Cigna, Specific Scripts merger might have restricted impact on comp sector

Cigna Corp.’s $52 billion proposed acquisition of Specific Scripts Holding Co. might ultimately result in decrease drug prices for employees compensation payers, nevertheless it’s too early to inform how huge these financial savings may be, specialists say.

The well being insurer’s announcement Thursday that it will purchase the pharmacy advantages supervisor is a part of an general development of well being insurers making an attempt to align their enterprise targets with these of PBMs.

The deal follows the $69 billion merger of insurer Aetna Inc. and one in every of Specific Scripts’ greatest rivals, CVS Well being Corp., introduced final December.

The merger of St. Louis-based Specific Scripts and Bloomfield, Connecticut-based Cigna will save $600 million yearly resulting from improved administrative efficiencies, higher coordination between pharmacy and medical claims and elevated leverage in worth negotiations with pharmaceutical firms, in response to an announcement by the businesses. Neither firm returned calls searching for remark.

The general financial savings might trickle into employees comp, mentioned to Gerry Glombicki, Chicago-based director at Fitch Rankings Inc.

“When vertical integration takes off and you might be part of it, you would be cheaper medicines for a selected subset of individuals … In combination, it isn’t going to maneuver the needle a lot,” he mentioned.

Joe Paduda, Skaneateles, New York-based president of CompPharma L.L.C., mentioned it’s too quickly to inform what the merger might do for employees comp, which is already seeing its drug spend down by double digits lately.

“(PBMs) have continued to exhibit to payers that they successfully handle medicine,” he mentioned. “My robust sense is that they may proceed to emphasise robust medical administration and lowered opioids use.”

The newest merger comes practically a yr after Specific Scripts introduced its buy of Tampa, Florida-based Matrix Healthcare Providers Inc., which does enterprise as MyMatrixx. That smaller PBM was touted as a market chief for employees comp shoppers, Specific Scripts President and CEO Tim Wentworth mentioned in an announcement on the time of the acquisition.


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