Cigna's Strategic Moves Fuel Profit Growth Amidst Industry Challenges

Cigna reported a strong quarterly performance, driven by specialty drugs and new clients for its pharmacy unit. Despite challenges in the Medicare Advantage market, Cigna expects at least 10% profit growth by 2025 while seeking to streamline its operations and focus on employer-sponsored healthcare.

Cigna announced a projected profit growth of at least 10% for 2025 following a quarterly earnings report that surpassed Wall Street expectations. The improvement was largely due to robust demand for specialty drugs and an expansion of its pharmacy benefit management client base, leading to a 3% rise in share value.

The healthcare giant attributed its success to the greater use of biosimilars, notably cheaper alternatives to AbbVie's Humira, offered at no cost through its Accredo specialty pharmacy. Cigna reported that roughly a third of eligible Humira prescriptions were switched to biosimilars and plans to introduce a biosimilar for Stelara by 2025.

Despite a turbulent Medicare Advantage sector, Cigna is focusing on buybacks and maintaining its medical cost ratio forecast for 2024. With a quarterly income decrease due to investment losses, total revenue still exceeded predictions, with adjusted profits outperforming by 31 cents per share.

(With inputs from agencies.)