With merger vote approaching, Cigna and Express Scripts diverge on value-based contracts

Cigna is enthusiastic about value-based purchasing. Express Scripts, not so much. (Getty Images/phototechno)

With just three weeks until shareholders vote on their planned merger, Cigna and Express Scripts indicated different visions for value-based contracting on Thursday.

During the company's second-quarter earnings call on Thursday, Cigna President and CEO David Cordani said the Express Scripts acquisition would further the insurer's focus on care-coordination and value-based delivery.

"This includes a meaningful expansion of outcome-based relationships with pharmaceutical manufacturers, where they are rewarded for superior clinical outcomes rather than simply for the consumption of drugs," he said.

Moving away from rebates would benefit "society at large," including individuals, employers, and "the highest performing pharmaceutical manufacturers," Cordani said later in the call.

He noted that Cigna already has some "proof-of-concept" value-based arrangements within its existing PBM, "but they need to be accelerated dramatically because society at large cannot continue to pay at the current level and in the current consumption-based framework."

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Hours later, Express Scripts vice president and chief medical officer Steve Miller, M.D., was far more blasé about the idea.

In its current form, outcomes-based contracting is very complex, and existing systems aren't built for it, Miller lamented at a media briefing. Further, it can take time for medications to appear effective—or ineffective—and patients may switch plans in the middle of taking one, he said.

Certain drugs may also cause side effects that hinder clinical efficacy in the short-term, but cause positive long-term effects, such as keeping patients out of the hospital.

Outcomes-based purchasing is "another lever," Miller said, "not a silver bullet."

RELATED: Express Scripts hits back at criticisms of PBMs, says it 'would do just fine' without drug price rebates

Investor Carl Icahn, who owns a sizable chunk of Cigna, intends to vote against the deal, The Wall Street Journal reported on Wednesday, saying the company would pay too much and the merged company could not keep up with Amazon, which bought the online pharmacy PillPack in June.

Cigna's total revenue reached $11.5 billion by June 30, a 10% rise from the end of Q2 2017. Its Global Health Care and Global Supplemental Benefits segments, especially in Asia, were the primary drivers of this growth, according to a press release.

Paige Minemyer contributed to this story.