

PBMs of all varieties, meanwhile, are facing heightened political scrutiny of their business model and potential changes in the structure of prescription drug rebates. Yet Anderson says he isn’t especially worried about those possible headwinds.

“I don’t see much of a major impact, [but] they’re going to have to learn how to compete and learn how to fine-tune their marketing pitch,” he says of Express Scripts and Cigna.

 From RADAR on Drug Benefits

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