Cigna beat Wall Road estimates for second-quarter revenue on Thursday, helped by energy in its pharmacy profit administration enterprise.
It is without doubt one of the final well being insurers to report quarterly outcomes for the sector, which has been slowed down by persistently excessive medical prices in government-backed plans.
Cigna, nevertheless, is insulated from such price pressures because it lately offered its Medicare enterprise to Well being Care Service Corp. It banks extra on its pharmacy profit administration and business medical health insurance companies.
“Our efficiency within the second quarter displays our disciplined execution and the energy of our enterprise combine,” mentioned CEO David Cordani.
Income from its Evernorth healthcare providers unit, which incorporates Cigna’s pharmacy profit administration enterprise, rose 17% to $57.83 billion in the course of the quarter.
Pharmacy profit managers assist negotiate drug costs and protection with producers on behalf of employers and well being plan shoppers.
PBMs’ enterprise practices, nevertheless, have drawn growing scrutiny lately from U.S. lawmakers seeking to decrease drug costs, state attorneys generals and from the Federal Commerce Fee, which launched a report earlier this yr accusing PBMs of inflating drug prices.
Cigna’s adjusted revenue of $7.20 per share topped analysts’ common estimate of $7.15 per share, in response to information compiled by LSEG.
The corporate maintained its annual adjusted revenue forecast of a minimum of $29.60 per share, whereas analysts count on $29.68 per share.
For the quarter, it reported a medical care ratio — the share of premiums spent on medical care — of 83.2%, up from 82.3% a yr earlier, however according to analysts’ estimate.
The corporate mentioned the rise was resulting from increased stop-loss medical prices. Cease-loss insurance policy assist shield well being plan sponsors, usually an employer, when medical claims move a pre-designated threshold.
—Sneha S Okay, Reuters
