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    Cigna-Express Scripts Deal: 5 Takeaways for Health Execs


    Cigna’s $67 billion purchase of PMB giant Express Scripts joins a trend of recent vertical and horizontal healthcare deals, and more could be on the way, according to industry experts.


    Expanded consumer choice, patient-provider alignment, and personalized value, are three strategic benefits cited by Cigna in a press release. The merged company will be headed up by current Cigna CEO David Cordani. Tim Wentworth, Express Scripts CEO, will also stay on as president of the company's Express Scripts unit.

    Cigna and Express Scripts are doing “what everyone else in the healthcare space is doing right now—reacting to continued cost pressures from the ACA and other industry players building scale against each other,” says Brad Haller, director in West Monroe’s M&A practice that focuses on healthcare.

    “Horizontal mergers, like Cigna-Anthem and Aetna-Humana, have been blocked,” Haller explains. “The vertical integration we are seeing with retailers (CVS) buying payers (Aetna) and drug makers (Roche) buying technology platforms (Flatiron) is the way industry is going until the Department of Justice tells them otherwise.” 


    This move is a response by two behemoths in healthcare to continue to be at the forefront as the market continues to evolve, according to Maulik Bhagat, managing director in the healthcare practice of AArete, a global consultancy specializing in data-informed performance improvement.

    “Value is what the market is demanding—quality holistic healthcare and wellness at an affordable cost,” Bhagat says. “It is possible that the recent developments like CVS-Aetna, Amazon-Berkshire Hathaway-JPMorgan, and Apple’s AC Wellness,  have hastened the decision, but this was probably coming in any case. And experts have long been talking about looking at the value from a holistic view when treating patients, so combining medical and pharmacy data is progress in that direction. 


    "Basically, all sorts of horizontal and vertical integration announcements that we are seeing in the market are to be able to have greater control over the delivery of healthcare, most importantly to leverage the collective data in order to drive insights and outcomes that wouldn’t be possible if not integrated,” Bhagat says

    For more on vertical healthcare deals, read: “What Roche’s Purchase of Flatiron Health Means for Health Execs,” “Walgreens-AmerisourceBergen Deal: 3 Takeaways,” and “Amazon, JPMorgan, Berkshire Hathaway collaboration puts insurers ‘on notice.’


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