Express Scripts and CIGNA Under Review: U.S. Healthcare Industry Looks to Transform

LONDON, January 31, 2013 /PRNewswire/ --

The healthcare industry is preparing itself for sweeping reforms after the U.S. Supreme Court in June last year upheld President Obama's Affordable Care Act (ACA). The ACA will have a significant impact on all players in the industry from pharmacy benefit managers (PBMs) such as Express Scripts Holding Company (NASDAQ:ESRX) to health insurers such as CIGNA Corp. (NYSE: CI). StockCall has posted technical analysis reports on Express Scripts and CIGNA. Sign up today and access these reports for free at

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Impact on PBMs

Under the ACA, new reporting and regulations will come into effect for Medicare Part D plans and health plans taking part in state exchanges, who have their own PBM or contract with a PBM. However, the transparency requirements are not expected to have any material impact on PBMs. In fact, expanded coverage and launch of biosimilars are expected to benefit PBMs.  

Indeed, PBMs stand to benefit the most from the reforms as they will manage expanded prescription drug insurance for plans sold through health insurance exchanges.

Express Scripts' Cautious Outlook

Although the ACA is likely to benefit PBMs in the long-term, in the near-term, a weak business climate and unemployment outlook remains a concern for PBMs. Back in November, Express Scripts Holding Company had said that the weak business climate and unemployment outlook would likely result in loss of some members, low use rates and higher demands from clients. Register today to download the free report on Express Scripts at

http://www.StockCall.com/ESRX013113.pdf  

For the third quarter of 2012, Express Scripts reported net income of $391.4 million, or $0.47 per share, compared to $324.7 million, or $0.66 per share reported for the same period in the previous year. Sales for the quarter were $27 billion. Back in November, George Paz, Chairman and CEO of Express Scripts, said that despite near-term headwinds and a challenging macroeconomic environment, the company remains confident that it is well-positioned for continued growth.

Express Scripts will release its fourth quarter results on February 18, 2013.

Competition from Costco

Express Scripts, meanwhile, faces increasing competition. Recently, Costco Wholesale Corp. (NASDAQ: COST) launched a pharmacy benefit program for small- and mid-sized businesses. The company will fill prescriptions for business customers.

CIGNA Launches Accountable Care Initiative

Health insurer CIGNA Corp. [Free Research on CI] [1] this week announced the launch of an accountable care initiative in collaboration with Franciscan Alliance. The initiative aims at improving the quality of care for CIGNA customers in the Indianapolis area. Sue Podbielski, President and General Manager for CIGNA in Indiana, said that the new model stresses the new model stresses the value of care over the volume of care and means both organizations will work in collaboration to improve the health and experience of their mutual customers.

CIGNA to Report Q4 Results Next Week

CIGNA, meanwhile, will release its fourth quarter financial results next week. At the time of the release of third quarter results in November, the insurer had raised its outlook. The company expects full year 2012 consolidated adjusted income from operations to be in the range of $1.655 billion to $1.705 billion, or $5.70 per share to $5.90 per share.

David M. Cordani, President and CEO of CIGNA, said in November, that the company continues to make strategic investments to position itself to deliver long-term value for benefit of its customers and shareholders.

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  1. CIGNA Corp. Technical Analysis [ http://www.StockCall.com/CIGNACorp013113.pdf ]

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