Cigna Open To Selling Pharmacy-Benefit Manager Business (Again)

By Jon Kamp and David Benoit

There has been some chatter lately that Cigna could potentially unload its pharmacy-benefit manager business, a move Cigna considered in 2009.

Speaking at Cowen health-care conference,CEO David Cordani doesnt definitively say one way or the other, but he does say Cigna will remain open to structural alternatives that maximize shareholder value so long as they continue to enable me to deliver our promise to ourclients and customers.

At the same time, he says this is an important business that is well performing based on a variety of measures.

In 2009, there was a rash of consolidation discussions in the pharmacy-benefit manager business including Express Scriptss $4.68 billion deal for health-insurer WellPoints in-house pharmacy-benefit manager operations.

Medco Health, Aetna and Cigna all talked up expectations. Aetna would eventually sign a contract to outsource its operations to CVS Caremark, but Cigna said it was sticking with its business.

Flash forward to 2012 and the industry is again abuzz with consolidation talk as Express Scripts is waiting on regulatory approval for its nearly $30 billion deal for rival Medco Health.

As Cigna closed its deal for medicare insurance company HealthSpring, which outsources its own pharmacy-benefits operations to SXC Health Solutions, speculation rose.

Cordani said investor conferences tend to create a swirl of excitement about the issue and noted the buzz has heated up since HealthSpring was announced.

J.P. Morgan analysts said in a note Monday that a sale of Cignas business would be the best possible outcome for its earnings. They also couldnt rule out Cigna following in Aetnas footprints and outsource its operations given Cigna believes the service is important.

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Cigna Open To Selling Pharmacy-Benefit Manager Business (Again)