Anthem, Cigna, HCA post revenue gains in Q4, anticipate growth from acquisitions

TAKEAWAY Anthem will launch its in-house pharmacy benefit manager, IngenioRx, in the second quarter of 2019, nine months earlier than planned. Anthem will exercise its right to terminate its current PBM contract with Express Scripts on March 1 before it expires at year-end, due to Cigna Corp.’s acquisition of Express Scripts late last year. It will then begin transitioning its plan members to the new PBM over 12 months. Anthem said it expects IngenioRx, which was initially slated to launch in 2020, to produce gross annual pharmaceutical savings of more than $4 billion, with at least 80% of those savings falling to its customers in the form of lower healthcare costs and 20% falling to shareholders.

TAKEAWAY Cigna reported higher revenue and lower profit in the fourth quarter of 2018—the first quarter when the health insurer’s financial results reflected some contribution from its newly acquired pharmacy benefit manager, Express Scripts. Cigna CEO David Cordani said HHS’ proposal last week to eliminate drug rebates that PBMs negotiate from pharmaceutical companies for Medicare Part D and managed Medicaid customers would “not have a meaningful impact on our growth or earnings trajectory” but does offer opportunity to strike up more value-based care programs with drugmakers.

TAKEAWAY HCA Healthcare breezed past most analysts’ expectations in the fourth quarter of 2018, and the investor-owned hospital chain’s acquisition of Mission Health, which closed Feb. 1, will deliver an additional boost in 2019. HCA Chief Financial Officer Bill Rutherford said on an earnings call that the company projects about 3 percentage points of its anticipated earnings growth in 2019 will come from acquisitions, with 2 percentage points coming from deals that closed in 2017 and 2018, and the rest from Mission Health. Another 5 percentage points are expected to come from same-facility growth.