Cigna is spending $200 million to integrate Express Scripts as Centene's new pharmacy benefit manager for 20 million members starting in 2024.
Company executives told investors Nov. 3 the set up costs will cut into 2023 earnings, but will have a "neutral to a small positive contribution" by 2024.
"This mutually beneficial partnership will bring significant revenue and will be financially accretive over the course of the multiyear contract term," Cigna CFO Brian Evanko said. "You should think of 2023 being a headwind due to the implementation-related costs that are incurred prior to any revenue being received."
Centene publicly awarded its $35 billion PBM contract to Cigna Oct. 25, with implementation expected Jan. 1, 2024. The payer's previous contract was with CVS Caremark.
"Selecting our future PBM partner represents a major value creation plan milestone and positions us to capture significant value for our members, partners, and stakeholders in 2024 and beyond," Centene CEO Sarah London said.
"The strategic collaboration with Centene builds on Express Scripts' track record as a partner of choice and will present growth opportunities to provide additional Evernorth Health services over time," Cigna CEO David Cordani said.