Insurer Cigna generated roughly $38 billion in revenue in the second quarter of 2019 that includes a major increase due to the merger with pharmacy benefit manager (PBM) Express Scripts.
Overall, Cigna’s pharmacy services business generated $23.5 billion in revenue in the second quarter, a massive increase compared to the $1.1 billion generated in the second quarter of 2018, according to financial results released (PDF) Thursday. The company reported $1.41 billion in net income.
“As Cigna accelerates our focus on whole-person health, our strong second-quarter results reflect the value we deliver to customers and clients, and our consistent execution in a dynamic environment,” said David Cordani, Cigna's CEO. “We continue to invest in innovative, customer-centric solutions to improve affordability and personalization for those we serve.”
The major reason for the spike is to include the membership and resources from the deal for Express Scripts. Cigna completed the $67 billion merger with the PBM giant late last year.
Cigna added that it plans on growing the pharmacy services business more in the second half of the year as the merger takes hold.
"There are a number of different supply chain activities on hold during the time period of the acquisition," said Eric Palmer, executive vice president and chief financial officer on an investor call. "We had good visibility in terms of delivering in the back half of the year."
Cordani added on the call that Cigna is also looking to target health services, such as personalized solutions to stress, as a big cost driver.
"Behavioral and medical services remain uncoordinated," he told investors. "We are addressing costs in coordinated way."
Cigna’s adjusted net income per share for 2019 is projected to be $16.60 to $16.90, a growth of between 17% and 19% compared to 2019, the insurer said. Cigna estimates that it will bring in between $6.34 billion and $6.46 billion in net income this year.