The bulk of Cigna’s $195.3 billion 2023 revenue comes from Evernorth. And Cigna is positioning itself to grow Evernorth even more.
The Cigna Group’s 2023 revenue grew to $195.3 billion, up 8% compared with 2022’s revenue of $180.6 billion. In the fourth quarter of 2023, Cigna’s revenue was up 12%, which company officials said in an earnings call reflects strong growth at both Evernorth Health Services and Cigna Healthcare.
But the bulk of Cigna’s revenue comes from Evernorth, which includes the PBM Express Scripts. Revenue at Evernorth grew 9% to $153.5 billion last year. Evernorth provides health services to health plans, employers, government organizations and health care providers, including pharmacy benefits and specialty and care services.
“This performance extends our track record of delivering consistent positive results in the face of dynamic market conditions,” David M. Cordani, chairman and CEO of The Cigna Group. “The purposeful way we’ve constructed our company continues to build on the strengths of Cigna Healthcare, while also shaping and expanding our Evernorth health services platform to lead the way in addressing evolving needs in the marketplace.”
He called Evernorth foundational to the company’s business and talked about how it has expanded its offerings. For example, in November 2023, Express Scripts’ launched ClearNetwork, which offers employer, health plan, and government employer clients a cost-plus model, paying an estimated acquisition cost for individual medications, in addition to a small markup of no mor than 15% for pharmacy dispensing and service costs.
In a separate program, ClearCareRx, which was introduced in April 2023, the company passes on the costs that Express Scripts pays pharmacies for a prescription, as well as 100% of drug rebates. Express Scripts also agreed to provide more transparency on its spread pricing arrangements.
Eric Palmer, president and CEO of Evernorth Health Services, said during the call ClearC
areRx provides a cost index-based pharmacy network solution with pricing based on independent externally traded costs and disease and a margin that’s shared between Evernorth and dispensing pharmacy.
“We’ve had a lot of good conversations about this program but these programs have a long lead time in terms of terms of implementation,” he said. “Our clients are demanding more for their healthcare dollars, and are looking for ways to improve affordability overall. They are not interested in paying more for the same services.”
Cordani also provided additional information about the company’s recently announced plan to sell its Medicare Advantage, Cigna Supplemental Benefits and Medicare Part D business, as well as CareAllies, its valued-based care company, to Health Care Service Corporation (HCSC) for about $3.7 billion. As part of the agreement, Evernorth will continue to provide pharmacy benefit services to the Medicare businesses. The transaction is expected to close in the first quarter of 2025.
“While we continue to see the seniors’ market as an attractive growth market, we concluded that our Medicare businesses — which did about $4 billion in revenue — would require sustained investments, focus and capital as well as dedicated resources that were disproportionate with their size within the group's portfolio,” Cordani said during the investor’s call.
He said the focus going forward is to expand in the government markets through service offerings rather than with health plans seeing that as a more attractive opportunity. “We're demonstrating a very attractive, proven track record of growing our government reach, but through the service franchise,” he said.
This year, Express Scripts begins providing pharmacy benefits to Centene’s 20 million members. Centene had announced in October 2022 that it had selected Express Script to administer its pharmacy benefits. Centene provides healthcare through commercial plans and government-sponsored plans, including Medicaid and Medicare, TRICARE and the Health Insurance Marketplace.
During the investor call, Palmer also said they are seeing increased interest from clients around several areas, including better point solutions for patients, behavioral health and specialty drugs, including biosimilars.
“There is an opportunity for us to continue to grow as there are more therapies and more choices, as well as navigating through biosimilars and the GLP-1 for weight loss,” Palmer said. “Overall, we’re positioned really well to continue to drive affordability and choice in biosimilars.”