On Thursday, health insurance giant Cigna announced it will buy Express Scripts, the largest pharmacy benefit manager in the country. Unless federal regulators move to block it — as they did with two recent proposed health insurance company tie-ups — the merger is expected to be complete by the end of the year.
It’s just the latest sign that healthcare giants are trying to gain more control over rising costs, especially for new prescription medicines. In December, CVS Health — a pharmacy benefit manager with almost 90 million plan members — announced it would buy Aetna, which has an estimated 45 million customers.
In a joint statement, the companies said the merger will offer three main strategic benefits:
The Cigna-Express Scripts deal comes on the heels of similar vertical mergers. In December, CVS Health, whose Caremark PBM competes with Express Scripts, said it intends to buy health insurance giant Aetna. Last month the grocery chain Albertsons agreed to buy Rite-Aid pharmacies, and in January, Amazon, JPMorgan Chase and Warren Buffet’s Berkshire Hathaway said they were joining forces to create an undefined health care company.
Cigna and Express Scripts say the combination of the companies will make health care simpler for their customers and will cut costs. The companies say they expect the deal to close by the end of 2018, but it must pass antitrust and regulatory scrutiny.
Consumers advocates have warned that deal could be anticompetitive and lead to fewer options for patients. Both CVS and Aetna have pledged that the deal, if confirmed, would not lead to service restrictions.