Here’s how major health insurers’ stock performed in January 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of Jan. 31, 2022, at $472.57. Humana Inc. had the highest closing stock price among major Medicare insurers at $392.50.

While the cost-saving potential of biosimilars was an overarching theme as the major PBMs’ parent companies discussed second-quarter 2021 earnings, “specialty” was the buzzword during the most recent round of conference calls regarding fourth-quarter and full-year 2021 financial results.

“I would definitely say that the specialty [pharmacy] and home delivery business are contributing to earnings and our margin,” said Heather Cianfrocco, CEO of UnitedHealth Group-owned PBM OptumRx, during a Jan. 19 call with analysts.

Despite Humana Inc.’s recently downgraded Medicare Advantage (MA) enrollment projections for 2022, Wall Street analysts praised the company’s high margins after the insurer reported fourth-quarter and full-year 2021 earnings on Feb. 2.

Humana posted earnings per share (EPS) of $1.24 for the quarter and $20.64 for the full year — both slightly above the company’s expectations — and reaffirmed its previously lowered projection of MA enrollment growth of 150,000 to 200,000 individuals in 2022.

Although Cigna Corp. ended 2021 with earnings that exceeded Wall Street expectations, the company also reported continued struggles with elevated medical costs last year. Further, the insurer disclosed that it expects less Medicare Advantage growth than it originally anticipated in 2022 and a decline in individual/family plan enrollment.

For the fourth quarter of 2021, Cigna reported adjusted earnings per share (EPS) of $4.77, beating the consensus estimate of $4.50. Cigna’s full-year adjusted EPS was $20.47, reflecting year-over-year growth of 11% that the company said was largely driven by the Evernorth health services segment.

As publicly traded Medicare Advantage insurers begin to report fourth-quarter and full-year 2021 earnings, Humana Inc.’s recent disclosure of lower-than-expected individual MA growth for 2022 has raised questions among the investment community around the use of external sales channels and their impact on membership churn. But reports by UnitedHealth Group and Anthem, Inc. in late January seemed to assure investors that Humana’s experience was not reflective of an overall trend, while executives during Humana’s Feb. 2 earnings call vowed that the MA-focused insurer is making every effort to ensure its external partners appropriately convey what members are buying and confirmed its long-term growth outlook.

Health insurer Anthem, Inc., reported solid fourth-quarter results on Jan. 26, with some numbers in line with expectations and others hitting above or below expectations. The company also indicated it’s bracing for medical costs to rise above normal levels this year amid the ongoing COVID-19 crisis — though perhaps not as much as in 2021.

Anthem reported $5.14 in adjusted earnings per share (EPS) for the quarter, beating the consensus of $5.11. “EPS appears to be aided by better-than-expected investment income to the tune of $0.42, which grew $23% [year over year],” Jefferies analyst David Windley wrote in a Jan. 26 note to investors.

The price of the average brand-name drug has increased by 18.3% annually on average over the last five years, according to research firm GlobalData. Floriane Reinaud, research and analysis director at GlobalData, said in a statement that this price growth is unique to the U.S. “While drug list prices have only been increasing in the US, major markets in the rest of the world are seeing declines. Japan, for example, saw drug prices decline by more than 9% while Germany declined by around 7.5%,” Reinaud said.

The business strength of “speculative grade” pharmaceutical companies varies considerably, mainly due to differences in their produce concentration and drug development pipelines, according to S&P Global Data. S&P analysts Patrick Bell and David A. Kaplan also wrote that “although speculative-grade companies are frequently more aggressive in pricing and life cycle management strategies, legislators and the media primarily focus criticism on well-known investment-grade peers and their more widely prescribed blockbuster drugs. Similarly, we believe pharmacy benefit managers place more attention on controlling spending on blockbuster drugs than those with narrower patient bases such as orphan drugs. Nevertheless, with a higher proportion of revenues generated in the U.S. and higher leverage, we believe drug price reform could hurt speculative-grade pharma companies disproportionately.”

For health insurers, the new year has ushered in a mandate to cover at-home COVID-19 tests and a highly transmissible coronavirus variant that is making it clear the pandemic is far from over. During its recent conference call to discuss fourth-quarter 2021 financial results, UnitedHealth Group explained how its massive, integrated health care enterprise is responding to both challenges.

The Biden administration on Jan. 10 unveiled new guidance specifying that all group and individual health plans must reimburse members for eight free over-the-counter COVID tests per month without cost sharing. The administration also said it would allow insurers to cap test costs at $12 each if insurers set up in-network agreements with pharmacies/retail stores that allow members to access free tests directly, without filing for reimbursement.

Providing its first glimpse of earnings for 2022, UnitedHealth Group at its Nov. 30 Investor Conference said it expects to achieve revenue in the range of $317 billion to $320 billion and adjusted net earnings per share (EPS) of $21.10 to $21.60. Its UnitedHealthcare division is expected to contribute $245.5 billion to $247.5 billion, driven in part by the anticipated addition of 600,000 to 650,000 net new Medicare Advantage members, reflecting year-over-year growth of 9% to 10%.