DOJ Green Lights Cigna and Express Scripts Merger

The Department of Justice (DOJ) has approved the merger between Cigna, one of the nation’s largest insurers, and Express Scripts, a major pharmacy benefit manager.

Cigna and Express Scripts announced their intent to merge March 2018. Cigna proposed to acquire Express Scripts in a cash and stock deal valued at approximately $67 billion, with Cigna assuming $15 billion in Express Scripts debt. Cigna agreed to pay $48.75 in cash and 0.2434 shares of combined company stock for each Express Scripts share.

In the statement announcing the DOJ’s approval, Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice said, “Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to U.S. consumers. After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and [Express Scripts Holding Company], a pharmacy benefit management (“PBM”) company, is unlikely to result in harm to competition or consumers.”

The Antitrust Division received over two million documents, analyzed transactional data from both companies, and interviewed over 100 industry experts in connection with its six-month investigation.

The Antitrust Division concluded that the merger is unlikely to lessen competition because Cigna only has a small PBM business. It also noted that Cigna intended to use Express Scripts for PBM services and that Cigna’s current PBM services provider would be free to compete for PBM customers that purchase insurance through Cigna.

David M. Cordani, president and chief executive officer of Cigna, stated, “We are pleased that the Department of Justice has cleared our transaction and that we are another step closer to completing our merger and delivering greater affordability, choice and predictability to our customers and clients as a combined company … The value that we deliver together will help put our society on a far more sustainable path—one that helps health care professionals close gaps in care and supports our customers along their health journey.”