{"id":50518,"date":"2023-08-19T13:29:18","date_gmt":"2023-08-19T17:29:18","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/cigna-cvs-health-downgraded-on-competition-in-pharmacy-benefit-manager-business\/"},"modified":"2023-08-19T13:29:20","modified_gmt":"2023-08-19T17:29:20","slug":"cigna-cvs-health-downgraded-on-competition-in-pharmacy-benefit-manager-business","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=50518","title":{"rendered":"Cigna, CVS Health downgraded on competition in pharmacy benefit manager business"},"content":{"rendered":"
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\u00a9 Reuters. <\/span>
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Investing.com — Health care stocks were mixed on Friday after analysts downgraded Cigna and CVS Health citing concerns about competition in the pharmacy benefit manager business.<\/p>\n

Edward Jones cut its ratings for Cigna Corp <\/span><\/span> (NYSE:) and CVS Health Corp (NYSE:) to hold from buy. The move comes after CVS lost part of a contract with insurer Blue Shield of California, which has selected Amazon.com (NASDAQ:) and a collection of other companies to take on the tasks of a pharmacy benefit manager.<\/p>\n

The analysts estimate that Cigna\u2019s pharmacy benefit manager business contributed two-thirds of the insurer\u2019s profit last year, and they noted that while it is just one contract for CVS, Blue Shield of California\u2019s move highlights the growing competitive threat in the business.<\/p>\n

While Blue Shield of California\u2019s multi-player model \u2013 for example Amazon will provide home delivery of drugs, while other companies will manage claims, and another will negotiate prices \u2013 rather than the familiar bundled approach will be complicated to implement. CVS will continue to provide Blue Shield of California with specialty drug services.<\/p>\n

But, the analysts said, the new model could weigh on CVS shares. \u201cThe BCS contract could also encourage customers to be more aggressive in negotiating future PBM contracts with industry players,\u201d they wrote.<\/p>\n

Shares of Cigna closed up 2%, while shares of CVS were flat.<\/p>\n

For Cigna, the analysts pointed to opportunities in MedicareAdvantage and biosimilars, which are generic versions of complex injectable drugs. \u201cThe health insurance market is growing due to the expansion of MA, and we believe Cigna can increase marketshare,\u201d they said.<\/p>\n

As for CVS, the analysts noted that it is also a diverse model, with a retail drugstore business, Aetna health insurance, specialty drug services, and patient care services. That is helping it transform into a one stop shop for health care.<\/p>\n

\u201cOver the long term, this integrated strategy should lead to accelerating earnings growth for the company,\u201d they said.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. Investing.com — Health care stocks were mixed on Friday after analysts downgraded Cigna and CVS Health citing concerns about competition in the pharmacy benefit manager business. Edward Jones cut its ratings for Cigna Corp (NYSE:) and CVS Health Corp (NYSE:) to hold from buy. The move comes after CVS lost part of a […]<\/p>\n","protected":false},"author":1,"featured_media":50519,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-50518","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nCigna, CVS Health downgraded on competition in pharmacy benefit manager business | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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