Cigna CEO David Cordani on Carl Icahn opposing Express Scripts deal
Cigna CEO David Cordani is “disenchanted” famed activist investor Carl Icahn aired his considerations concerning the well being insurer’s acquisition of Categorical Scripts in an open letter as an alternative of sharing them with Cigna, Cordani informed CNBC’s “Squawk on the Avenue” on Wednesday.
Icahn revealed a searing letter Tuesday opposing Cigna’s $54 billion acquisition of pharmacy profit supervisor Categorical Scripts. Titled “Cigna’s $60 billion folly,” he says shopping for the agency “could effectively change into one of many worst blunders in company historical past.”
“We’re disenchanted that he selected that, his technique of communication was an open letter,” Cordani mentioned. “There’s been no inbound [communication] to our company.”
Cigna says it and Categorical Scripts are complementary companies that when mixed can enhance look after sufferers and decrease health-care prices. Icahn argues looming regulatory danger mixed with the potential for Amazon disrupting the trade pose “existential threats to the PBM enterprise mannequin.”
Pharmacy profit managers management which medicine are coated and negotiate reductions, often known as rebates, on branded medicine with producers. They are a favourite goal of drugmakers, who say these middlemen need greater drug costs to allow them to squeeze greater income from rebates.
The Trump administration has vowed to re-examine this technique. President Donald Trump spent a big chunk of his speech saying his blueprint to decrease drug costs attacking middlemen, who he mentioned “will not be so wealthy anymore.” Pfizer CEO Ian Learn final week informed Wall Avenue analysts he believes the Trump administration could remove rebates altogether.
Amazon doesn’t at the moment function within the prescription drug profit house, although earlier this 12 months it mentioned it will purchase on-line pharmacy start-up PillPack.
“Because it pertains to Amazon, it is one other instance of change and evolution,” Cordani mentioned Wednesday. “They’re getting into the mail order pharmaceutical achievement. We see that motion, clearly we anticipated that motion. The scientific integration, we expect, is the purpose of differentiation.”
Rival well being insurer Aetna is within the technique of being acquired by CVS Well being. The roughly $69 billion deal would create a health-care powerhouse, combining insurance coverage, prescription drug advantages and drugstores. Shareholders from each corporations have already authorized the deal, and CVS mentioned Wednesday it expects it to shut within the late third quarter or early fourth quarter of this 12 months.
“We’re dedicated to this actually engaging strategic and monetary mixture,” Cordani mentioned.
Supply hyperlink – https://www.cnbc.com/2018/08/08/cigna-ceo-david-cordani-on-carl-icahn-opposing-express-scripts-deal.html