Cigna-Express Scripts merger gets Justice Department approval
Federal antitrust authorities have given a green light to Cigna’s $52 billion takeover of pharmacy benefit manager Express Scripts, the two companies announced Monday.
The merged company could reshape the health industry, as Cigna would encompass both health insurance and pharmacy benefits. The companies said they anticipate closing the deal by the end of the calendar year.
The merger still needs to be approved by by state regulators, but the federal review was the largest hurdle the company needed to overcome.
The two companies say they could save money if they coordinated care with prescriptions, but they have not gone into specifics about how the merger would help lower costs for patients or employers.
“We are pleased that the Department of Justice has cleared our transaction and that we are another step closer to completing our merger and delivering greater affordability, choice and predictability to our customers and clients as a combined company,” David Cordani, Cigna’s president and CEO, said in a statement.
The Department of Justice approval is also likely good news for the merger of CVS and Aetna, the other major health deal currently under federal review.
Express Scripts is the largest independent pharmacy benefit manager (PBM) in the country. PBMs act as intermediaries between drug manufacturers and health insurance plans and their beneficiaries. They negotiate drug rebates and pass the savings on to patients.
PBMs have come under fire from both the drug industry and President Trump, and the administration is considering completely eliminating the current rebate system as a way to bring down the cost of prescription drugs.
In a statement, the DOJ said merging Cigna and Express Scripts would not hurt competition or consumers.