Cigna executives said the company is expecting pressure on its margins in the pharmacy segment as it rolls out a new model at Express Scripts and makes a push around client retention.
CEO David Cordani said on the company's earnings call Thursday morning that its pharmacy benefit management division is expecting to feel that pressure over the next two years, but the team believes that the move will leave it better positioned in the long term.
He said investments will back broad re-contracting efforts across its book of business, as well as enhancements to technology and processes. Cordani added that Cigna has also "improved the economic terms" for long-term clients who are feeling the pressure in government programs, a shift that will also likely be a drag on margins.
However, focusing on these investments now has the company poised for the future as these steps "materially future-proof that business for many years to come and are highly responsive to where the market needs to go."
Cordani said that Cigna as a whole is also poised to grow its earnings in 2026 even amid these investments in its pharmacy business.
"To be clear, we expect a sustained and durable growth trajectory over the long term for the business," Cordani said.
The PBM, one of the industry-leading "Big Three," announced earlier this week that it would begin to shift away from the traditional rebate model and instead focus on a pass-through approach, where discounts are made available to the consumer at the pharmacy counter.
Cordani said that the team is excited about the change as it reflects where the industry is moving.
"I’m personally proud of our team’s ability to step back and architect the new model of the future that is fee based, delinked, transparent and has the mechanism to have lowest available price for the consumer at the counter on each transaction," he said. "It’s highly aligned with the regulatory priorities of the day."
The Cigna Group is reaffirming its outlook for the year after posting $1.9 billion in profit for the third quarter.
That's up significantly from the $739 million in profit the company posted in the prior-year quarter, according to its earnings report released Thursday morning. The figure surpassed Wall Street analysts' predictions, per Zacks Investment Research.
The company also beat the Street on revenue, reporting $69.7 billion. Cigna's revenues grew year over year from the third quarter of 2024's haul of $63.7 billion.
Through the first nine months of the year, Cigna posted $202.4 billion in revenue and $4.7 billion in profit. Both figures are pacing ahead of 2024, when Cigna reported $181.5 billion in revenue and $2 billion in profit through three quarters.
"Our strong quarterly results reflect the breadth of our businesses and focused execution on our growth strategy, even in a dynamic environment," said David Cordani, CEO of The Cigna Group, in a press release. "We continue to lead positive change and are addressing some of healthcare's biggest challenges."
On the back of the results, Cigna reaffirmed that it expects to earn at least $29.60 in earnings per share for 2025.
At Cigna Healthcare, the company's insurance arm, revenues were $10.8 billion, reflecting an 18% decline the company attributed in large part to the sale of its Medicare Advantage plans to Health Care Service Corporation. Excluding that deal, revenues were up 6% year over year, Cigna said.
Cigna's medical loss ratio in the quarter was 84.8%, ticking up from a year ago in part due to costs in its individual and family segment and medical costs in stop-loss. Cigna is more insulated from some of the industry trends slamming its peers as it has less exposure to government insurance programs in its member mix.
The insurer reported 18.1 million members as of the third quarter.
At Evernorth, revenue was up 15% year over year to $60.4 billion, per the earnings report. This includes an 18% increase in revenues at its pharmacy benefit management unit, Cigna said.
The company boasted 122.5 million pharmacy members in the third quarter, an increase year over year as well as from the second quarter of 2025.
Editor's note: Updated Oct. 30 at 2:15 p.m. ET.