The deal, valued at $67 billion, including debt, combines a health insurer with a pharmacy benefits manager, a firm that negotiates drug prices. It's a type of partnership that has become more common in an industry that's shedding traditionally rigid distinctions.
UnitedHealth Group already has an in-house PBM: Optum Rx. Anthem said it would start its own in 2020 through a partnership with CVS Health called IngenioRx. CVS shattered expectations for what vertical integration would look like when it announced in December it would acquire Aetna in a $69 billion transaction.
True, the deal combines a PBM, CVS Caremark, and a health insurer Aetna, but it was unique in that it infused drugstores into the mix. The premise includes caring for people in CVS' retail stores instead of more expensive options like hospitals and therefore lowering the combined company's costs.
It's a strategic deal that may have changed people's expectations for others.
"(Cigna buying Express Scripts) is not too out of left field, and in this day and age, expectations are innovative and strategically surprising deals. This doesn't check that box necessarily," said Jefferies analyst Brian Tanquilut.
Since the CVS-Aetna deal was announced, grocer Albertsons said it would acquire drugstore chain Rite Aid last month. Pharmacy retailer Walgreens Boots Alliance was reportedly considering buying the rest of the wholesale drug distributor AmerisourceBergen it doesn't already done until talks cooled. Talk of the combination didn't impress investors.
Cigna buying Express Scripts might not lower the cost of care, but it could smooth out some of the bumpiness in the system and increase price transparency, said Gurpreet Singh, U.S. health services advisory leader at PwC.
For insurance companies, PBMs are "a bit of black box," Singh said, so combining them opens that up and can allow them to make choices around benefits.
"I think it's consistent with where the market is headed and where we see the health ecosystem," he said. "It's absolutely consistent, and what's different and more specific here is the opportunity around pricing transparency."
Cigna CEO David Cordani, who will lead the combined company, told CNBC's "Squawk on the Street" he's committed to transparency and improving affordability. He said discussions started in the fourth quarter of last year.
Shares of Cigna slid more than 11 percent on Thursday, while Express Scripts' stock gained about 9 percent.