Morning Briefing
Summaries of health policy coverage from major news organizations
Cigna's Plan To Buy Express Scripts Is A '$60 Billion Folly' With A 'Ridiculous Price Tag,' Billionaire Investor Warns
The Wall Street Journal: Carl Icahn Publicly Opposes $54 Billion Cigna-Express Scripts Deal
Carl Icahn is going public with his campaign to scuttle Cigna Corp.’s $54 billion plan to buy Express Scripts Holding Co. The billionaire activist investor sent an open letter Tuesday urging fellow Cigna shareholders to vote against the deal, which he calls a “$60 billion folly” carrying a “ridiculous” price tag. The Wall Street Journal reported on the forthcoming letter Monday. “Cigna is dramatically overpaying for a highly challenged Express Scripts that is facing existential risks on several fronts,” Mr. Icahn wrote. (Lombardo, 8/7)
The Hill: Icahn Warns Against Cigna-Express Scripts Merger
Cigna in March said it would pay $52 billion for Express Scripts, a deal on which shareholders will vote Aug. 24. The deal includes $15 billion in debt, bringing the total cost to $67 billion. Express Scripts is the largest independent pharmacy benefit manager (PBM) in the country. PBMs act as intermediaries between drug manufacturers and health insurance plans and their beneficiaries. They negotiate drug rebates and pass the savings on to patients. (Weixel, 8/7)
Bloomberg: Cigna ‘Dramatically Overpaying’ For Express Scripts, Icahn Says
The activist investor filed proxy material with regulators Tuesday soliciting votes against the deal, and to oppose postponing a special shareholder meeting slated for Aug. 24 if the company doesn’t have sufficient support for the transaction. Launching the proxy fight with a little more than two weeks until the vote is an unusual move for the activist. Such campaigns typically kick off months in advance in order to allow sufficient time to solicit other shareholders’ backing. (Deveau and Tracer, 8/7)
In other industry news —
Bloomberg: CVS-Aetna Deal Dodges Antitrust Hurdle That AT&T Faced
CVS Health Corp. has dodged one hurdle in its bid to buy insurer Aetna Inc., as antitrust enforcers don’t see competitive problems that can stem from uniting companies that operate at different levels of a supply chain, according to two people familiar with the matter. That question has hung over the deal since it was announced last year because the Justice Department under President Donald Trump has raised the bar for approving such transactions, which are known as vertical deals because they don’t combine direct competitors. (McLaughlin and Langreth, 8/7)
