Cigna Keeps Medical Costs in Check in 3Q, Raises Full-Year Earnings Outlook

Nov 04
Nov 04, 2022

Cigna Corp. on Nov. 3 reported third-quarter adjusted earnings per share (EPS) of $6.04, beating the Wall Street consensus expectation of $5.72 and getting a nod from one equities analyst for delivering “well-controlled medical costs.” During the company’s conference call to discuss quarterly results, executives touted Cigna’s big PBM contract win that will allow it to provide pharmacy benefits for Centene Corp. Yet they also fielded a critical analyst question about whether Cigna’s mergers and acquisitions (M&A) strategy is keeping up with the competition.

On the subject of the Centene PBM contract, which will begin in 2024 and cover 20 million members, Cigna CEO David Cordani said it “builds on Express Scripts’ track record as the partner of choice and will present growth opportunities to provide additional Evernorth health services over time.” Added Chief Financial Officer Brian Evanko: “This mutually beneficial partnership will bring significant revenue and be financially accretive over the course of the multi-year contract term.” In 2023, though, the new contract will create a “one-year headwind” financially as Cigna’s Express Scripts division invests funds to get the new partnership started, executives acknowledged.
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Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.