Publicly Traded Insurers Tout Pharmacy Divisions

Although the fourth quarter of 2020 brought financial challenges for some health insurers due to surging coronavirus infections, the pharmacy-focused divisions of those publicly traded firms seemed to provide a universal bright spot.

Cigna Corp. saw its stock prices slide after its fourth-quarter earnings came in below Wall Street’s expectations, but for its health services segment Evernorth — which houses its PBM — full-year 2020 adjusted revenues increased 20% compared with 2019, reaching $30.5 billion. Those results were driven by “ongoing strong retention, the completion of insourcing Cigna volumes and organic growth, including our partnership with Prime Therapeutics,” Cigna CEO David Cordani said during the company’s earnings conference call.

In 2021, Cigna expects Evernorth to deliver full-year adjusted earnings of at least $5.6 billion, representing year-over-year growth of at least 4%, Chief Financial Officer Brian Evanko said.
During Humana Inc.’s earnings call, CEO Bruce Broussard noted that the insurer’s Healthcare Services business “delivered double-digit percentage growth in adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] year-over-year in 2020, with our pharmacy, provider and home business all performing well.” Overall in the fourth quarter, Humana reported an adjusted $2.30 per share loss.

Humana’s pharmacy business processed 478 million prescriptions in 2020 and “drove mail-order penetration of over 37%” in Medicare Advantage Prescription Drug plans, Broussard said.

Centene Lauds Specialty Holdings

Executives at Centene Corp. — which reported a $12 million fourth-quarter earnings loss due partially to rising COVID-related costs — said during the company’s earnings conference call that its pharmacy-related holdings will be a key part of the insurer’s diversification strategy going forward.

Centene recently acquired PANTHERx Rare, LLC, a specialty pharmacy company that focuses on orphan drugs and treatments for rare diseases. Plus, its recent proposed purchase of Magellan Health, Inc. will deliver 2 million PBM members and 16 million medical pharmacy lives to Centene.

Anthem, Inc. credited “pharmacy product revenue” from IngenioRx with helping drive a 16.2% year-over-year increase in operating revenue for the fourth quarter of 2020. The company’s PBM segment saw an operating gain of $363 million in the fourth quarter of 2020, Anthem said in its earnings release.

UnitedHealth Group, which owns the PBM OptumRx, reported fourth-quarter revenues of $22.5 million for that business segment, up from $19.1 million in the prior-year period. OptumRx’s full-year 2020 revenues also increased compared to 2019, going from $74.3 million to $87.5 million.

© 2024 MMIT
Leslie Small

Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.

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