ST. LOUIS - Express Scripts, part of Evernorth and a subsidiary of The Cigna Group (NYSE:CI), has publicly contested the Federal Trade Commission's (FTC) recent actions regarding insulin pricing. Andrea Nelson, Chief Legal Officer of The Cigna Group, criticized the FTC's approach as ungrounded and politically motivated, following a dispute over a July 2024 report by the FTC on pharmacy benefit managers.
Nelson accused the FTC of lacking understanding in drug pricing and claimed that their actions could potentially lead to higher drug prices, adversely affecting consumers and various stakeholders, including employers and federal government entities. Express Scripts has taken a firm stance, intending to defend its practices that aim to reduce drug costs for clients and millions of Americans.
The company highlighted its efforts to cap out-of-pocket costs for insulin at $25 for a 30-day supply since 2019, emphasizing its commitment to making medications affordable. This move by Express Scripts preceded similar government measures to limit insulin costs.
Express Scripts has filed a lawsuit against the FTC, demanding the retraction of what it considers to be a flawed and unsubstantiated report on pharmacy benefit managers. The lawsuit was filed on September 17, 2024, as part of the company's broader effort to protect its drug pricing strategies.
Evernorth Health Services, the overarching brand that includes Express Scripts, focuses on creating pharmacy, care, and benefits solutions to enhance health outcomes. Evernorth is committed to innovation in the healthcare sector, offering services through various affiliates and third-party partners.
The information for this article is based on a press release statement from Express Scripts.
In other recent news, the U.S. Federal Trade Commission (FTC) has filed a lawsuit against major pharmacy benefit managers (PBMs) including UnitedHealth Group Inc (NYSE:UNH)'s Optum, CVS Health Corp (NYSE:CVS)'s CVS Caremark, and Cigna Corp (NYSE:CI)'s Express Scripts, accusing them of manipulating the insulin market. In response, Express Scripts has filed a lawsuit against the FTC, challenging the accuracy of a recent report on the PBM industry. Amid these legal disputes, Cigna Group reported a substantial increase in its second-quarter earnings for 2024, with total revenue of $60.5 billion, marking a 25% growth year-over-year, and adjusted earnings per share of $6.72, a 10% increase. This robust growth was primarily driven by its Evernorth Health Services and Care Services segments.
Financial services company Jefferies maintained a bullish stance on Cigna, raising its price target on the company's shares following discussions with Cigna's CFO and Investor Relations lead. Cigna is also planning to divest its Medicare Advantage business by the first quarter of 2025, demonstrating the company's strategic adaptability. These recent developments reflect Cigna's commitment to delivering value-driven solutions and its confidence in achieving its growth targets.
InvestingPro Insights
In the midst of The Cigna Group's (NYSE:CI) legal contention with the FTC over insulin pricing, the company's financial health and strategic moves are of particular interest to investors. According to InvestingPro data, The Cigna Group boasts a robust market capitalization of $99.6 billion, underscoring its significant presence in the healthcare industry. The company's P/E ratio stands at 27.69, which reflects investor expectations of future earnings growth, particularly relevant as the company navigates through regulatory challenges.
An InvestingPro Tip highlights The Cigna Group's proactive approach to shareholder value, with management aggressively buying back shares, indicating confidence in the company's valuation and future performance. Additionally, The Cigna Group has raised its dividend for three consecutive years, showcasing a commitment to returning value to shareholders—a positive signal for long-term investors.
Investors may also find the company's revenue growth of 16.11% over the last twelve months as of Q1 2023 quite compelling, paired with a strong free cash flow yield, as noted in another InvestingPro Tip. This financial strength may support the company's ability to invest in legal defenses and strategic initiatives to maintain its competitive position in the healthcare market.
For those interested in diving deeper into The Cigna Group's financial metrics and strategic insights, InvestingPro offers additional tips, providing a more comprehensive understanding of the company's financial health and market position.
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