Reforms to the pharmacy benefit management industry continue to be a key topic of interest on Capitol Hill, and the top brass at Cigna expect to weather eventual policy changes.
Chief Operating Officer Brian Evanko spoke at the Morgan Stanley Global Healthcare Conference Wednesday morning. The Cigna Group operates Express Scripts, one of the three largest PBMs.
Evanko said there is room for the industry to evolve, but the company ultimately believes its business model will be "durable" as clients sign on with Express Scripts for its focus on affordability, clinical programs that promote safety and benefits administration services.
"We don't try to protect the status quo as it relates to our business," he said. "We’re engaging constructively with lawmakers in D.C. and the states. We believe it will be manageable for us ultimately as long as those three value creation levers aren’t compromised."
He added that regulators and policymakers have a "moving target" for their focus, and, as the company has more of its attention on the commercial market, changes centered in the government arena pose less of a hurdle.
During the session, the executives were asked specifically about most-favored nation policies as well as direct-to-consumer sales programs for pharmaceuticals. Evanko said that for both of these ideas, the "specific details really do matter."
For MFN, for instance, the logic behind putting the U.S. on an even playing field with other nations makes sense, he said. But in engaging with policymakers on the topic, the details get a bit fuzzier. He added that there is still plenty to discuss about the broader market impacts and how competitors could respond to these changes if they are indeed implemented.
"The spirit behind most favored nation makes all the sense in the world," Evanko said. "The implications of that ultimately are still a little bit unclear to us."
As for direct-to-consumer models, Evanko said the discussion changes depending on the product in question. For more common prescriptions, a DTC approach may make sense if the price is right. However, with more expensive and complex specialty drugs, those models won't work as well.
For a $20,000 injectable or even the ultrahigh-cost therapies—such as a multimillion-dollar gene therapy—the pricing equation for the consumer is far more difficult, he said. For lower-cost drugs or generics, though, Express Scripts and Evernorth have the capabilities within their platform to keep up.
"The financing of those [high-cost drugs] is where the challenge starts to really come in," he said. "You could see maybe the models growing a little bit on the lower-cost, generic side.
In addition to the policy discussion, Evanko touched on Cigna's recent decision to invest in Shields Health Solutions, the largest provider of specialty pharmacy services to hospitals and health systems. Shields was previously a part of the Walgreens umbrella before it was spun out by owner Sycamore Partners.
Cigna announced a $3.5 billion investment in Shields through Evernorth. Evanko said that Cigna has a strong presence in the consumer-facing specialty pharmacy space in its Accredo unit but was less established in provider market. Investing in Shields bolsters that broader array of specialty pharmacy solutions, he said.
Evanko said this a "high-growth" part of the market, but, in addition, it represents a space where "the health systems really need help."
"It made a ton of sense for us," Evanko said. "Quite honestly, a no-brainer strategically."