CI - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, thank you for standing by for the Cigna Group's Third Quarter 2024 Results Review. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session is being recorded.

We will begin by turning the conference over to Ralph Giacobbe. Please go ahead.

Ralph Giacobbe

Thanks, operator. everyone. morning, Good joining for Thank today's you call. Giacobbe, Relations. Investor Ralph President of Vice I'm Senior With are Eric Health Evanko, this Cigna line of of and me the on Evernorth Executive Chief morning and of Cigna and Officer Chief Executive President Officer and Officer Healthcare; Group's Chief David President Officer; Services. Financial Brian and Chief Cigna the Group Palmer, Chairman the Cordani, Executive Brian results In our will our today, our and cover including XXXX. financial David of for third number outlook quarter and a financial topics, remarks

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

when Investor As of performance. most release, accepted reconciliation materially our with income to operations net earnings risks and today's the noted our in total risks in in A in directly note otherwise and most in known cause measures is filed adjusted term the contained cignagroup.com. of the statements labeled will forward-looking which basis the differ expectations. and the share determined in from our per our principal measures, earnings These is measures, are income statements not income cautionary are regarding today, results, posted as A section release, release today's reports financial including could these use United statements, subject XXXX from comparable measures is results and actual on future States, including be for of operations our adjusted uncertainties accordance shareholders which financial adjusted from and GAAP remarks GAAP. describing certain as the with earnings our uncertainties We current SEC. some use description revenues, these to generally that Relations recent we performance. In principles same we making outlook contained earnings our to of revenues, the respectively, adjusted and financial the and to in accounting

driven items dividend, as or well of of quarter, $XXX excluded of million recorded GAAP are results. a over, of This will per remaining supplement. as share. results. In is financial VillageMD. is asset the our share also quarter, call operations realized per recognized Details share net value a I $XXX financial of recorded the after-tax discussion our share. other special the adjusted we the from the per the of of pertaining turning in per loss In income or to million impairment to special the or special $X.XX the is $X.XX the item billion This item the $X.XX as cover quarterly couple This which of noncash of includes adjusted write-down income by from Before third carrying we net $X third our both a related earnings in shareholders' and after-tax items financial charges net in included quarter. investment

the that full repurchases on Additionally, we share note XXXX including David. turn of impact call that, dividends. With regarding basis outlook, prospective make a comments performance, that the over when future anticipated do so year potential to and please includes XXXX I'll will financial our

David Cordani

today's our quarter third of rest you more tailwinds in to of results and Brian our and and outlook relative I'll growth Thanks, the for your morning, take how about advancing the headwinds. we'll our expected the some joining thank provide strategy. Ralph. share including everyone, results call. talking strong spend and Good minutes few the I'll detail about a questions. we're some for also and Today, then year our perspective initial Then XXXX, will

pleased Cigna adjusted per report the billion of to total So third share and differentiated let's get earnings of record the in started. Building quarter, $XX.X revenue track competitively a delivered $X.XX. I'm Group on of that performance,

hard and they work depth collective do. the to bring everything testament and to a commitment, are and of focus people results Our strength we our

have tenure company enterprise the into platforms. in years to round our industry continuity perspective. out more with sectors many And leadership growth our than and to average across industries XX team talent experienced infuse across the new We and deep we most the continue to

harness third to Our performance complementary attractive of and the Services Evernorth growth. growth quarter platforms, capabilities X Cigna demonstrates how we Health Healthcare our drive

momentum benefit reach. Cigna quarter, customer Healthcare expanding the services contributions and particularly segment. on Evernorth's initiatives, and services anchored draws results market-leading continued overall we folio growth reflects Of deliver continued strong our our our This for we strong support the line their as outcomes to investing specialty demand benefit by and for in broadening top bottom well of Evernorth employees healthy our capabilities growth quarter. continue services in care affordability our U.S. by and clients, was and continuing and the delivering within families. greater and as generated note, Select also our innovation in pharmacy their our offerings solid driving are enterprise our as employer business. business affordability

our close and demonstrate results execution of Medicare business our the years continued business, season sale in first on Our opportunity XXXX. momentum our ahead. Touching our peak Advantage the of we during Medicare in on growth on remain selling for and focus to quarter track HCSC to

of be pleased our and majority We in value line of that we're overall continue for our the average enrollment including to would business with to proceeds X expect performing again I stars Medicare use will offerings, our XXXX. weighted for the note repurchase. is nationwide expectations, with the share

execution, strategy Evernorth focus attractive forward, to further and quarterly our will Medicare our resulting results. chassis serve ] on our Going in reflect lives. Overall, continue growing to strong be [ results clear

speculation a context believe Now provide don't headlines media on stepping recent our comment comment on to around that company. rumors, times. And take want and important is unprecedented we to we during to while moment these I it back, additional

no First, that is the disrupted. highly is there question industry

and revenue to and operational ratings forces for reset For a cost, number These of particularly the well. many are given medical the in significant market some contributing Medicare for risk-adjusted event factors, disruption is change example, other elevated the challenged as including of a stars streams.

I we on are actions numbers, but clear As on don't we noted, the do I will pursuing. is very comment what be

our deploy continue We over for billion October. flow year-to-date, repurchases with share repurchase, in totaling $X.X $XXX excess cash million including to free

we repurchase quarter, forward, leveraging continue to repurchase which shares stands at fourth capacity, remaining to our actively $X.X further ]. the our expect in Looking [ billion

of of quarter I several transition the in we care. third actions Now to and to reshaping want that the address throughout cover the the change are face XXXX driving health and forces

While clients, our our we the for for patients. continue growth of position and our company to benefit customers

to the pace gene of innovation manufacturers. and pharmacological for success patients they pleased The the example biosimilar of dispensing are providing the in how our Specialty and Pharmacy approximately its of of growth that opportunity X/X eligible it individuals interchangeable we Building breakthrough which accretive will we we a well in And for are announced will among $X HUMIRA. several available out-of-pocket accretive biosimilar as end was leading the weeks interchangeable drives June, STELARA eligible for an biosimilar quarter. begin HUMIRA the and for it surge. biosimilars market is treatments continues in price extending trajectory, list quality market in for meaningful high strengths, the in example, strong and business, therapies which given first we both penetration coming leader the on through a are be and the that we're make XXXX. to given lives, differentiated improved rate savings continuing our but clients. offering the Evernorth Accredo more Many ago, patients, that for way biosimilar, began value. At is of as to Like treatments, space. and pressuring us secular affordability is tailwinds The new good

Another example is driver of this GLP-X the leadership the on drug plant year. be drug trend pace class, which our is to #X for

positive broader months Professor FTC's XX-day equivalent the The Scripts, to Pharmacy tribal reimbursement name than research Dr. of this solution and this direct with million approximately and The prescriptions. Earlier generic access the patients And proactively support Benefit provides almost wrapper of individuals a to sources, Carlton, is pharmacies PBM in Service This XX prices as from maintain for drug addition released from has already now around by list that drew month, University contradiction was report XX also expensive finding grown of well DOJ access as high-quality is to a in to the lifestyle importantly, prescriptions. changes and Economics patients Dennis of that Americas of concludes improve in clinical lower and of and approximately pharmacies for pharmacies. help costs. around quarter, $XX,XXX to price is economists rates clients. continue facilitate the Another fostering a misconceptions in I'm business, Dr. drug ensure Carlton's address EnCircleRx to our continue with in number brand among to Dr. manufacturers lives sustainable benefits multiple PBM's pharmacological information higher the with industry. independent with affordability pharmacy to the that year Express PBMs enrolled. analysis Chicago billion medications including comprehensive increasing. support independent over to Carlton's medication EnCircleRx why pleased conducted research industry share competition access program manufacturers lower alternatives of PBM chains, former vital of industry. affordable the high X the pace review to we and change and

discussions study Carlton's critical engage about We fact-based issues. as Dr. to will leverage continue we these in

the increased quality trend, globe. need part is unfolding behavioral driven that economic, the services, around for to in are social second Moving rapidly the tensions dynamic by changing which geopolitical,

we've utilization For context, in the past X therapy overhaul nearly behavioral seen doubled. years,

almost I access can to businesses improvements, embed coaching profound as we lower into from pursue. and guaranteed of our drive have solutions. The Healthcare and to powered millions our same will capabilities innovations. Cigna offering and and adding Healthcare example We're of the behavioral the issues we as including and with online of increase beginning vast implementing such programs see those for access, in worked services of complementary treatments This technology-enabled providers another them period, new network, trend and Evernorth personalized XXX,XXX appointments as changes on complexity more care. the XX scheduling is how health which will only diagnostics start final Cigna within is services Now customers emerging example, AI assessing leverage and to now hours, with touch innovations needs technologies

about the with ongoing viewer U.S. the through access This rising part telehealth is of exceeds XX% example this virtual services which year X% of who adoption way is the rapidly in the last care Another far care pandemic. accessing patients services, of of

We in continue with MDLIVE. platform this area to advance telehealth our

acquisition have online our video care portal. flexible fast XXXX. without able change risk MDLIVE last to forward We we since Cigna issues, patients out. At or a an took lower Group, customers have phone via wherever to forces the value with capture patients a another And benefit get whenever offered they step health in physicians that The typically are its them serve. for month, and enabling want within of X call, and the with built MDLIVE we from receive of those treatment we are create to for call these

I'll tailwinds the we to some and to XXXX. transition for relative context headwinds Next, provide anticipate

detailed our Now quarter guidance we'll always as do fourth during we provide call.

the strength XXXX our for and another Healthcare Evernorth expect competitively both platforms, of Cigna With to and we performance. year strong to of have attractive XXXX finish

Some the include accretion of proceeds. from repurchase business, ramp-up advancement and divestiture specifically continued Medicare share new client of offerings, sales the our of of relationships from notable biosimilar continued the tailwinds our impact EPS

to turning headwinds. Now

Considering We dividend portfolio net sale continued investments which our Advantage we We investment. from mitigate of investment in And the income to we from drive the sustained year with our position all business, we growth. no with expect prudence. EPS recognize the we we our of year growth at our constrained strategic approach expect across least the which and VillageMD time. over takes, appropriate of with is where lower another innovation historical and will growth longer for Medicare make XX%, will puts strong long-term anticipate as ourselves consistent start will XXXX overhead

XXXX year targets. our for performance that execution the quarter. momentum, focus in serve differentiated to earned disciplined long-term on our The us value and for the Building Now ways I'll reputation third our we a summarize briefly industry. quarter lead and meet and has positions Cigna for driving new Group those delivering growth full our innovation

designed team even this Our our navigating company, our is colleagues strength XX,XXX consistently the platforms and leadership ability is the capable structure of with passion year to the deliberate the of And most do of worldwide. after to attributable environments. commitment growth directly our which dynamic and year of

earnings on As track ] $X.XX we least per a the result year share financial remain [ quarter, delivered adjusted our to XXXX. in commitments full third of on adjusted $XX.XX we deliver EPS and with in of at

growth on EPS EPS rate we over XX% record term, rate continued our over our on past I'll the performance on our to outlook a confident over to Our average, long of annual the of on company share delivering adjusted decade. With and XX% opportunities the Brian the track that, average sustainable for the for our growth turn to in rest compounded of remain has building and and quarter attractive XX% achieving perspective additional year. it growth

Brian Evanko

Thank everyone. year. morning, Cigna's you, discuss XXXX outlook for the Good I'll David. results third Today, review and full quarter our

$XX.X businesses highly our breadth financial year pleased capabilities our million in adjusted against our a confidence earnings with and year-over-year of highlights of and disrupted consistent During Key the of per we're quarter execution our prior been representing with another and than strong delivering full for third the at results, XX% of where earnings environment dynamic, portfolio $X.XX. growth. include per outlook has commitments. of consolidated and our $XX.XX, of revenue least quarter adjusted diverse year These share XXXX results, more reinforce combined highlighting share

investment and deliver businesses, $XX.X quarter with Evernorth. growth million XXXX the turning ahead business to first to grew Specialty Evernorth driven continues to billion significant growth $XX execution VillageMD despite Now to Services pretax came a to our of Evernorth comment dividend. segment related the of grew Total our absence expectations. by third adjusted strong earnings the headwind quarter. $X.X particularly for results. revenues slightly billion, consistent within and to in across X% results, I'll third This income on net our Care

the therapies Evernorth positioned these execution and patients to of navigating assist pharmacological results more biosimilars, Our continued our well market needs, trends. strong introduction availability trend innovation. is reflect the long-term ongoing Evernorth in amidst the of rising clients new and of With to clinical

the $XX.X and acceleration Evernorth, revenue growth significant XX% within when Care both year-over-year the in Moving businesses half to quarter, Services million, XXXX. and grew first our earnings in Specialty $XXX adjusted of of billion of to compared a

contributions of quarter, more businesses strong across expected expectations, Specialty rapid growth this had reflecting driven Specialty we in was medications. by While the above performance our uptake

we patients HUMIRA increased of biosimilars. also quarter net eligible adoption lower through Scripts approximately saw costs clients from And the of biosimilars. quarter, HUMIRA as Additionally, out-of-pocket increased the benefited adoption X/X transition as through both lower The well costs. benefits in to

in and delivering of innovation long-term have highlighted, As in we experience in given the the growth are market, we pipeline we space. confident are new leader profitable specialty the of drug decades and the our

the adjusted growth differentiated income solutions. conditions. to headwind, continued expansion a accelerating innovative fourth growth while clinical and and customers absorbing to also in demand posted As revenue billion, robust drugs our and earnings and we continue established we've even addition by for results net high-cost aforementioned $X new existing of increased slightly with business our model proven our of the patients, complex above continue differentiated the relationships products value outcomes to to expect services driven wins, new as and quarter. capabilities Pretax Overall, through benefit Evernorth superior for business delivered drive clients. expectations affordability investment Pharmacy

Cigna Healthcare, in expectations. XXXX billion. earnings billion, care and Regarding The was $XX.X care ratio medical were medical quarter were with was ratio Pretax revenues third adjusted the line XX.X%. $X.X

year. priced we the and into coming for discussed, trend planned As have elevated we

of health demonstrating This to the Specialty business well-diversified steady consistent observe in higher tailwinds specialty Evernorth, created results the growth consistent Care elevated company highest did to dynamic execution Healthcare we a in the balance medications in delivered position which quarter, we the our is within Cigna environment. and During trends Cigna saw and book. quarter, we in speaks solid care. Overall, volumes of with our this Healthcare in secular our portfolio, some intentionally for our

our Now turning outlook full for to year XXXX.

$XX.XX. of diversity confidence Given expectation consolidated and at earnings our the year of per strength we the full least XXXX to share portfolio, have for our adjusted reaffirm

in each continue strength continued for expected increasing platforms. of the our Specialty of volumes XXXX of biosimilars well full new driven advancement expect year HUMIRA of is the offset Evernorth, least earnings billion. Moving This by in In at net investment income. fourth of $X a by as to adjusted This earnings outlook our client and continued lower XXXX acceleration as pretax relationships. to quarter, reflects partially adoption growth we

high which expect the to of Healthcare, to continue Cigna continue toward billion. quarter. earnings to medication we we be range specialty through XX.X% $X.XXX pretax we due least care end For to the the of expect year utilization, year increase the adjusted are full expect maintaining medical now outlook aforementioned full we ratio although in XXXX fourth of at And our to XX.X%

impact be We higher as the within offset by such the efficiency. to of Cigna MCR fourth levers Healthcare, expect quarter operating other

strong asset-light would Turning flow to to sheet We cash attractive management flow due XXXX and quarter timing-related strategy impacted generation third that I operations. position. returns cash delivers note in our from our remain confident capital efficient capital. items on balance our that

up and We long-term a our in are consistent flow capital cash step in meaningful framework. remain fourth our with priorities anticipating deployment the quarter,

share of October $X.X XX, stock the Regarding including approximately year-to-date we XXXX, alone. month our of common have in XX.X shares October for through repurchased repurchase, million of approximately $XXX repurchase a billion, million

additional fourth business. the the in quarter, and confidence repurchase to in our share demonstrating our sustainable strength continue We growth expect of

share to growth representing results on us long-term give of deliver higher average over growth outlook our range. adjusted first at of EPS $XX.XX, adjusted recap. of toward target Now XXXX to Strong year full per the year-over-year XX% X confidence through our least year end quarters the the earnings

call. earnings our mentioned, David to forward providing quarter look outlook we As XXXX our on fourth

of prudence. EPS at we testament consistent financial our approach team, commitments stable growth. And the in to Q&A with sustainable historical where start positioned that, appropriate call. of the value our it meet competitively strong another to our long-term businesses a executing confident portion we've clients drive for and ability over of and to to our is customers growth least with differentiated XX%, year year turn and consistently strategically with complementary portfolio operator our for the for the The delivering are We that we'll of

Operator

first comes Rice Our with Instructions] UBS. the of from line [Operator question A.J.

Albert Rice

if to X ask were that obviously a you Again? things situation just the And but for this flux. in I year, is for one are? out you them VillageMD, of market. Obviously, pivots -- particularly -- important about care you it year of X One, putting I'll bit had any you on able if long the all primary said little Maybe in here. at elevated working commercial you is trend of the from how Evernorth the could a to price is for wonder more that is then same? 'XX, approach I on getting respect the ways that it. company out physician know it assuming you care you the Are overall any the are considering I and and to with anticipate there's look Evernorth as early that this place taking groups, address employers something date, wonder with strategy. strategy you primary laid pushback

David Cordani

David. A.J., it's

first where provide little care go our and trend and and value-based Let 'XX, here. we 'XX then to a I'll me color on ask your Brian strategy Village relative to from question Brian? take and specifically

Brian Evanko

A.J.

to as said, target from Cigna nearly includes MCR. is well currently So earning of And self-funded, go levers business U.S. strength as for Healthcare. That employer we're operating That ranges beyond the performing employer here or a which U.S. position continues first book XX% with XXXX. book our is we've peer ASO strength margin employer of within us. that a perform been well in risk-based our U.S. reminder, business within very pleased our our the off,

environment to competitive employers, market, the we point but with As this the environment. as it pricing your to we relates on rational, strategy and own in disciplined remain external characterize our

rate trends it above As for and what we that than XXXX. are relates to expect greater we we're historical to elevated increases XXXX XXXX, cost do achieved in levels, pricing remain

expectation, firm elevated margin levels. the as Given well that to our trend cost desire environment competitive preserve our continued as

you over it the David, to about I'll turn Village talk to So piece.

David Cordani

Village, the talks question about to you a brought A.J., Sure. so part of relative your strategy.

care ultimately and VBC, up improved foremost. stepping and view to of leverage incentives, from first overall clinical that. drive are deliver those relationships, care So and done relationships, we day resources our that's relationships of quality evolve. leverage day forward align capabilities of and value-based Cigna how point that platform, value. Within then Those continue for Healthcare and is in, information our we do extenders leverage out in to are relationships collaborative Evernorth's partnered Increasingly, accountable some support

care the of in disruption timed. adjuster ] the to relationship, outside of disruption sought accelerate accountable through for Evernorth Second, and those side proved on [ equation. risk lives And of that patients flow given the program relationship the within to benefit some cash of be specific VillageMD that and chassis in hindsight, underlying the marketplace, to that, the were the we some our timing of investors from poorly to disruption the the including our

Evernorth, care with we where Evernorth relationships to would from meaningfully that forward the an and Moving I probe can very currently, how and to risk progress in by on grow will but care health a path the even relationships good caused professionals change specifically adjuster to paced do Evernorth disruption, of the the CuraScript to we again, continue relationships continues that identify take note environment. will relationships care with accountable make standpoint, deepening given our capabilities expand though off accountable continue out we of the continue meaningfully,

Operator

from next Research. Our question comes with Wolfe Lake Justin

Justin Lake

I your around First, rumors market. comments there some the the of out on, up and want follow to deployment David, in capital

repurchase proceeds, the you miss also you capital the or predominance going you year do discussion, had lot saw I talked time talked -- clear, a we you Are majority are what's a of the saying to on the that. a share deploy just share some and us, about companies Specialty? talking XXXX, well? are in we'd the also XXXX is And which be well. in you us any other as business, where forward vast then And did on to There about going the capital repurchase you of about this talk of you think few repurchase last to color going more you going as The do can the What you share can fourth appreciate. or you driving that? kind -- that on were specifics give you that been have to in has been significant. give -- about Just quarter,

David Cordani

it's David. Justin,

me think to Let take question, ask give Eric transpired broader I what's to your I'll then you, first your in and space. second relative question is Specialty the

So do first, question, and communicated. part we the so. always quarter detailed of your forward doing not on comprehensive to specific call We'll guidance you provide our didn't provided XXXX. look we fourth anything guidance We've as I to miss for more

Second, moment. the and stepping for step prepared maybe wanted to ensure as back the of disruption to my ask given had forth. I'd and noted a space, remarks, much put that reflect clarity back, information in I as in we there we out the

we've fourth on quarter. If that you done, through in repurchase meaningful month been to your repurchase XXXX, has the actions share in our the October about both think expect the it to reinforced continue what to of which a repurchasing core and of question, I and Brian

of we strategically generation of If about That that capabilities. and did We $XX last you portfolio our harnessing and the benefit of context asset-light was flow X the were we've combination. as leverage we broad on our reflect back right? repurchased the the cash guided as of have the some divestitures years, stock, within billion

capital. Eric, a to talk So the comprehensive you to ability create I on to would value XXXX tuned the reflect capital shareholder space. steward deploy our and being real disciplined way more guidance but ask good of about you track record sustained ask the demonstrating Specialty in stay for we I'll of

Eric Palmer

David. Thanks, Great.

Justin, Eric. it's

model, at a in condition-specific As And space, our leaders we're year, find by billion market this growing. we market $XXX and Investor driven the our employers, this systems and is earlier Day our board, Specialty positions clinical reach. health whether health the to overall to across it's our and And well our the expertise like. plans, be helpful clients this us geographic focused

factors the meaningful in results to quarter But be the new of Now past that biosimilar growth We've as expansion given the Accredo. our strength had customers, specific market at to we And the depend on. this available these some the therapies any new to going [indiscernible]. volumes, call annual we for choosing of XX% as all over of being this expect for additionally, so is clients particularly the therapies time, I'd strong our And timing quarter. first we enterprise. quarter, conditions, new business built part and inflammatory full and are move And areas to sustained to on had quarter, in growing respect growth our Care Solutions X% where to into talked was our we to we've quarter space neurology existing about With Specialty this with of noted basis. oncology with in and a And assessment well. there. XX% the volume broad-based more out the growth in on a dispensed

quite well patients. to to serve positioned continue be we serve market the the our and opportunities and So to excited market in to grow this about

Operator

comes question Cowen. TD Langston next Our with Ryan from

Ryan Langston

seems had given lives in the EnCircleRx I couple prepared remarks, million program. My said understanding -- That only the of growth risen think that is strong you X ago. just million about you of the just I on seems to was months now do months, X next what's X we up I that's couple driving moving see couple it of past demand. And like dramatically? years, in incredibly the over say guess, I million only a guess, only pretty where and that pick that?

Eric Palmer

question. the Thanks Eric. it's Ryan,

affordability help about can And there's conditions the they're you think market. looking solution of interest is really in we're for David bring our We're clients noted, kind million I almost imagine, real overall. its As first these opportunity the said from GLP-Xs to to X managing of and you need this with the as excited lives. at

enrolled population, So it they about approaching to working ago. And right months we've to the handful We patients that relevant and there with a clinical provides make a make overall that to the program results, provides you perspective of far launched not working guaranteed maybe but patient help last, well. support a is the savings and are who yet just return not previously, in reductions for changes targets report comes solution as markers clients investment the rapidly. share? other this Performance impact data, and are significant talked the so it our we'll engage program. those want in bring the quite early clients we the strong clinical to more need enrolled. our mature to mature or process to here. David, trends the compared the have as They're any The seeing is

David Cordani

Sure. amplify Thanks. X points. I'll just

As of we in in top with typically the significant X, X amount is This a a topic X a brokers, the with others field-based with time we're with all and consultants organization. clients, spend or market. market,

in absorb So are piece as are the the specific we add, and observing though, X market The on center. maybe I for stops as and the observing stop of and clients start maybe which stops transpiring patient patients, that outcome starts and generate up a dynamic noted, GLP-Xs remain is and physicians front intended observing challenges months to regimen the or well. would desired a as continues some is and doesn't the and also affordability, then starts also is if market then

the coaching -- exist underlying support that behavioral wrappers, really are care the the resonates wrappers, the clinical proposition value-based really program. relative to the the folks in nature care So wrappers, of wrappers the value

that underscores you is the lead market. it and growth treatments to because it significant the out as need So calling new innovation come these for we I appreciate

Operator

with Gill Our next Lisa question JPMorgan. comes from

Lisa Gill

a update some follow-up, that highlighted report perspective looked anything or a David, you're few selling contracts change are going XXXX as Can just you that there seeing using thinking professors they're are the really maybe how the we around talk and you Chicago economics And of as then biosimilars, things. I'm the this Is legislation? One, University on at. on side? FTC have about when from a the we legislation seeing of XXXX? curious potentially of potential state season in the the more just report information any PBM into about formulated a is

David Cordani

David. it's Lisa,

me and FTC with Evernorth Eric start your dynamic then I'll ask the to what's season, selling the question. and PBM transpiring address Let including

Eric Palmer

to the growth to is start with innovations affordable, how market growth back, for to to continue the Lisa, And we do about clients. to David. we our benefit that. work innovative programs. and the offer Evernorth support talked continue just to of new positioned bring and And Thanks, those to solutions ways choice equipped We The to grow. and to resonate. have we stepping fundamentally, in strength patient innovate our continue pharmacy to a portfolio work flexibility more that's the EnCircleRx, our accessible we to and well in as we various continue make

good in positioned year for specifically EnCircleRx, Now with retention XXXX a years recent consistent services had pharmacy whether benefit high it's season, recent with our oncology be to in selling good continues examples. and we driving percent benefit business the And We're to another services XXXX. respect XXXX, mid- our for are range. the rate we're meaningful to XXs just innovations,

again, purchasing say call out clients but any our actually best our I'd as change, discussing going financing David? align services, or and with clients' I are terms there's in change needs, are substantial wouldn't wholesale customers what what from to arrangements interest us. in far what good of As

David Cordani

back toward relative just really pull is the of to end I let think moment. a the but for This your FTC, question legislation, me pointed

clear. value new more the range. treatments through to it's as being even to real, are and it coordination Specific the plus were [indiscernible] we access for you of we've look deliver, services that foremost, the assertions chronic be are through industry historic with on talked range. And that deliver in about, and patient with higher market EnCircleRx, biosimilars, whether secondly, to the XX% improved mission-critical. especially population. client innovations our And year the that continue which the ahead we right? extremely well, polychronic space coordination to know value service and more and differentiated in unfounded benefit the the critical put end PBM coming generics, that retention as ability report, the retention We to sustained at market expanding our FTC me affordability, exists to let through of levels pharmacy that First create XXXX, with lead value validation client a really forth. and levels And to reinforce as clinical programs, disagree the through through is especially

put in to will the going direction Second, direct engage that Carlton's Dr. report forward, contrast in clear by And was forth we is that. fact-based conversations.

remain As in engaged. I remain there's it proposed more that. Obviously, of year. it bit to a we in a time to that Monday of topics. no forward. not doubt relates We do this legislation on right put relative Washington legislation, specifically see We like the variety was specific on left There's looks any week will to mature to value, fully actively be now pharmacy service proven durability actively drive space. our the make most our confident in as in deliver engaged. it capping proven to grow But both as well at the ongoing of and we sure in specialty continue off, model, ability partner, space to able I innovation ability the our the think importantly, benefit are to we're

Operator

question Andrew next comes with Barclays. from Our Mok

Andrew Mok

core in out release, give PBM like bit magnitude of both will planned and on you investments Can little called XXXX. and it investments? sounds nature into more those continue the detail us across You a specialty and that the

Brian Evanko

Brian. it's Andrew,

have a So to reinvestments. discretionary any as capital our fair amount internal into do year, in goes we intend we back that of

framework capital continued also returned when being core deployment So just the a our Healthcare, shareholders. part in to Cigna investment the in but in about of about the business, we capital we not Evernorth talking platform, start talk before that's

call billion above expenses, in $XX the tracking numbers or it, over kind billion so are round which of So this the about administrative to, that core $X.X and and of year, discretionary year. we we're spend CapEx, that's

technology go customer going technology. some So most of forward, of toward so that that will patient-facing that

is or of field-facing and Some broker is of that a technology, that well. some provider-facing as technology

we So the example, long-term you majority a We single-digit that And think rate. the relevant. type capabilities as specialty high about the to our CapEx is $XXX in already headed think in more for secular about billion at growth we addressable growing direction. have, make market even when of opportunity the ourselves is which there discretionary space, strengthening see opportunities continue to our

gear in and or think So primarily down any up technology, given we that it of as year.

Operator

Wright Stanley. comes next Morgan Erin Our with from question

Erin Wilson Wright

dig the biosimilar seeing like strategy. a specialty bit more. you're into HUMIRA to It sounds wanted the I traction just with

I around the expect HUMIRA and like other that how to an the would just years with saw XXXX you the in pipe? ramp perspective. the terms the you STELARA Just over are compare do opportunity think you guess, down several relative STELARA that products from but strategy that cadence coming and to next LOE also you with of biosimilars about of what how

Eric Palmer

Erin, we deployed the biosimilar that it's we've Eric. back, I think in another choice that Stepping HUMIRA appreciate it's going model the the we're our situations to that has provided replicate market, forward. well positioned good around in I and here question. one built we've think the and appropriate

this And noted to choice of accessibility in them market patients our need affordability mentioned I of launching market. medicines new strategy example no plan bringing in nearly into this the his terms X this improve them. that remarks, the Investor help affordability could using look year will as we Day David a of the that that we XXXX. the at the and these half years. We've and And to is and funding the specialty alternatives available earlier biosimilars the of As additional for be sponsors a STELARA us ahead for we biosimilar in see having are prepared cost alternative approach out-of-pocket coming to envision will playbook that for

of and solutions a that. adoption we bring we level, we're macro of did process a do the of at different to the of kind alternatives, served therapy and based the and like really off we'll of will biosimilar of availability have other off and with every well in like different just clinical will paths positioned being with with after break products like the patients to coming market doing drugs based such. different of needs pace continue they are to new the HUMIRA, lead So in this market have of STELARA David? But

David Cordani

pressure against equation. the a is to Accredo provides just the this about CuraScript, elevated Eric's medical to think case, structured cost which Erin, industry natural well in obvious, to when we of through specialty us specialty market nature point capabilities, natural side the some statement that or of high-performing and also manifest itself as a hedge as both medical it's the the you X could in cost I a through of maybe in benefit ways, the seeing on comment is of relative sense, add to our pressure broader specifically, environment in the operate want an but

growth with we've this way conscious in diverse structured it side inflationary when asset-light highlighting different pressure the provides and we've markets. We've corporation, talk opportunities framework. value So hedge structure obviously, capture the natural also portfolio. some side, the it, manifests or also on an when we But structured other about utilization structured pressure addressable it very on provides one of opportunity our with case, the

wanted that. to punctuate So I just

Operator

comes with Stephens. Fidel question next from Our Scott

Scott Fidel

trend in Question just as in to exchanges get inpatient an to on what perspective expectations we side, seeing recently. on landscape the number is just on the little bit, try of side us same-store negative exchange just then the you've give to analysis that one, there in want CMS maybe update if for for looks do environment see like X-part the terms could well for in or if carriers actually your be It of cost do from rates of been major I a plans XXXX. would the And our the did relative drill data a a you competitive the with I their XXXX. federal could

intensified competitive framework seem the has quite does a bit. it like So

as well. that right now And in so I'm interested category on market perspective certainly your

Brian Evanko

your Scott, I'll here. both questions it's of Brian. take

most uptick notably in range that a that trends reminder, So quarter. And that performance earlier. began within to first the saw to noted and levels XXXX. quarter specifically, the I some the we to And within delivered in quarter utilization as cost another XXXX overall was of in offset for had continue Healthcare some initiatives saw affordability where And with as particular. mentioned line we of we overall and solid expectations, in had planned off, MCR, in we pleased surgical deceleration had a I specialty in utilization Cigna be have performance we're drug to elevated price MCR just the throughout to beneficial with activity in it proved the the

was about with our inpatient. asked the Inpatient in quarter. broadly line You expectations in

I within an area we're as the the or the hedge at particular demand favorable our natural elevated saw for specifically where resulted favorability. David to the platform. in fortunate So as business, And of services wouldn't customer that level Evernorth hotspot a specialty performance have we enterprise drugs flag in said, care specialty the and

margin to important been individual As to XXXX, U.S. in system care market health us, so a have into since focused expected carrying see individual an being went decade the government-sponsored is exchanges, over been continue expansion it compared here past but the in for business. XXXX this that who in margin a those largely access this to with And effect. or we higher approach XXXX ACA coverages. We've for fewer And consistent playing don't profit customers of our employer the to we subsegment on has exchange experience. as our year a as out profile relates player market the

function the and look noted, growth annualized relates geographies. when we the company over of those on competitive a it of based behavior profile volumes XX% together, for into and a As this customer low weighted to our taken And there's to for margin variation different you business, will time, exact here. customer growth a invest in in to base average of on that. geographic considerable you to available competitor publicly specifically, the be rate geography But the mix and end XX% as all information continue double the forward is engine us, in the by the see which for as each set. That digits, increase XXXX, higher it dig said, is

Operator

America. [ next question Our ] Bank of from comes with Ron Adam

Unknown Analyst

to that Advantage Medicare currently managed own the from was Part the company. mentioned I has But you increasing comments. into also guidance. that D the wanted specialty I reason still know the That side, do the you also MLR that business. And you're it care dig your

you the it's seeing at side. pressure driven side and And that delineate like commercial Medicare so the could IRA the you're you wondering Medicare And on all? the if in being think if side, the by specialty between

Brian Evanko

Adam, Brian. I'll it's start.

want If pile colleagues on, welcome you you're my to. to

neurology. relates as resource really, Accredo the we utilization it to that was And uptick do the Specialty meaningful third centers individual increased the therapeutic were the And experience. commercial, it amount of Employer, volumes quarter. quarter. product Healthcare from what particular, we the in root see Specialty side, in business the more we drug in the quarter third transpired and the inflammatory with not to exchanges. earlier, and as Commercial the In Evernorth oncology enough we across benefiting all those and the on natural saw this really I said conditions, it Healthcare I'm our IRA Medicare not elevated but most than volumes So Cigna in hedge across pleased broad-based different driven have Cigna in would of slightly saw The as a Medicare flag is the cause, lines, having having a

David Cordani

year. Advantage question, of your Adam, for our line would but performing opening business Brian, Medicare And of is, the thing expectations in noted portfolio only as the the comments, by I the course to large, and is the with our add in our out broader build plan as we

So Brian's is in on the elevation there. margin reference the terms of

Operator

Bank. comes Our with from next Deutsche question George Hill

George Hill

important call, the -- long-term with, of that strategically the on come market. a to opened Advantage challenged it's And want lot your saying a market the MA a market past, in of of Medicare you is comments with kind that value. you call I you're is on kind which this the David, up back to said

you where So my first, its those me then help challenges you I you as the guess, between thoughts? of can And the bridge participate, number look of do gap structural? cyclical you that given one or you from lines as kind at still X guys see is sit, market

David Cordani

the environment, of drawing see fact, in from comments an of currently standpoint, offering your societal view, future, part relative current our we the a marketplace. point a to and marketplace back are to of important George, statement the the broader my view, as given the to MA

would it very clear. be So

be marketplace discussed that Evernorth consistent grow fully again, and today, draw behaviors they MA products services flow government-sponsored of product invest we've programs in drawn our the face continue approaching the share in I and the back actions our our of Secondly, great we said programs, using to going is and very repurchase. our the for all on and and within discretionary we disrupted were services. What our supporting against cash were what programs free to as seeking off and of into will programs, portfolio we are are and specifically headline those before, and was, X/X inclusive MA to given the to that disruption with marketplace clarity was

see elevated albeit to to find now Significant footing through marketplace the again, it's expect Looking going stars. for MA before, forward, a medical right choppy the I go its phase costs. forces about I would talked reset the

when down was gets is reset to XX% marketplace lives So plus if the the of part XX% lives. the you look for had program in of back, large quite there risk a also plus adjuster that all of X-star coming through a The time marketplace. meaningful. resetting almost plans That's

as is better serves leaders call what importantly, a that's and a value prop life the the income So better a way in now, transitional from and right coordination, in find overall The clinical a life will life clinical attention choppy marketplace On I very standpoint. is through getting for supportive MA average to we're going to. lead it and affordability. societal in MA marketplace. is MA time trying just an of space MA lower through And value on average efficacy The to deem important be to average, an this.

Operator

comes Our next with from question Research. Nephron Josh Raskin

Joshua Raskin

Advantage clarity David, XQ, get this second particularly wanting heard A the in in quarter, I those. here. I your Should you there to the of guys the that on leading space quarter. to a in specific the you areas it understand the one, the strong drivers assume to clarity XXXX? reacceleration into any sort this was that keep and first of of you development, cadence now where But XQ. in in just and want better? relatively little question as strong harp noticeable business Justin's terms need in talk is buybacks on Medicare of Could buybacks, we And smaller in possible. response were I'll were around just that have the or on what's the understand topic and in a So larger then I'll came pause to and as much development you just favorable to disruption that

David Cordani

it's David. Josh,

your Let me second of -- take driven then the take flow No. the your call cadence your part of questions. to specific by Brian answer buybacks first cash the question to question, timing. and the our is If ask

So the doesn't course flow, past, and our the that throughout you'll year. ratably note in the we've cash highlighted happen this of

the part toward year, deployment and early expected of to So year, expect capital. the we the significant we to have of part significant capital deployment have latter of of

I repurchase part highlighted we through And flow deployment free to is cash of of October and timing ask the timing will specific be share quarter So active thus in us. fourth you can we the high a of the quite flow far. Brian, generation generation question, flow to noting the month for marketplace, the of cash that tied cadence the to second in are your the the cash fact of quarter take the the question?

Brian Evanko

Sure, David.

which appreciate, client overall, And MCO the a tend see just as to in see [ in in the as one year-to-year, or the variety Cigna quarter. rebate reserve other that's development, of was in to translate And income you Important quarter-to-quarter. of would typically any development fluctuation of significant prior P&L But it Healthcare like we and prior given was a factors we impacts relates period, development the to Cigna not bit we gross the in can third driver ] period the a year that net reserve the items. for to a MLR from in sharing, the saw that, third third quarter, year mind effect net Healthcare development than higher it So impact, given quarter. keep doesn't P&L little prior one

the I So questions. . appreciate

Operator

Our Bernstein. Lance with comes next from question Wilkes

Lance Wilkes

and broad cleanup of a question. Just questions couple one strategic

that stability how cetera? management capital strategic the about thinking management board of level, moves, at business from other stability, of at as On as employers there criterias things or And do important market, you whether a for? certain given behaviors inflation, in inorganic they're be should different look a level seeing shift And of et with premium of? containment you items over to are the are just you're types that's volatility and we deployment aware to you're model, the features and from looking are respect ASO looking faster employer cost little high

David Cordani

Lance, it's David.

strategic take take ask specific me criteria then M&A question your Let to your and to Brian follow-up.

come a see attractiveness. your question, miscleanup. painted third our And then about I is is And second path You remind financial to moment. close. But to changed. that the not back is clear find core question, criteria, need M&A you, alignment. first which your step our think to strategic a you to back is Then in has criteria to if a I'll our and that of interesting. strategic specific

EPS financial As attractiveness, it accretion. into relates we take consideration to

of, timing durability the of, the of. the visibility the So of, level

on basis at also a it. efficiency, We return in look capital of terms assessing relative invested on capital

the that. beta more core a durable beta. higher capture synergies, less visibility to stable a heard value the of your the to correctly, Increasing or requires a So the asset if question, would increase durability you environment disruptive highly and of I

to consideration. period of So course, taken track you're we of the be the further to value good creating capture. a have that versus transition for long time. Brian, applying of adjacency very I to record predictable value you? And have and consider clear, has value into these and I'll adjacency a is, with, strategic versus over volatile believe your criteria shareholder stable and strategic question And of the I'll because more end looking we core creation and more

Brian Evanko

question when is the higher our things Affordability cost reacting from few we the topic to now. talk buy-downs, strategies second how are there terms are look to a employer portfolio. premium more a U.S. maximums Lance, more clients. precise maybe of And trend becoming and Yes. environment, at But generally changes benefit in employer #X on deductibles and employers they contribution historically, the granular to changes. highlight out-of-pocket

more and the our help and more those appropriateness clinical seeing example, all in spending an programs. capabilities, pharmacy specialty as we're of EnCircleRx programs mitigate So GLP-X like to interest ensure

So the been trend category. about year. cost started, has we're a seeing interest capabilities. mental the Since in and a of interest of this more contributing pandemic even our precise programs. We're just health in substance And employer in X% these affordability this to seeing year, also higher cost lot trends it's

network there's has So And we metal have then that configurations interest and finally, line. mental services down in to help as what that health in health, shown, alignment. address the and link programs the as been physical between more interest incentive cost, to health there's optimize well physical which needs quality deflects precise utilization available provider

our so offerings, Healthcare high our address trend those a Cigna increased are And So positioned all employers things program, things all offerings things taken Bone in those to are like interest Pathwell together, Specialty Joint like to of environment. our Pathway themes. & well

Operator

from comes ] Baird question last Hop Our Michael [ ]. with [

Unknown Analyst

question, you confident then maybe XX% to think the third X/X of most over biosimilar prepared believe I I 'XX trending out are flesh both third mentioned which of maybe see is approach now on providing that for bit to your adoption, that in that it. year? Firstly, especially EPS which quarter? Where growth to growth, last more is share, you and Where wondering I quarter, you following by going XX% did. path do and year-end a has about helping think HUMIRA know help those a your year. And earnings in up Evernorth's quarter. single-digit on at last into just growth share in that high list and biosimilars blocks trended quarter about it specialty as I Erin's then I you headwinds rose you quickly was remarks. of you next if biosimilars drive building or tailwinds, on thank that of terms biosimilar to to different eligible which your next in perhaps could specifically, And XX% you least book

single to going we Evernorth new from digits officially So I where are it forward, wanted thoughts we get sustainably how spot high biosimilars? your contribution of of on are sort a paradigm now grow can in now earnings that in

David Cordani

David. it's Michael,

for lot short packed You in begin there topics. a close our call to in to us bring to a order, important but

growth give let And the talk Eric, it in first, headwind and to frame just So it me opposed specificity. which back, the see over XX% little a to that although then the Brian X% me to a secular we of above will bit to we'll don't transition cetera. the time, shift more to peel the think is we're tailwind. will declaring a as tailwind headwind compounded about et to normal new then relative trends. But trends the who let trajectory bit ask in direction, framework back I you business

As we I provide we guidance noted in do. my fourth and in as detail our the always more call prepared remarks, quarter outlook as XXXX we'll much provide

several year. differentiated the want to And yet this and which taking a be with year. be come you confident outlook another of strong year to going headwinds our be differentiated the strong XXXX, our Importantly, algorithm stress, And and of for and lower all and say forward competitively and growth highlighted competitively a will XXXX we off of would year to will even them we prudence. XXXX, we step for will as this to end point, posture algorithm we're that tailwinds at intact put guide together, our at expect is range

could So and bit a some color I and of within more ask to on Brian, the headwinds tailwinds give dimensioning? drivers some little the you

Brian Evanko

David on Michael, on maybe more detail X you earlier give outlined X tailwinds little a call. the headwinds the I'll that bit David. Sure, and

that's we the we in delivered of tailwinds a XXXX. X continued degree the XXXX, for of being terms see morning biosimilar is been theme confidence in a high So Obviously, in do adoption throughout one. here, have and that

client relationships. we Obviously, in sizable PBS client we large very advancements had new in Secondly, a our expect 'XX.

also the be We then think to single-digit those sale the headwinds recent the we've we that know proceeds. accretion at percent see given of primary we have juncture. on you about of we in tailwind from by EPS this, the others would proceeds. And that of magnitude impact the is expect deployment low That's years. third a deployment X EPS when And Medicare this this XXXX onboard offset

is first the dividend absence of VillageMD the The XXXX recognition.

was quarter. made earlier, $XX that third to So as reference in million I the

You obviously, the segment $XXX XXXX enterprise. headwind annualize income a that as, of It's out. the million as Evernorth for about well to

Secondly, the million teams Medicare And see Cigna half million and from can divestiture, headwind we'll depending $XXX half $XXX obviously, growth, that to but think as that finally, I needs And overhead of about long-term continued for roughly on and that at we whittle the work our over between as will question, have for balance that as some you down earlier gear investments gear short-term as or made split 'XX. opportunities will then down year. we stranded that for an Healthcare is up for which currently see about long-term reference company. Evernorth. to the the we and And time, market

can Eric, here you the question? pile on of So on biosimilars the part

Eric Palmer

July, -- XX% the we across that's about on, and The throughout or notes had Brian, the couple Thanks, had at of that to customers entirety provided I end HUMIRA. HUMIRA noted clear in eligible about for patients respect achieved XX% just quarter about biosimilar a Michael. call began June. a of And month of its in to be our in HUMIRA, we adopted. the elected of that throughout use to of wanted the third second spend now quarter was biosimilar our With had the We to the today XX% thanks grown the quarter. question, number

we've continue growth we question, now, see X% patients a grow up our lined So play over medicines minute. they several deliberately quarter. positioned the March, just overall. need a positioned We At in have balance the for that Evernorth top to for with for and to the increased these expect leading in our be the forces innovation ourselves to reflects benefit more long-term to I'll our we up there. of well associated to noted year. And back of and macro that Day to of nice role really value company all And to end step back that we've X% as Investor range to throughout growth the the again growth, would of customers our and to bring years capture and to connecting We're pharmacological position to worked the clients with your dynamics.

forces I Evernorth positive launched about a few the fourth think that we're growth that's just are health meaningful the same, continue we just years opportunity ago, that about serve ability a the Evernorth time excited affordability patients this since of the was have on and so we we've to overall. grow to increased of influence And the the trajectory and talked space in and positive the the care to

we're leading about the So positioned role here. play a excited to opportunity and well

Operator

I'd back Thank remarks. the to Cordani David call turn closing you. like to for

David Cordani

your today. wrap engagement on call our Most your questions, I just importantly, and briefly want to time your for thanks up.

Group Cigna headlines. and in track of we're again, business for and competitively few differentiated remain momentum a once highlight third growth least $XX.XX, to to XXXX complementary strong on track year and platforms our outlook at EPS XXXX. a our we another deliver on delivered Just given quarter,

what serve. trajectory want Before and we It's third we full leadership look that we the have talking day. we the in have in, colleagues year, of a Have that world caring to a the and privilege out to proud those the day quarter We're the and their to the for great future. orientation day our for accomplished you forward focus, we've around XX,XXX what in I commitment I fantastic close, team. thank to senior us allows do do and

Operator

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

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

now disconnect. will We

Cigna (CI) 31 Oct 242024 Q3 Earnings call transcript