CI - Earnings call transcript Q2 2024

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Operator

Ladies and gentlemen, thank you for standing by for the Cigna Group Second Quarter 2024 Results Review. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. We'll begin by turning the call over to Ralph Giacobbe. Please go ahead.

Ralph Giacobbe

Thank you. everyone. morning, Good today's joining Thanks call. for I'm Ralph of Relations. Vice Senior President Investor Giacobbe, of and of Services. Palmer, Chief this on David Evernorth Chief Officer; Financial and Health me the morning and Chairman Cigna Executive Group Officer President Chief Evanko, Eric With Executive Officer line Healthcare; Brian Chief and Group's are the and Cigna Cigna President Cordani, of the Executive Officer

will and cover second In financial a of and our remarks our results today, topics, XXXX. quarter for Brian financial our David outlook including number

their remarks, available Following prepared Eric David, will for Brian be and Q&A.

when As accepted our operations noted in in otherwise known the determined in our earnings measures, not income are results, release, financial use United from States, including accordance which adjusted GAAP. describing certain as with generally we principles revenues, adjusted and financial accounting

to making same materially regarding forward-looking are Investor our basis of be of release, earnings measures reconciliation performance. income net in statements, total A differ directly most per measures is current term our and risks cignagroup.com. and performance. to the the subject labeled cause which share measures, remarks income XXXX posted section today's these will results we from including comparable could from principal In statements and is adjusted for actual our today, adjusted statements shareholders outlook financial future as GAAP the operations We use some revenues, Relations contained earnings These expectations. of the respectively, on the and to that in uncertainties our

reports and note these in is SEC. to release earnings the filed of in the uncertainties cautionary and risks description with A our most recent today's contained

$XX included in charge quarter, per our net special are quarterly results of supplement. items after-tax the of an we in our recorded or second Details share. $X.XX financial item special the million Regarding

the potential prospective a Additionally, we impact XXXX outlook, anticipated including includes financial repurchases share so basis will full on do please future will that performance, regarding and we year that note dividends. comments make our XXXX of

David. that, with And to over call I'll turn the

David Cordani

Good thank Ralph. call everyone, and today. for you morning, our joining Thanks,

strong strategic to For our on how our key delivered momentum. again the second drivers is our quarter, as I'll we durable nature demonstrate additional Then and your our the of of Today, build and discuss success. growth, and the we rest strength outlook performance quarter our of details to performance for model the we'll will and for fueling our review year, Brian questions. the our results move on continue

started. let's So get

revenue that adjusted report in to and an We second of medications ensuring positive the need proud health pleased total get earnings quarter, support billion for focus $XX.X cost Cigna on I'm care they get decisions delivered their share I'm For get of the per and and continuing and dynamic Group affordable serve, environment, overall they about of to to team at make those their order $X.XX. a that need, in results the our these to vitality. the of best we they the achieved

mission. our requires to execution a focus this disciplined of innovation, passionate relentless a on and All commitment

as clients vitality. of and the health the care and Evernorth growth help improve services our which market-leading as quarter, and our distribution with programs Within specialty businesses, capabilities. businesses pharmaceuticals strength and Service provides I'll specialty accelerated of clinical specialty with specialty pharmacy During drugs Health our to start diseases, continued rare complex for demonstrated Evernorth, well benefit treatment

business, to we our also income We for of our continue growth Accredo's services makes change quarter saw the our strong space. invest continued demand adjusted with our represent year-over-year, in growth XX% by opportunity In as in offerings impact. Biosimilars, example, and well growth secular while us differentiated Accredo, our the broadening and in tailwinds continued force reflecting expanding as substantial for the fueled leader reach. strength continues for market growing a which to and a be specialty

dispensing June, our for of we HUMIRA. end the interchangeable At biosimilar began

program these savings, out-of-pocket Evernorth have produce Our has them, with we manufacturers distributor, in agreements pharmaceutical on per place will multiple deliver Pharmaceuticals. zero To cost that saving average, year. biosimilars $X,XXX for for Quallent patients,

subject Now businesses, to differentiated areas HUMIRA. competition. of opportunity million and U.S. our By and value clients, expand for grow in and goes the in our annual demand, we additional of positioned XXXX, home and an services care. will generic well specialty increased well including we to biosimilar is continuing In Accredo customers patients. And health, deliver beyond expect $XXX the spend drug virtual biosimilar be to care key are behavioral

example, summer, additional behavioral expanded X states. further group we Evernorth an care For the to

outcomes our positive individual XX% from reductions based clinician fully preferences and experiencing We are clinically depression needs patients unique on significant the of capabilities matching patient seeing and symptoms. in anxiety with

our pharmacy benefit Express to foundational Scripts, shifting Now services businesses.

expertise are given our as well clinical as and chain seeing client orientation. proven We of strong continued partnership supply our demand breadth

Scripts innovating a Express track record for on This new those quarter, enhancements of continued with serve built we solutions. long and

continuing GLP-X X interest the already enrolled. lives example, more drugs, cost million For high from to now our than meaningful given with clients see we're of in EnCircleRx,

the provide Our with will make lasting in these of help program to term. to short maximize starts with who target and effectiveness our and data most resources benefit these longitudinal we changes from patients long both medications medications, patients the to

in innovation benefit is our oncology a which available Another be services, of recent announcement of example XXXX. Scripts will orientation Express

oncology of care medical single behavioral pharmacy, Our the new navigate a patients helps cancer providing health treatments. challenges by and benefit, integrating solution

care providers guide individuals Our patient-centered high-quality will and to help approach possible ensure teams. earliest the coordinate across clinical detection to

increased our the create as I our business. that in in are competitive and to our in the clients customers, are coupled that note in Cigna we industry planning and assumptions. pricing continue and solutions benefits platform, Now and anticipated, total with moving elevated largely book utilization better Healthcare, value line our we've seeing would we results care. deliver of of highly with levels for Similar outcomes to health cost to others

continues U.S. while And growth Employer line there in consistent Over the business clients a every with needs discussion. our foundational across to of year, globally. unique, perform this met expectations. I've and are with across client few themes U.S. are hundreds of Our every the

on First, particularly continued market. in GLP-X to gene medications light coming and like affordability, therapies focus

improved importantly, increased need behavioral coordination services. of an access health of and Next,

Third to for vital. is mounting and healthy our point solution and programs fourth, keep fatigue. And of opportunity longitudinal clinical people leverage and the need data help

clients to given to down. that choose support keep resonate highly to their Our help solutions, well right innovative workforce solutions proven the consultative capabilities programs continue our our costs approach of set and help our to

outsized our Select segment. example, and we in see opportunities, for continue result, a As are gaining further share to

including employer capability benefits health, and and customers, solutions our to and integrated U.S. services business Another our innovative modular deliver pharmacy. tailored care from clients Evernorth, of for incorporate virtual behavioral that our

clinical patients site outcomes care, our the drug which costs transitioned Pathwell Our treatment of we now nurses, to specialty associated way with their of exceptional providing specialty of in are and another while solution, for Pathwell patients. improved value drive With is nearly continues is care reducing our comfort receive prime who've Accredo also home. their specialty convenience XX% a and Pathwell therapies example.

solutions recognize like pleased with we delivering the Pathwell. value to continues market the through are We are how

Turning to our Medicare Advantage business.

quarter I'm of remain We make regarding of that continue as we pleased the and business, to track sale XXXX progress this the on close to great planned. first in

pharmacy managers heart minutes talk the At landscape. this pharmaceuticals. want to Next, the benefit about environment a the take current few and to debate relative cost of I is of surrounding the

we pharmacological As in of innovation. health key force the surge previously discussed, of a change care is

in used per quality most care will treatments advances the context, billions frequently drug through cancers as therapies, come and foreseeable per States. of XXx the billions life it used breakthrough prescriptions benefit. for person and coverage annually United improving and other of prescription resulting is most per and for personalized year as For medicines. Today, -- and on average, meaningful in of the conditions gene dollars well And future, extending year

In the more therapies and example, already there U.S., for available. therapy XX cell than gene are

in nearly are there the X,XXX pipeline. However, more

know, of for GLP-Xs using driver on the impact drug of or #X forecasting next be from XX% growing years diabetes. XX Additionally, are trend to year. to of will grow plans is stem population the and the and this tap sizes in diseases And pharmacy rapidly, This as nearly helping obesity class complications we that benefit treat the all GLP-Xs sooner. U.S. some with

manufacturers price. entire could applications access the innovations from fast-growing across of are pharmaceutical health as are The as trajectory? and to that system individuals at with to affordable well pharmacological undeniable. afford to is pharmacies a role society the pharmaceutical fair how And one care continued is Our trends rippling these able unanswered negotiate questions ensure this biggest

coming drugs year, work XXXX, rate median drug $XXX,XXX last who pharmacy benefit were than to drug cost prices companies than median X% down. over unsustainable To inflation. the the with over a chain fact, XX% of this, of were increases only basis, underscore And new price greater XXXX. In part more to drive up the market up on brand in are supply

me market price to was XXXX. $XXX,XXX the new over coming this. Let up repeat year, median drugs Last for annual XX%

reached that of Scripts Meanwhile, at for on the times Stepping in levels more tightened declared pace $XX savings results annually. clients, and supply. and cost coverage to Friction the Express winners patients in a pocket $XX arena change was can on media our headline. flat industry in has at pay, negotiations report is relatively into and back, in delivered drug out average. Scripts in drive with XXXX, Express every being average, employer-sponsored than now And spilled losers these and with generate industry billion sharing Express every for Scripts and XX-day friction political system.

patients the We results outcomes believe customers rule day. and that clients, to and the our facts delivered and will

we However, points widely do be address ensuring legitimate opportunities. on our proactive. continue better is more the understood. and model This And means to value to more pain the calls we that us environment and to we bring evolve and what

our accelerate responsibility for medications while States out-of-pocket serve. solutions For patients a the many. the in more From health We innovation affordable every point make in view, $X,XXX finding continuing of costs to example, person of we X% above in accept outcomes year. the too to United improve experienced that's to XXXX,

and and the we Make the team benefit doubt our team achieve. work the the that the of day results of continue proud our ecosystem and and clients to challenge able no care play into are every we for lean role health the we're does patients, will our to

Now let execution and growth Brian. summarize ability our focus, confidence to growth compelling pause XXXX our have meet When in me to we transitioning our you long-term and combine and potential strong before targets.

a we by proven expanding record innovating in and for serve new meaningful delivering well of as our Pathwell differentiated track solutions EnCircleRx as have suite like those value We partnerships.

track full year EPS remain on second opportunities has As financial XXXX. on and with generate over of of our remain delivered cumulative cash to shareholders. we we over least Further, building growth to the billion track earnings achieving average commitment a invest sustainable the deliver for EPS company record our to of growth share while adjusted the on result, XX% and years long all the last we meaningfully to quarter, XX% annual on our capital for next in $X.XX, XX% decade, for adjusted term, while deliver $XX.XX our adjusted adjusted we growth $XX per X guidance track at over of continuing of benefit EPS attractive of operating flow and the

our Overall, reflects first portfolio performance of and differentiated serve. meet to growth. that foundational harnessing the to company in and capabilities value our strategic sustained the for focusing breadth capabilities the of we our accelerated continue on strengthening our positions needs growth those through the investments creation of in year remain significant our the and balance of make also us strong our half organization in business. evolving the We and

With that, Brian. over I'll turn it to

Brian Evanko

I'll reflecting Thank which results, Good second Cigna everyone. our quarter stability and growth growth Evernorth consolidated The operating strong against We're or review second our morning, results for of full and represents you, year. year-over-year revenue share diversified for the and with outlook pleased and across billion, the strength XX% second XXXX financial portfolio per growth. of include earnings Healthcare financial commitments. Key the $X.XX David. of our care. our businesses of continued Today, execution discuss demonstrate environment the Cigna's year-over-year and underpin results quarter in quarter highlights and a XX% dynamic adjusted $XX.X

our earnings share first $XX.XX, XXXX represents we which confidence year of With growth least in outlook the XX% have year-over-year in continue than strong more half adjusted performance, per at EPS. to full

on comment driven our strong to to I'll turning of continues by Now segment first both deliver results. its segments. Evernorth. operating Evernorth results

with Specialty Second and pretax slightly billion, $XX.X revenue quarter grew XXXX strong up earnings expectations. billion, $XX.X while to adjusted Care revenues grew showed to XX% pretax growth and of Services at $X.X target ahead X% adjusted billion, across our businesses, high demonstration a end up range. of million, our as long-term diversified of we performance earnings and the is our capabilities growth robust This delivered specialty growth $XXX were XX% broad-based to to

as addition to Overall, quarter of pleased capabilities and of results to our customers relationships. we're in care second drive services to as expansion growth value CuraScript, strong Services income the earnings new driven Evernorth's wins our and existing million the businesses. Pharmacy innovative also Pretax Accredo and adjusted by clients, second strong patients. continue and $XXX of our half revenue with continue expect in posted the year. as well for Benefit increased growth business

Healthcare. Cigna Turning to

$X.X Second billion, quarter XXXX billion. revenues were pretax earnings adjusted were $XX.X and

prior adjustment. impact favorable line were earnings risk and expectations in Medicare a quarter included Second $XX of to related Advantage approximately with year million

medical within the year care approximately ratio. care unfavorable item, in medical XX basis inclusive of $XX with expectations. or expected ratio second million XX.X% was our the of on the points The impact ratio Absent line aforementioned range, underlying care quarter broadly of was prior this medical

As above unit XXXX well account inflation which be previously, as levels, cost elevated into we cost priced trend utilization. planned for continued as had and XXXX to noted medical both took

consistent have end second at of billion, cost we to with payable cost first quarter. planning the the Year-to-date, quarter billion the compared $X.XX net trends, $X.XX seen medical was pricing the at and assumptions. end of The elevated our

reserves incremental sequential have $XXX in line the net cost in reserves first to had claims payments normalized As Those more expectations Healthcare with payable. we million Change and the developed in noted disruption. the booked previously, since levels. have returned to driving relating quarter, in approximately medical decline

million ended customers. the Moving We to with total quarter Cigna $XX Healthcare customers. Medical medical

Healthcare expect employer primarily medical U.S. of year, driven remainder consistent our growth dynamic We by operating Market Cigna a Middle in Cigna results customers and segments. growth Healthcare in delivered in the for Select the Overall, environment.

full strong adjusted in are income consolidated outlook for $XX.XX least we Now least year operations XXXX. Cigna continued share. Evernorth turning With XXXX year our billion at Healthcare, full for our to our and per underlying from $X.XXX performance reaffirming at of or expectation

we the approximately third per outlook. adjusted Regarding share XX% to be year earnings of cadence of earnings, quarter expect full the

Now earnings turning the Evernorth second increase billion. to our outlook third to pretax momentum accelerate platforms. of earnings in at continue to year-over-year of high growth, our XXXX offering. due least interchangeable $X full to each single-digit In quarter reflects our XXXX Evernorth, This growth adoption with adjusted expect continued expected in into for we part of year biosimilar an half, to

Healthcare, to For approximately adjusted least to outlook. expect XX% full we at $X.XXX and full year XXXX of year third Cigna continue be billion, earnings the quarter earnings we expect pretax the adjusted of

We XX.X%. range continue medical to care the the expect ratio to full within XX.X% of year

third With slightly midpoint below expect that care the the XX.X% guidance first the level. would of to care quarter ratio the half medical in year. at implies an medical coming ratio the XX.X%, second half of for We our be

Turning our capital position. XXXX management to

we million repurchased of shares with approximately consistent XX.X XX, or $X commentary. common July our have stock billion, previous of As

operations. to continue of expect least $XX We cash from at billion flow

Our remains cash balance benefiting our drives on strong, and framework outlook from returns efficient sheet that asset-light capital. attractive flow

to recap. Now

first Evernorth consolidated and from Our reflect Cigna half both contributions Healthcare. XXXX and strong results execution

to and growth outlook deliver full share outlook two strong confidence Our which us platforms, earnings reflects per year gives sustained least XXXX $XX.XX. fundamentals adjusted XXXX at of momentum our the our of on

that, of With for call. Q&A the over it to operator turn we'll the the portion

Operator

Research. with Our first comes from question Wolfe Justin Lake

Justin Lake

discussion? a that or expectations, it's an line XQ things also When versus of line? Maybe by you second trended have what commentary seeing your versus is on more how on give that XQ. is in your Or the trend in trend. today running that Or line Is with pricing coming you us and out is where less business update year-to-date can the you expected? what Appreciate say and quarter? you're cost elevated that is

Brian Evanko

it's Just, Brian.

exclude So risk end guidance to ran another toward earlier. NCR Medicare I'll performance of NCR impacts Cigna mentioned at I of the lower quarter prior when quarter we're Healthcare have start you pleased in saying the delivered year that our range revenue which adjustment solid the by

cost There in that expectations. line drivers. within specific Now total I with puts if are into call quarter, of out and the a get we was takes broadly cost few care

see So facility-based elevated of to usage we continue room. including services, emergency

given Additionally, we a continuation health health. a the whole do person of which saw of care mental the longer elevated to utilization term we as services over positive see correlation

I quarter, first the in slowing growth recall in surgical highlighted You'll costs.

of the During we although didn't abatement costs second costs of continued surgical in quarter, grow. rate see the to still growth

trends, are elevated yet we and to guidance XXXX seeing in we high are priced with sustained in line together, planned began all these utilization our the cost that as taken for continue XXXX. Now broadly throughout levels

aggregate also the care any not or that to month-to-month witness specifically deceleration quarter, second we've would Now the the did note within patterns we seen. of experience in year-to-date I acceleration quarter. variability relative not

So year confident outlined in MCR in range our overall, guidance. the full we remain

Operator

Lisa from Gill JPMorgan. with comes question This

Lisa Gill

to want made I season the comments on selling start with side. GLP-X. XXXX pharmacy you around the

to buying continue just curious, to would kind of I'm you are into indications we new 'XX, programs what how when going see XXXX? opportunities think one, about characterize We in there. people the that

comment What understood both I media to know, as comes the more And need what those be of are widely wiping are as made benefits that around the that making pharmacy the don't then when David, you with lastly, Because more reports Congress you business. fairly facts as your to well agree it known? the facts business. a plans you reflect the

Eric Palmer

sales Express is going our overall, XXXX. foundational new Lisa, start years the start better. our add to to good for or a pharmacy here. maybe and additional benefit some retention rate consistent David I'll off X with XXXX is then to the invite it's be got business, We've services But and Scripts really end Eric. on strong comments mid-XXs

be bit, well is little The health as grow. with benefits health significant specialty specialty overall also strong business in to other use as a systems our to electing back Evernorth positioned positioned plans. Stepping -- growth continues to pharmacy directly capabilities. by to strong and our services clients growth driven is well for growth sold

of the about our helps that to resonate programs and to more or our continue come that areas effective, are market weight how medicine David or to manage ago that effectively to the dollar medication we overall. themes oncology like value make The remarks. EnCircleRx point with is mentioned excited recent the on right? specific programs would strength overall, bit offering the to a they his prepared I help quite So back solutions program most of So that spent loss GLP-X benefit in the

of work with well take David, benefit a in specific targeted that really So suite you we continue well comment? on environment broader that to the types broader programs scenario to resonate bit to offerings invest of continue really in. want do the

David Cordani

the out. appreciate call I

we me foremost, of First health professionals. proud gets daily, employer governmental appreciative that healthline care and relationships let of and up partnerships and our we're relationships, team through everyday our entity I'm customers and patients reiterate the greatly relationships, serving increasingly to do through work collaborations and

ClearCareRx, Second, continue the innovate first in through program, pharmacy space. whether serve, and of the which we are that's program, likes our will benefit our independent EnCircle program, of to for those need to patient all of insurance our the

our to of independent more support we challenged communication and the and a specifically do clients, ourselves with relative aggressive customers course. those complete to hill, who on then subsegmenting aggressively of on rural truly industry our incredible health does the your and third-party the credible in lastly, they buying we leveraging we pharmacists more in be employers analysis and even intensely be or collaborate and independent what of serve way. working are pharmacies fact-based engagement independent question, behalf more independent deeply what and specific much Now of to And

we're So that. and a more see amplifying us ensuring you to should that bit aggressive complete expect

also make innovate innovate to will need of we to and doubt, the have, continue to those continue no benefit we as But for we we serve.

Operator

is open. Rice comes A.J. your question this , And line from

ask You from UBS. question may your

Albert J. Rice

your I about out Point quite health select, season large benefit behavioral then just your while and affordability health selling [indiscernible] the book, you might called now, et flip in the also, tag seeing ask for I gross Solutions. a on integration. addressing you're over you understand how group and I and wonder cetera. and understand you're across a And how

question, point employers Do as think offering? that anything between you But ] on or you of these sort of the is solution the there integrated them some in How choose Myriad of your you'll middle the of -- and getting solutions are addressing a [ yourself do solutions? consider that? see point offering point you is buying helping then part

Brian Evanko

up the I'll Brian. Cigna buying selling think point start on solutions And it's and question relative of part on Healthcare season inorganic to will of some then activities. A.J., dynamic. your the and second I pattern David our pick

Healthcare to comparison this we time similar So season, existing as year in Cigna relatively terms We're selling the time. year market seeing number I'll concentrate out our as my it this RFPs employer relates end of last just consistent of time. And amount to given the similarly, larger in the last U.S. did of we this the the comments bid a at on to year a clients, year. of have at

on some context numbers. for So just the

particularly employer market. hitting wave the to David each gene tend I'd GLP-Xs drug areas key few reference to clients out focus out unique these One, terms including therapy teams of in that of the the made what a be our larger with as innovation, continues area have affordability Now to thematically of call earlier, and in are market. There's seeing of needs. a

supply can some point integrated point, your with vendors those the to to larger of are employers or consolidate offerings. more solutions seeking who Secondly,

and some pandemic. downstream of programs given of and year, the more benefits these Third, of becoming effects health and more each mental the important we're seeing substance particularly

or navigation clients And capabilities finally, care optimization enabled in are study digitally larger empowerment. of care consumer these to drive interested further many either

demands as under importantly, positioned themes strong growth in and So from see offerings in also And Cigna taken employers. XXX continue Healthcare our want Select we well all Healthcare are large net our address traction segment see Cigna growth our David, question? to you these to together, Select pick point the within the specifically. up customers in solution X% in statistical you'll to maybe supplement, year-over-year on segment

David Cordani

Sure.

you you about in to the prior solutions So about our think a conversations, them capabilities health in first, we think can if and digital formulary, we and seamlessly. identified of connect some call both way that connect work today's as

You and or care of will focused and more in the starting have on the to medical basis, coordination offerings. professional, can think the another coordinated EnCircle and that referenced designed has about continuity offering matching coordination taking professional. The more access Cigna be designed. coordination the much the a care the is the there'll out care way is actually continuity program health care need is example the the care I the and patient new much the patient-centric that Group experience, behavioral staying It's to of from and and we oncology specific episode program roll pathway that in of XXXX to redesigning

You about of To all core never built through could not solutions. could acquisition, can to largely as think back episodic it we think about continue organization. the there those although that roll the through question well, largely you in point out having invest fueled coordination as acquisition, been you be organically as

to record partnering helping go they of in that by and almost graph organizations point would the where a Ventures with meaningful remind you collaboratively track I'd the have co-innovate Cigna with organization we then where definition, solutions operate forward. middle, And now them we as are, we I

that those largely So and to stepping to record that are driven for new innovations meet of demand. we track serve back, coming organically benefit the market of proven acceleration the

Operator

with Mok from comes question next Our Barclays. Andrew

Andrew Mok

D, changes, broadly? there how How significant to Evernorth only navigate but all shifting the managing you D Part helping impact also to changes? not be to are year. clients And next the sponsors for With these formulary membership, more coming Part changes could does risk

David Cordani

Andrew, it's David.

our relative comment on proven briefly macro of our track clients and Eric through me and record environment to ask our their the supporting PDP to then capabilities walk Let PDB offerings.

meaningfully. ultimate designed back, that inflation it you cause was Act to and Reduction step implementation it it to rise As was going clear premiums the as was of PDP the

seniors. And most meaningful likely, for that was disruption create some going to

Now gone conclusions And some others as acceleration apparently has accelerated bids window have acceleration the similar relative the the some the bid required the to like after assessed the bids of features. of premiums are those CMS given drawn a of for bids the in, that and and reviewing we basis. adjustments going an and through has created those that on design short-term has

and the capabilities and So designed was our work we quality disruption PDP that. that reacting deliver book is specifically Reduction and many inflation from of talk more to [indiscernible] Act to we the in their clients in to to cases, plan marketplace health great affordability. in how overall business supportive Eric? ensure our

Eric Palmer

track of strong record Medicare example. helping with long and We've model got their and plans formularies plans. great for and treatment them and and stars the of changes for supporting offerings Evernorth Express to offer Part manage Scripts our a to impacts plans specifically has a a history of and supporting them D outcomes tools health the

recent smoothing copay the continued work even as evolution ensure through our with the just help of that the Evernorth like We example. the plans of to as continuing requirements they investments positioned these continue our one Scripts to continues well to positioned to business be Express and of to most with important from succeed we're coverage. part D and changes. thrive This the Part an administrative round IRA the are make associated plans with We're help changes

Operator

Fidel comes Stephens. with question from The next Scott

Scott Fidel

impact adjustment just relative XXXX if if I the what there risk trends. to thinking hoping the of true-up, maybe for you accrued you on commentary things with a was marketplace on when about [ can to also, net then was Hips couple the and touch ] there. that? had just cost the And to any us earnings tell One, how was just

overlay into exchange could the that trend view year. influencing margins of if the that's you're for on terms you similar full if seeing your marketplace Maybe in how and a there

margins marketplace still year, below view I in year. had this been the for interested think probably on that an long-term a view updated for bit there prior target margins just

Brian Evanko

Scott, just hit try individual aggregate in Brian. the big picture Maybe a view and of question to it's as risk business that. adjustment take part your of I'll exchange

I'd headline speaking, expected book the performing ask is exchange So you in as away to take our broadly XXXX. we individual

the quarter XXXX adjustment for preliminary it payable. true-up, in we the the this been unfavorable was second us. to quarter the a adjustment Healthcare performance adjustment and overall, performance confirmed we the quarter previous And as did closed small already data the that driver relates were Cigna books recorded up it to did accrued for second had data at in final meaningful relates risk have in risk-adjusted receive for our P&L. we individual we sizable exchange second a true-up states we XXXX XXXX assumptions But results, risk reasonable. industry a as the look that specific the was As our first And risk industry-wide participate the year, then not

My business was to earlier trends as commentary well. on cost broadly individual the applicable exchange

X% exchange long-term all year quarter target are XXXX So business. margin outlined we toward land therefore, call. And during tracking below slightly we'd first to the individual when our improved together, the profile of you put X% margin to the for we the pieces range our expect

Operator

Our Langston with comes Cowen. from question next TD Ryan

Ryan Langston

down was maybe a expecting there? perhaps sequential on out expectations understand certainly profile? looks 'XX anything business any even down year-end, growth but I'll just XXX,XXX move I in it of to XXXX to members maybe margin early, versus the little that exchange wasn't And and but terms Just exactly like XX,XXX call ask trajectory was sequentially. why

Brian Evanko

your Ryan, new Congratulations it's Brian. role. on

into I'll back intra-year, then of year-to-date component it the of give to maybe step get sequential kind lives As the question. relates perspective, individual you your and exchange just and a I'll

the year-to-date change first the is So we discussed as driver Cigna results of our customer quarter call, volumes during exchange primary our individual in Healthcare book.

You'll profitability, recall we repositioned in as geographies see to customer that a some to certain needed XXXX we in including order pricing in and business in expected reduction have actions we volumes this taking improve witnessed.

the exchange the of individual decline business modest sequentially, And the volumes. quarter second in customer majority drove the

took we the of couple driver of the of think should a of the actions of a in you larger result being premiums Now nonpayment primary as geographies. some of that pricing

immaterial the kicking So it's an in. It periods in our results financial delayed grace those quarter. to of essentially the impact was effect

course in we should result growth to U.S. our would segment. sequential XXX Healthcare the year. for balance strong and employer of U.S. this continued year, the the Cigna employer of in Select expect Over balance lives within growth of which see the under

all portfolio. taken Healthcare pleased the So together, Cigna we're overall in balance the with

to will relates we to we'll a dynamics, would through as know in the similar exactly standpoint. in design. margins year little pricing hard how too from the better a and the look shake the we've really or network it we it's be our bit potentially all individual all until completed XXXX rate filings how shake But competitive out early that just to recently picture there, expect know see to And next forward. we exchange book As membership

Operator

question next Josh Research. Nephron The comes from Raskin with

Joshua Raskin

how get market? equation? does select the on ICRA I'd potential how And could fit your stop-loss impact maybe and or that the to small be group for curious views into specifically that

Brian Evanko

it's one well. I'll that as Josh, Brian. take

So in closely. the that market, likely current its monitoring ICRA a we're but we see form niche one market being is

see ICRA buyers. So be we who to a option more market the for in as something more commoditized that specifically, tend be employers smaller feeling could

this XX expect a which segment And attractive market, most less has within an for XX employers so for is immaterial average employees, fewer with we very the financially than there small And to option be us under today. employers is likely market employer the XX is employees that typically. than

an business us momentum? individual for our should in exchange space, that said, the Now ICRA to all more gain opportunity represents it participate

know and most question, our are fully didn't business. Select integrated segment I where that your stop-loss see our being a this offerings, niche we I with likely market to Again, started

threat of way So something that the described earlier. us you that a select question. market to not that is the net as that should think for the transpires under Thanks XX concentration the provided in I

Operator

from Our with George next question Hill Bank. Deutsche comes

George Hill

in business any that if don't can those of are conversations continues know a just to of payment on I models how I be lot trying of or ask goods discussion on the side changes is thought retail what there's progressing? negotiate to sold terms. I'd the a around there consider question pharmacy to new update provide line, your I you be cost which from

Eric Palmer

or first, going array But pharmacies got our for lines. Eric. the it's constructed best for options of specific and look negotiations things affordability along Thanks question. to any meets I'm with George, their extends a know, on clients. to that to That how wide we've comment we you those the and any our as we've and clients our as choices access network balance needs of patients.

different a access up clients. that reimbursement trade-offs the there the range network different touch our a with range of we So for needs options associated and of match types for cost to under and assemble work

Clearnetwork a approach solution. new An shared there has index announced the to off provides would us solution that work We continue that late bring to us well. simple innovate a Clearnetwork independent, the margin year, comprehensive like to be and example of that's and it's pricing new between to externally simple of overall, solution last a we So served got solutions is in based created pharmacy. our then market

last in last a But we we together generating part grow the So that with buyers to over reason pull offering [indiscernible] is offerings to again, portfolio that's our nicely benefits continued services, overall, continue of pharmacy interest. it's we've the resonates market of and the few year put years. new the the

Operator

question Our with from next Kevin America. comes of Fischbeck Bank

Unknown Analyst

Adam for Kevin. is This on

color anything versus more being a on helpful. be but read and you down? you quarter. on on wouldn't into how little So Any beat in QX this give raise if to Can seems didn't came what raise the would least you expectations, And or DCPs at in you the like maybe a on raised your smaller PYD -- expectations? things for on there's maybe [indiscernible] why guidance color guidance

Brian Evanko

Brian. it's Adam,

slightly we're another off, second to lines the first results results expectations with overall quarter both of ahead pleased the and have delivered on bottom strong top in So of our quarter.

we we're $X.XX environment, near of range reaffirm XX% respective And key long-term all growth tax guidance account strength the have and delivering year metrics against are annual that Cigna end representing into outlook EPS within over full attractive full as some their supporting line, items timing-related being year of as commitments. contributed EPS to average did importantly, least XX% our prudent Evernorth this well in high benefits, the at pleased both Healthcare environment. to our including the and Now the quarter, considering this dynamic EPS growth the to we're of rate XX%. with Taking

Operator

Our next Morgan with comes from Stanley. question Erin Wright

Erin Wilson Wright

Evernorth. contributing then quarterly the half out the specialty results how called strategy and the year. for now? and at Evernorth to across do influence that's across for just of in-sourced? instance, HUMIRA Have HUMIRA sense sort you does Does we And back make in the that strength So HUMIRA the how your I how services and than the strategy progression to of think relative about guess, across that similar on XX%, CuraScript business. that in-source you're targeting it out front? expectations? more playing you, the the around to instance, your

David Cordani

David. It's

me Let start.

have given question your the space. the You of in and a appreciate lot it, importance

the care potential see and to portfolio that that leverages about we're And for part talking just about our as today. of the services. provision in XX% business specialty Care and cases, a We portfolio represents First, reiterate, the Specialty the the excited business business. enterprise product of growth really many quite of we're

the through discussed changes the had our capabilities time, As back multiple quite well CuraScript ask we expanding a capabilities to strong the little I'll and as for of portfolio. more second we're as in position biosimilar bit we core in specific peel growth business our noted, had through breadth see both us well opportunity more that questions as our our we quarter relative some the marketplace, Accredo in here Eric? as XX% of of in Eric relative opportunities the to to terms specifically

Eric Palmer

Thanks, David.

important again high-cost customers affordability to well positioned little the really we're And back and stepping to therapies. these a improve help opportunity as with to of medicines. our these bit really just specialty clients So well. connect their Biosimilars a

and Our has with approach in been choice we best here align clients' that offer our consistent needs. value to

And involved. and our net for chain. fuel we're focused everyone supply aligning cost clients, on getting the patients, pharma incentives plan our sponsors competition and and low to The

cost our As to available we this attractive at very no June. label reference you've to your patients biosimilar to began private through HUMIRA, manufacturers made for and is at Quallent with and product this end of contracted in Pharmaceuticals, plan multiple the shipping cost interchangeable sponsors question

a ago, in consistent few just expectations. few uptake last meaningful seen weeks the weeks, already with our we've So

is about after just a X We at grow over point to balance the and the weeks the the see product early, continue or but see XX% of care improve for book having health of affordability clients opportunity a to shipping And to our our for it's weeks. I've to share for sponsors. so, in, of customer last plan overall our this continue that this we adoption expect X real benefit really the this of said to year. the us biosimilars

Operator

question Baxter next Stephen Wells from Our comes with Fargo.

Stephen Baxter

And on are job good asked, generally questions but a do group One ask membership spike about what trends. you mixed in-group to It in wanted Could starting see that? little changes you're in of front. membership the bit a of trends? data we're the I seeing to out the more you seem your does reflection sequential think

David Cordani

Steve, it's David.

we in back of marketplace. unfolding, potential softening level employers of employer as we softening little then of get way context, still a bit. quite just the state by discussed your to employment. it, point, working of didn't was when of the the mindful given in And were material we XXXX for As monitoring some any full year group it very in itself way. we're really to to close trends a manifests to And

we not seen date. For relative And a similar built XXXX, we've softening. monitoring to curious of large, and by approach consideration have to taken cautious bit that and a little

change the we exchange as closely and monitoring Brian largely good would economy we've represent out that seen ] the but to as marketplace, our to anything our So haven't expected, the [ headlines business. strength there far driven by remain IRS as of fundamental noted thus membership call in it, individual call delivered dampening membership tied is the previously, any you material dampening

Operator

comes from with Dave question Jefferies. Our next Windley

David Windley

developed expectations. Which is I the have your on your excess that line MLR from heard progression. comments, you I think XQ Brian, basically in in with say reserves

intra-quarter say, in see out say heard trends a that any, quarter an you you or stood particular also didn't anomaly. I the think that month I as

historical MLR for about in above maybe And neighborhood -- in like that. your the the implied progression first normal, second points of at is half XXX maybe looking basis I think the half of half our looks

view So year? just last or wanted would trend cautious to long certain accelerate second kind to in a is half as view to maybe drive head would margin? question to to would yourselves you're the Or higher next understand A you as second question. forward -- into MLR you expecting pricing, you would relative be for the pricing pricing that of things if be of expand and posture if the that expectation half

Brian Evanko

No problem, Dave.

it as the that year-over-year think half may guidance, context. the in second I highlight, metal 'XX, part driven earnings your is recall at quarter question relates our by I'd Really, the half increasing from MCR more back XXXX was relative that year discussed it which to release, seasonality tier first with of a this skewed be more you're our as exchange would mix, MCR to bronze the if unfolded, So in business factors similar you three year. we pre-pandemic to norms the individual looking

day stop quarter quarter in some favorable with we quarter the of in year-to-date XXXX will normalize and year, business elevation in third the that utilization this additional loss our third that. of Additionally, has in experience anticipating XXXX the expectation. specifically consistent is which that are fourth there is we then And had MCR some for the in finally, one

all So combined second factors those to half a higher generate year-over-year.

comfortable with range that But full remain guidance again, confident and year the provided we we here. MCR

employer XX% nearly business, that's is relates specifically on self-funded. environment, book pricing or and it reminder, the U.S. this I'll a a our to As as ASO comment

from we've been U.S. that risk-based our MCR, position beyond that employer operating margin pure of but target go a well performing So book therefore, strength earnings said, ranges. have levers a as currently is we within

current in the And we pricing environment. our remain disciplined with own strategy

estimate at contracts. provider way trends. through our I additional cost the inflation book best forward-looking to are of price of to margin work impact recapture your its our continue point, we don't seeing need the To We level,

contracts these of through levels As XXXX. continue expect we utilization elevated to renew,

we're secure higher XXXX, pricing for a ability those all pricing for put ago trend the confident had cycle. you and appropriate when in our pieces all-in XXXX beyond. assumed So for XXXX year than slightly our pricing corresponding together, And to what we

question. So a your long answer to long

Operator

Our Jessica Tassan comes Piper from with next question Sandler.

Jessica Tassan

Rinvoq got possibility you for evidence HUMIRA I recourse substitutions the And you're and ensure curious what I succeed do to in have us that they're I'm about best products you've that foreclose maybe of plenty that biosimilar could market you've the just how the thinking Skyrizi biosimilar the that opportunity? the guess patients. the think given

of So just do you yes, can what how are and to of or prevent the you kind about mitigate possibility thinking that? foreclosure

Eric Palmer

Jessica, it's Eric.

value from So a I guess and and focused and choice lowest stepping best patient offering on back, our -- approach available getting to cost solution getting is the perspective.

couple a So would of things I note.

First of interchangeable. offering is biosimilar all, our

a I process broadly, that be to ensure if so, note facilitates easier thing one need. and facilitate would to to being differentiator More for And biosimilar, a an chooses a patient the an easier patients medicines access it's we're that interchange, would here us. have so election choose they by as that

to well. access that to all make So overall, Skyrizi the that if or working a got right the we've medication. to as fulfill the in of be sure we're position Rinvoq will But

to fully ahead, a got we As on a look be in ensuring of available and a will continue here. portfolio we've the we'll developed biosimilar lead offerings be of important, to all position

Operator

Bernstein. question comes Wilkes Our with last from Lance

Lance Wilkes

on really season some a And that the from versus could seeing is little of a next you if any in me has of GLP-X fee of year, Evernorth, coverage about been growth? services give -- areas particular, coming bit the strong. PBM just much in outlook talk How you faster for little are that traditional growth growth for Could care you more color selling in Accredo? so during

Eric Palmer

it's Eric. Lance,

the and bit numerical then talk of me little a let just start things. circle more and a dimensions So Brian talk about bit the about little to ask I'll

we've the within point. program, lives So X covered over million got this at circle

for looking Scripts GLP-Xs essentially Express overall just a covering of little weight XX% nicely. weight so sponsors coverage So the got or loss the growing of back in Stepping bit for plan indications in indications. now at terms that's for business, loss we've

underlying seen to grow seen an things the perspective there, seen consistent with incremental utilization might lines. from continued also levels growth We've you those So we've or what there. along have continue growth growth nicely. industry

David Cordani

to the broader grow. direct we us Evernorth new we to as these growth, expect And well to to that or Stepping through expand medications the from continue other market specialty with in ahead, relationships part of continued CuraScript, is continuing specialty opportunities. Looking through growth use specifically, overall. algorithm opportunity that's our away through through therapies for distributor whether growth biosimilars our of GLP-X coming as see both

question? position number pick fronts So that within part overall, we're of in be growth up Lance's of different want Brian, pleased do deliver. second a to a Evernorth you the across to to

Brian Evanko

it contributions here. in performance. of relates to Evernorth other line up quarter-over-quarter, different Evernorth, revenue areas are contributing the is XX% fees from a about to as strong number which our Sure.So I and think the Care businesses reflected

behavioral So health think of business. EviCore, MDLive, our

And with to where your orientations are us. then business seeing of benefit in additionally, solutions the fee-based within pharmacy we services continued core growth clients service-based more electing question, the are

leverage driving revenue other finally, this contributor from showing that So fees and the results in enterprise eliminated at with Healthcare corporate and in up then Cigna revenue the level. is cross in Cigna Healthcare being we're the Evernorth to other

fees strong line. that in to revenue other contribute those and of all growth So the

Operator

closing back Cordani I remarks. over will you. David the Thank for call turn to

David Cordani

momentum, questions. a your for our all for you just from outlook your XXXX, thank headline deliver at engagement to least XX% on are a and XXXX. points. confident today, With rate growth EPS want that we me $XX.XX time represents will which let few of highlight First, our we I over your

appreciation Additionally, want that before and coworkers clients, shareholders. those to partners It's and our customers, the and our us across including XX,XXX our globe. our recognize on you, patients enable commitments, continued we our their support to express deliver to close, I our focus, to dedication commitment to our

that look day. forward of what a ahead. we we're our proud we stand about discussions. achieved, as great always, look and excited And we've We're future the opportunities Have Thanks. as to

Operator

will Relations this to XX Review. Cigna available XXXX to for additional the will conference Second following Ladies and of gentlemen, be questions respond Results Investor A this business Quarter be shortly. concludes days call. available Cigna recording this Group's

You the for passcode may dialing is this for participating. (XXX) by or There access XXX-XXXX. replay. recorded no conference required XXX-XXXX Thank you (XXX)

We will now disconnect.

Cigna (CI) 1 Aug 242024 Q2 Earnings call transcript