What Does the Cigna-Express Scripts Merger Mean for the Future of Health Care?

The Justice Department has approved the merger of Cigna and Express Scripts. The $67 billion merger between a pharmacy benefit manager and one of the largest health insurers in the country will be the first of its kind.

Cigna and Express Scripts claim that the merger will benefit patients by lowering costs while also streamlining services. With drug prices on the rise and Amazon beginning to dabble in health care, companies are increasingly searching for ways to draw in patients.

“The value that we deliver together will help put our society on a far more sustainable path,” said the President and CEO of Cigna, David Cordani, in a statement, “one that helps health care professionals close gaps in care and supports our customers along their health journey.”¹

“Together, we believe we will be able to do even more to reduce healthcare costs, expand choice, and improve patient outcomes,” added the President and CEO of Express Scripts, Tim Wentworth in the statement.

Not everyone agrees with these kinds of companies coming together. The American Medical Association² released a statement opposing another such merger, the CVS-Aetna merger, expressing concerns that the partnership might decrease competition, increase out-of-pocket expenses, and actually drive up drug prices.

This green light from the Department of Justice sets a precedent for future partnerships, like Aetna and CVS, and strikes down the notion that these kinds of mergers would hinder competition.

“Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to US consumers,” said Assistant Attorney General Makan Delrahim.³ “After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and [Express Scripts], a pharmacy benefit management company, is unlikely to result in harm to competition or consumers.”

With the Cigna-Express Scripts deal set to close at the end of this year, patients will have to wait to see what 2019 brings.

 

 

References

 

1. BusinessWire. US Department of Justice Grants Clearance to Cigna’s Acquisition of Express Scripts [news release]. https://www.businesswire.com/news/home/20180917005680/en/U.S.-Department-Justice-Grants-Clearance-Cigna%E2%80%99s-Acquisition. September 17, 2018. Accessed November 5, 2018.
2. American Medical Association. CVS-Aetna and Cigna-Express Scripts Mergers. https://www.ama-assn.org/delivering-care/cvs-aetna-and-cigna-express-scripts-mergers. August 2018. Accessed November 5, 2018.
3. US Department of Justice. Statement of the Department of Justice Antitrust Division on the Closing of Its Investigation of the Cigna-Express Scripts Merger [news release]. https://www.justice.gov/atr/closing-statement. September 17, 2018. Accessed November 5, 2018.