Cigna Buying Express Scripts : Shots - Health News The proposed merger is the latest in a string of big health care business combinations, as companies within the industry look for leverage and savings.

Health Insurer Cigna To Pay $67 Billion For Express Scripts

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ARI SHAPIRO, HOST:

I'm Ari Shapiro with news of big mergers in the health care industry. The giant insurance company Cigna is buying Express Scripts, which administers prescription drug insurance plans for millions of Americans. That deal is worth $67 billion. And it comes just about three months after CVS said it plans to buy Aetna. This is part of a wave of mergers that could change how health care is delivered and paid for. So we're going to talk about what's happening with NPR health policy correspondent Alison Kodjak. Hi, Alison.

ALISON KODJAK, BYLINE: Hey, Ari.

SHAPIRO: Cigna plus Express Scripts equals what? What does this combined company look like?

KODJAK: Well, like, to get it really basic, Cigna's an insurance company. So it pays for your doctor's appointments, your hospital visits, your lab tests. And Express Scripts is what's called a pharmacy benefit manager. And so they take care of your prescription drug insurance. So the key here is that the companies don't do the same thing. So when they merge - if it's approved - they're going to offer a different services - a larger bunch of services in one company. And so at least experts who worry about things like antitrust say this probably won't face the antitrust problems that a couple of years ago when big insurance companies tried to merge did.

SHAPIRO: So if this merger does go through, and the CVS-Aetna merger also goes through, you're going to have these much bigger, more integrated companies. What will that mean for health care consumers?

KODJAK: Well, a lot of people say, you know, it could be really good for consumers. Of course, there are a lot of caveats. You know, we don't know how it's going to play out and exactly what they're going to do with this big powerful company. But some of the experts I talked to say they could work because it makes the interests of the insurer align with the interest of the people who pay for your prescription drugs. And so they both want to spend less money. And to do that, they really have to keep you healthier. So by putting them together, it could be better for patients.

SHAPIRO: Can you give us an example?

KODJAK: Yeah. One of the ones that somebody told me, which made a lot of sense, is insulin. So there are a lot of insulin products out there. Some are much more expensive than others. And so if you're just paying for the drug, you might want to go for the cheapest insulin. But that can be more convenient. It can work for less time. You need to have more doses. Whereas a more expensive insulin might be easier to use, so people will actually be more adherent. They'll use their medication.

SHAPIRO: To keep them healthier in the long run.

KODJAK: And that will avoid expensive hospital visits. So if they both the companies together, they both want to avoid the expensive hospital visit. So they might cover the more expensive insulin.

SHAPIRO: OK. So that might make people healthier and cut costs. What other positive consequences might you see from this?

KODJAK: Well, I talked to the CEO of Jefferson Health in Philadelphia. They run a bunch of hospitals. And he is really happy with this because it gets rid of a whole layer of middlemen in the industry. Right now, the pharmacy benefit managers in the middle, they take off a share for their own profit. This could both simplify and perhaps cut costs for companies as well.

SHAPIRO: OK, so what are the negative possible problems of this?

KODJAK: Well, when you talk to consumer advocates, they always are worried when huge companies combine. These industries are already pretty concentrated. There are only three pharmacy benefit managers right now that control 75 percent of the prescription market. So these consumer advocates worry that, as these companies get bigger, they're going to see their profit potential go higher rather than want to cut costs for consumers. So that's a concern.

SHAPIRO: And we also, by way of disclosure, just need to say that Cigna is an NPR underwriter. NPR's Alison Kodjak. Thanks a lot, Alison.

KODJAK: Thanks, Ari.

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