We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cigna (CI) to Add Three Biosimilars to NPF, Enable Cost Savings
Read MoreHide Full Article
The pharmacy benefits management ("PBM") unit of The Cigna Group's (CI - Free Report) Evernorth segment, Express Scripts, recently revealed plans to include three biosimilars within the preferred product list on its National Preferred Formulary ("NPF").
Among the three, two of the biosimilars, Hyrimoz and Adalimumab-adaz, are manufactured by Sandoz, the generic division of the famous Swiss pharmaceutical firm Novartis (NVS - Free Report) . The third biosimilar, Cyltezo, is the first interchangeable biosimilar with HUMIRA and is developed by the German-based drugmaker Boehringer Ingelheim.
The FDA-approved biosimilars are competitive substitutes for HUMIRA as they are comparatively more affordable and have proved to be clinically effective in treating inflammatory conditions.
Thereby, the introduction of more cost-effective biosimilars for inflammatory conditions is a dire need and the information furnished by Express Scripts trend data underlines the reason. The costs of inflammatory medications made up for around 25% of the overall drug spending in the commercial book of business of Express Scripts last year.
The advent of varied biosimilars means increased competition in the industry, which often reduces prices and paves the way for enhanced access and choice of treatment for patients. Per Evernorth, competition created among biosimilars is forecasted to create savings between $225 billion and $375 billion for the U.S. healthcare system with regard to total pharmacy expenditures over the next decade.
The role of a pharmacy benefit manager like Express Scripts is to work out rebates and fees with drug manufacturers and develop formularies for medications that are covered by insurance. The addition of cost-effective and clinically-effective biosimilars within NPF reflects Cigna’s focus to generate cost savings for its clients. The same is also likely to attract more customers in buying prescription medications from the pharmacy network of CI, which in turn, might boost its pharmacy revenues.
Pharmacy revenues contribute a massive chunk to Cigna’s revenues and the contribution stood at 71.2% for 2022. Cigna boasts an expansive pharmacy network across the United States. On an annual basis, Express Scripts Pharmacy distributes roughly 1.6 billion adjusted prescriptions to pharmacy plan members that are managed by Express Scripts PBM. In fact, CI acquired Express Scripts back in 2018 in order to add strength to its pharmacy business.
Shares of Cigna have gained 6.8% in the past three months against the industry’s 11.2% decline. CI currently carries a Zacks Rank #3 (Hold).
Encompass Health’s earnings surpassed estimates in two of the last four quarters and missed the mark twice, the average surprise being 4.88%. The Zacks Consensus Estimate for EHC’s 2023 earnings indicates a 11.9% rise from the year-ago actuals. The consensus mark for EHC’s 2023 earnings has moved 1.3% north in the past 60 days.
The bottom line of DexCom outpaced estimates in three of the trailing four quarters and matched the mark once, the average surprise being 15.19%. The Zacks Consensus Estimate for DXCM’s 2023 earnings indicates a 23% rise, while the same for revenues suggests an improvement of 20.1% from the respective year-ago actuals. The consensus mark for DXCM’s 2023 earnings has moved 0.9% north in the past 30 days.
Shares of Encompass Health and DexCom have gained 7.9% and 13.8%, respectively, in the past three months.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Cigna (CI) to Add Three Biosimilars to NPF, Enable Cost Savings
The pharmacy benefits management ("PBM") unit of The Cigna Group's (CI - Free Report) Evernorth segment, Express Scripts, recently revealed plans to include three biosimilars within the preferred product list on its National Preferred Formulary ("NPF").
Among the three, two of the biosimilars, Hyrimoz and Adalimumab-adaz, are manufactured by Sandoz, the generic division of the famous Swiss pharmaceutical firm Novartis (NVS - Free Report) . The third biosimilar, Cyltezo, is the first interchangeable biosimilar with HUMIRA and is developed by the German-based drugmaker Boehringer Ingelheim.
The FDA-approved biosimilars are competitive substitutes for HUMIRA as they are comparatively more affordable and have proved to be clinically effective in treating inflammatory conditions.
Thereby, the introduction of more cost-effective biosimilars for inflammatory conditions is a dire need and the information furnished by Express Scripts trend data underlines the reason. The costs of inflammatory medications made up for around 25% of the overall drug spending in the commercial book of business of Express Scripts last year.
The advent of varied biosimilars means increased competition in the industry, which often reduces prices and paves the way for enhanced access and choice of treatment for patients. Per Evernorth, competition created among biosimilars is forecasted to create savings between $225 billion and $375 billion for the U.S. healthcare system with regard to total pharmacy expenditures over the next decade.
The role of a pharmacy benefit manager like Express Scripts is to work out rebates and fees with drug manufacturers and develop formularies for medications that are covered by insurance. The addition of cost-effective and clinically-effective biosimilars within NPF reflects Cigna’s focus to generate cost savings for its clients. The same is also likely to attract more customers in buying prescription medications from the pharmacy network of CI, which in turn, might boost its pharmacy revenues.
Pharmacy revenues contribute a massive chunk to Cigna’s revenues and the contribution stood at 71.2% for 2022. Cigna boasts an expansive pharmacy network across the United States. On an annual basis, Express Scripts Pharmacy distributes roughly 1.6 billion adjusted prescriptions to pharmacy plan members that are managed by Express Scripts PBM. In fact, CI acquired Express Scripts back in 2018 in order to add strength to its pharmacy business.
Shares of Cigna have gained 6.8% in the past three months against the industry’s 11.2% decline. CI currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the Medical space are Encompass Health Corporation (EHC - Free Report) and DexCom, Inc. (DXCM - Free Report) . While Encompass Health currently sports a Zacks Rank #1 (Strong Buy), DexCom carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Encompass Health’s earnings surpassed estimates in two of the last four quarters and missed the mark twice, the average surprise being 4.88%. The Zacks Consensus Estimate for EHC’s 2023 earnings indicates a 11.9% rise from the year-ago actuals. The consensus mark for EHC’s 2023 earnings has moved 1.3% north in the past 60 days.
The bottom line of DexCom outpaced estimates in three of the trailing four quarters and matched the mark once, the average surprise being 15.19%. The Zacks Consensus Estimate for DXCM’s 2023 earnings indicates a 23% rise, while the same for revenues suggests an improvement of 20.1% from the respective year-ago actuals. The consensus mark for DXCM’s 2023 earnings has moved 0.9% north in the past 30 days.
Shares of Encompass Health and DexCom have gained 7.9% and 13.8%, respectively, in the past three months.