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Cigna to buy Express Scripts for $67 billion

Cigna, one of the largest health insurers in the country, is set to acquire pharmacy benefit manager Express Scripts (ESI) in a cash and stock transaction valued at approximately $67 billion. The proposed deal has Cigna acquiring ESI at a 31% premium and is expected to close by the end of 2018. 

While the acquisition is certainly the result of market pressure given the recent integrations of UnitedHealth/OptumRX and Aetna/CVS, this deal also makes good sense from a market-facing perspective as Cigna and ESI both have tremendously strong roots in the mid-market. Should the deal be approved, ESI will continue to operate as a separate pharmacy benefit manager (PBM), with it’s position as one of the largest in the country made even stronger. Additionally, this move validates the pharmacy carve-out model since all of the major health plans will own a PBM with carve-out business, which is a win for employers.

Scott’s Pharmacy Practice, Rx Advantage, is acutely aware of the operational concerns associated with such a large merger. Our team has already had discussions with ESI’s leadership on behalf of our clients and we will continue to work to optimize ESI’s performance during the integration period. Pharmacy continues to be a top priority at Scott as we create world-class health plans for mid-market employers.

Contact a Scott Benefits Consultant with any questions or concerns about the Cigna/ESI deal or to discuss how we can help improve your performance as you navigate the current landscape.

Written by Sean Willoughby-Ray

Sean Willoughby-Ray, based in Scott’s Greensboro office, has over 15 years experience in the field of employee benefits. He has been an integral part in the on-going development and implementation of Scott Benefit Services’ risk management and employee benefit strategies and currently serves as Head of Practice for the Benefit Services group.

Call Sean at 336-510-0070 if you have any questions or need any additional assistance.

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Pharmacy Trend: The Rising Cost of Diabetes

Presrciption Bottle With Pills

One hundred million Americans have diabetes or pre-diabetes and newly diagnosed cases have tripled over the past 20 years. As the seventh leading cause of death in the United States, diabetes is characterized by inadequate insulin secretion resulting in high blood sugar and potential long-term heart, kidney, eye or nerve complications. Along with the rise of newly diagnosed cases, there has been a sharp increase in the cost of medication, presenting a challenge for many diabetic patients and their employers.

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Employer Wellness Programs Compliance Update Three takeaways from Secretary of Labor v. Macy’s, Inc. et al

Employer Wellness Programs Compliance

The HIPAA nondiscrimination regulations aren’t new to most employers with wellness programs. Employers who offer health-contingent wellness programs are especially familiar with the requirement to provide a reasonable alternative standard as part of their wellness program compliance.

Currently, a pending district court case, Secretary of Labor v. Macy’s, Inc. et al, has placed a greater focus on the reasonable alternative standard portion of the HIPAA nondiscrimination regulations. This focus is specific to health-contingent wellness programs that are outcomes based. These wellness programs require individuals to attain or maintain a certain health outcome (or outcomes) to receive a reward. A tobacco health plan premium surcharge is one example.  Although this is an active case, with no official judgements or rulings, the flag has been raised by the Department of Labor specific to the reasonable alternative standard and outcomes-based programs. 

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