The Cigna Group (CI) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Enterprise strategy and business performance

• Operates two main platforms: healthcare benefits and Evernorth services, each contributing to sustained EPS growth over 13% CAGR in the past decade.

• Specialty and care, pharmacy benefit services, and healthcare benefits are the three core business units, with specialty and pharmacy each representing 30% and benefits 40% of the company.

• Specialty pharmacy targets a $400B market, growing at high single digits, with biosimilar strategies delivering significant consumer savings.

• Pharmacy benefit services have innovated with programs like EncircleRx, now covering over 2 million lives.

• Long-term EPS growth outlook is 10%-14% plus an attractive dividend, supported by a strong track record.

Utilization, cost trends, and segment performance

• Medical cost trends in 2023 and H1 2024 have been in line with expectations, with disciplined pricing and planning.

• Q3 2024 expected to show normal seasonality with more days than prior year; Q4 to moderate after strong stop-loss results in 2023.

• Medicare Advantage (MA) portfolio is on track to be sold by Q1 2025; MLRs for MA and exchanges are in line with expectations.

Evernorth and specialty growth opportunities

• Evernorth’s growth algorithm has increased from 2%-4% to 5%-8% over five years, with most revenue from external clients.

• Specialty business leverages clinical and data acumen, with a nurse within one hour of 90% of Americans for infusions.

• Biosimilar adoption, including Humira and Stelara, is progressing, with over 25% eligible adoption for Humira’s interchangeable program.

• CuraScript and Quallent assets enhance distribution and service coordination for specialty drugs.

• Specialty segment sees growth in gene therapies, with 21 in market and nearly 1,000 in the pipeline.