Health insurer Cigna's announced move to buy pharmacy benefit manager Express Scripts may have just narrowed Amazon's entry into healthcare, CNBC reports. The source explains that so-called PBMs, such as Express Scripts, negotiate drug benefits for insurance plans and employers.
On March 8, “Cigna agreed to buy Express Scripts in a...cash-and-stock deal....If Amazon founder Jeff Bezos ever wanted to get into the health insurance industry, ‘the target that would have made sense for them is Cigna.'"
"There was some speculation that Express Scripts could play a role in the healthcare venture being put together by Amazon's Bezos, Berkshire Hathaway's Warren Buffett and J.P. Morgan's Jamie Dimon. The three corporate titans are aiming to cut health costs for their employees by using their companies' sheer sizes as leverage to get more favorable pricing," CNBC reports.
"David Cordani, CEO of Cigna, said, 'It is possible that the threat of an Amazon entry into the healthcare and possibly the drug supply chain landscape—with the latest news of the Amazon-Berkshire Hathaway-J.P. Morgan employer coalition—has spurred Cigna and Express Scripts to tie the knot.'"
'The merger ultimately comes down to whether the government believes the deal saves money for the American consumer.'
Does the Cigna–Express Scripts deal make sense? Do you think the merger—a move that follows a trend in the healthcare industry of companies acquiring assets that do not directly overlap operations—will lower healthcare costs for Americans or change the industry for the better? Leave your thoughts below, and read more on the coverage here.