Cigna to buy Express Scripts in $67 billion deal

Health insurer Cigna on Thursday announced it was acquiring pharmacy benefits manager Express Scripts in a $67 billion cash and stock deal.

Express Scripts is the largest independent drug middleman in the country. The acquisition is the latest to shake up the health industry as it looks to lower the rising cost of care. The move follows a similar merger of insurer Aetna and the drug store chain CVS in December.

The deal also comes a year after Cigna’s bid to purchase Anthem was blocked by federal regulators

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Cigna is aiming to lower costs by putting health insurance and pharmacy claims under the same umbrella company and to give themselves more leverage in price negotiations with drugmakers.

Pharmacy benefit managers (PBMs) act as buying intermediaries between drug manufacturers and health insurance plans and their beneficiaries. They negotiate drug rebates and pass the savings on to patients.

PBMs have come under political pressure recently as the Trump administration looks for ways to bring down drug prices.

On Wednesday, Food and Drug Administration Commissioner Scott Gottlieb criticized the secretive industry pricing deals in what he called a “rigged system.”

As the debate over drug prices intensifies, pharmaceutical companies have frequently blamed the PBMs for not passing on enough of the savings that they negotiate.

The Aetna–CVS deal is thought to have increased pressure on others in the industry to consider mergers to keep up with potential healthcare cost savings. 

Amazon, Berkshire Hathaway and JPMorgan Chase announced in January that they’re working together to create a new health-care venture for their own staff aimed at “improving employee satisfaction and reducing costs.”