Cigna's CEO told us how his company's $67 billion deal for Express Scripts represents a 'evolution in the marketplace' in healthcare

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Cigna's CEO told us how his company's $67 billion deal for Express Scripts represents a 'evolution in the marketplace' in healthcare

Cigna CEO David Cordani

David Grogan / CNBC

Cigna CEO David Cordani speaking at CNBC's Healthy Returns conference on March 28.

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  • Cigna in March said it plans to acquire Express Scripts in a deal that ends the days of a standalone pharmacy benefit manager, a company that negotiates drug costs.
  • Cigna CEO David Cordani in an interview later in the month said that the move is part of an "evolution in the marketplace."
  • Cordani said the acquisition will help the company better integrate to work with healthcare providers and patients.

Health insurers are starting to own doctors offices. Hospitals are getting into the drug business. An insurer is buying one of the largest standalone pharma middlemen, and retail giant Walmart might be buying health insurer Humana.

The new combinations are starting to blur the lines of what constitutes a healthcare company at a time when the companies responsible for paying for healthcare expenses - like insurers - are feeling the effects of new procedures and innovative medications coming into the market with high price tags. To counter that, they've been consolidating, in part hoping that it will give them more of that leverage.

Cigna is one of the companies taking part in this blurring of company lines, with its $67 billion bid for Express Scripts, a pharmacy benefit manager, or company that negotiates drug costs.

To Cigna CEO David Cordani, some things are coming into focus as the healthcare system keeps evolving into new companies. Here's how he put it in an interview with Business Insider:

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"You start with the individual, people find themselves in a variety of categories at any given point in time. You're either healthy, you're healthy at risk, you're confronting a chronic condition or an acute condition, and how you're able to have the products, programs and services to help an individual as we like to say along their life and health journey. That's what we believe the evolution of the marketplace is: PBM, health insurers, health service companies, or otherwise."

In other words, people think of themselves based on their health status, and interact with the healthcare system as such. They're not thinking about a PBM in a different way than they do their health insurer and potentially the person providing them with care. They just want to feel better.

Ideally, combining a PBM with an insurer will help make that experience simpler and lead to better care in the end.

"One of the things we're most excited about with our combination with Express Scripts is the ability to further integrate the capabilities between the two organizations and work more closely with the physician or healthcare professional and the pharmaceutical manufacturer to align incentives and align access around the clinical outcomes as opposed to just the volume of services that are consumed," Cordani said.

So instead of simply paying for care on a prescription-by-prescription basis, the combined companies might be able to instead think of alternatives that could lead to better health in the long run - something known as value-based care.

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