Cigna CEO David Cordani advised CNBC on Wednesday he’s “dissatisfied” activist investor Carl Icahn aired his considerations in regards to the well being insurer’s acquisition of Categorical Scripts in an open letter as an alternative of sharing them with Cigna.
Icahn printed a searing letter Tuesday opposing Cigna’s $54 billion acquisition of pharmacy profit supervisor Categorical Scripts. Titled “Cigna’s $60 billion folly,” Icahn mentioned shopping for the corporate “might nicely grow to be one of many worst blunders in company historical past.”
“We’re dissatisfied that he selected that, his technique of communication was an open letter,” Cordani advised CNBC’s “Squawk on the Avenue.” “There’s been no inbound [communication] to our company.”
Cigna says it and Categorical Scripts are complementary companies that when mixed can enhance look after sufferers and decrease health-care prices. Icahn argues looming regulatory threat mixed with the potential of Amazon disrupting the trade pose “existential threats to the PBM enterprise mannequin.”
Pharmacy profit managers management which medicine are coated and negotiate reductions, referred to as rebates, on branded medicine with producers. They are a favourite goal of drugmakers, who say these middlemen need greater drug costs to allow them to squeeze greater income from rebates.
The Trump administration has vowed to re-examine this technique. President Donald Trump spent a big chunk of his speech saying his blueprint to decrease drug costs attacking middlemen, who he mentioned “will not be so wealthy anymore.” Pfizer CEO Ian Learn final week advised Wall Avenue analysts he believes the Trump administration might remove rebates altogether.
Amazon doesn’t presently function within the prescription drug profit area, although earlier this yr it mentioned it will purchase on-line pharmacy start-up PillPack.
“Because it pertains to Amazon, it is one other instance of change and evolution,” Cordani mentioned. “They’re getting into the mail order pharmaceutical success. We see that motion, clearly we anticipated that motion. The scientific integration, we expect, is the purpose of differentiation.”
Rival well being insurer Aetna is within the strategy of being acquired by CVS Well being. The roughly $69 billion deal would create a health-care powerhouse, combining insurance coverage, prescription drug advantages and drugstores. Shareholders from each corporations have already permitted the deal, and CVS mentioned Wednesday it expects it to shut within the late third quarter or early fourth quarter.
“We’re dedicated to this actually enticing strategic and monetary mixture,” Cordani mentioned.
Supply hyperlink – https://www.cnbc.com/2018/08/08/cigna-ceo-david-cordani-on-carl-icahn-opposing-express-scripts-deal.html