The $71 billion megamerger officially closed Thursday, as the pharmacy benefit manager and insurance giant join forces.
Cigna Corp. and Express Scripts Holding Co. officially closed on a $71 billion megamerger Thursday, aligning the pharmacy benefit manager (PBM) and insurer after months of negotiations and regulatory review.
The Philadelphia-based insurer and St. Louis-based PBM announced this spring that the two companies would pursue a merger and received shareholder approval for the deal in August.
The deal closed two days after New Jersey state regulators gave the two companies final approval, and less than a week after California and New York signed off as well.
"Today’s closing represents a major milestone in Cigna’s drive to transform our health care system for our customers, clients, partners and communities," David Cordani, Cigna CEO, said in a statement. "Together, we are establishing a blueprint for personalized, whole person health care, further enhancing our ability to put the customer at the center of all we do by creating a flexible, open and connected model that improves affordability, choice and predictability."
In September, the Department of Justice approved the deal, which some speculate might serve as a template for future healthcare megamergers.
The Cigna-Express Scripts merger followed another major healthcare megamerger, CVS-Aetna, which closed late last month but is still subject to approval from a federal judge.
Thursday's announcement prompted industry players like David Henka, CEO of ActiveRADAR, a healthcare analytics company, to discuss the potential ramifications of the deal.
“The integration of two large companies burns a lot of calories with them integrating their own systems," Henka told HealthLeaders. "Any idea that this merger will translate to lower net costs to plan sponsors or employers doesn’t make financial sense. Merging two large organizations to make a larger organization, with all of the integration that occurs within systems and departments, tends to benefit the merging companies, not the consumer.”
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.