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The health-care marketplace in its current form is not sustainable, said Cigna CEO David Cordani.
The health insurer announced Thursday that it planned to acquire pharmacy benefit manager Express Scripts in a $67 billion deal, the latest in a string of health-care deals. Even corporate giants Jeff Bezos of Amazon, Jamie Dimon of J.P. Morgan Chase and Warren Buffett of Berkshire Hathaway are entering the mix, with the three saying they would partner to try and lower health-care costs.
Cordani said he sees their entry as more of an opportunity than a threat.
"Our view is that the current marketplace is not sustainable," Cordani told CNBC on Thursday. "The market demands more affordability, the market demands more personalization, the market demands more value, and whether it's the look of the new (joint venture) between the three organizations you identified or clients and customers wanting more value, we will be well-positioned. The franchise today delivered the best medical cost in the industry in 2017."
Cordani said he's spoken to at least two of the three CEOs in the partnership about their aspirations and Cigna's.
"This combination accelerates our movement to deliver more value," Cordani said. "That's the basic thing. We want to drive change. We're not trying to protect an insurance franchise. We've been driving service expansion, and it's about keeping people healthy and improving clinical quality for when people consume care and as a result, helping employers have healthy, productive, present employees and therefore healthier businesses."
The health-care industry is contracting as companies pursue vertical integration. Drugstore chain and pharmacy benefit manager CVS Health said in December that it would acquire health insurer Aetna for around $69 billion.
Cigna's deal with Express Scripts will combine a health insurer with a pharmacy benefit manager, which negotiates drug prices with manufacturers and administers prescription drug programs on behalf of health insurers, self-insured companies and government agencies.
"We evaluated the marketplace and couldn't be more excited about the move we took to further accelerate our strategy of improving affordability and personalization for customers and clients and driving more choice, great alignment with health-care professionals and more value for everybody," Cordani said.
PBMs have come into the spotlight in the debate over soaring drug prices, with manufacturers accusing them of contributing to inflating costs. UnitedHealthcare said this week it would pass drug rebates onto consumers.