Industry growth and innovation was a key focus this week at the 2022 J.P. Morgan Health Care Conference, where Cigna Corporation Chairman and CEO David Cordani, spoke with Lisa Christine Gill, head of U.S. health care technology & distribution equity research, and senior health care analyst at J.P. Morgan, about the organization’s growth strategy in the context of macro industry trends and opportunities. Following the conference, Cordani also spoke with reporters from CNBC and Yahoo Finance.
Cordani opened the discussion by giving conference listeners an overview of Cigna Corporation’s high-performing U.S. growth franchises: Cigna and Evernorth. The Cigna health plan franchise consists of the company’s Commercial offerings, which predominantly serve employers; and Government offerings, which serve individual consumers through Medicare Advantage and local market exchange plans. Evernorth, is the company’s rapidly-expanding comprehensive health services organization serving employers, health plans and governments with pharmaceutical, behavioral and virtual care benefits. Cordani noted that each of these businesses have attractive growth opportunities in front of them—both strategically and operationally. Most importantly, these two entities are a powerful combination.
“They provide leverage back and forth to one another. Evernorth is a servicer of Cigna, and Cigna is an innovation partner for Evernorth, which helps to evolve product, programs and services, not just for our consumption, but for the delivery to our large portfolio of corporate health plans, governmental agencies and clinical partners on the Evernorth franchise.”David Cordani, chairman and CEO, Cigna Corporation
Furthermore, he noted, “When a headwind blows in one business, oftentimes it creates a tailwind in the other business – enabling us to continue to perform.”
The complementary nature of these businesses have generated meaningful results and the company is poised to deliver on its commitments to shareholders, despite the volatile and dynamic environment. The company’s success in 2021 was largely attributed to the global workforce who rose to the occasion to meet customer, client and partner needs, along with a broadened distribution channel and accelerated pace of innovation.
Below, we look at some of the main takeaways from Cordani’s discussion. Some quotes have been condensed for brevity.
Pharmacological Innovation to Drive Affordability and Better Health Outcomes
Cordani sees clearly that pharmaceutical innovation is a critical driving force shaping the future of health care. Citing recent innovations in new FDA-approvals, specialty pharmaceuticals, biosimilars and vaccines, he recognized the tremendous societal opportunity from clinical interventions that will help prevent, treat and cure a wide variety of conditions. Yet, he noted that these innovations create complexities in how consumers access these therapies, safely and affordably. This is the exact space in which Cigna and Evernorth are poised to lead the industry, he said, pointing to biosimilars as a big opportunity in particular.
“Our organization is extremely excited about biosimilars,” Cordani told attendees. “The United States is behind other OECD countries in terms of biosimilar adoption. It's about time, the curve is upon us, and we are going to lean into it.”
Employers, health plans, governmental agencies, and individuals will all benefit from greater affordability that comes from biosimilars. And the care coordination piece of the equation is, as Cordani puts it, “mission-critical.”
The CEO called attention to Accredo, Evernorth’s specialty pharmacy services business, which has been growing at a double-digit rate. “Accredo touches well over 90% of all specialty drugs that are available, and continues to be a strong performer for those we serve – our physician partners, our health plan partners, our employer-client partners, and ultimately, individual patients,” Cordani said. “And in many cases, an Accredo clinician is invited into our patients’ homes to facilitate an infusion of a particular medication and coordinate their overall care. Those needs will continue to grow and we believe that over the ensuing years, especially with the biosimilar wave that we're about to see, we at Evernorth will be on the leading edge of innovation and care delivery coordination.”
Doubling Down on Coordinated, Personalized Health Care Services
Cigna Corporation’s Evernorth growth platform, Cordani said, offers four portfolios of service: Pharmacy, Benefits, Care and Intelligence.
“Our entire strategy is built around identifying where we can deliver value to our customers with point solutions,” Cordani said, adding that 40% of clients that are using Accredo, for example, do not have a traditional pharmacy benefit manager (PBM).
While that statistic showcases the strength of the Accredo solution, it also serves as an opportunity to further build and expand the relationship with clients through the addition of services that add even more value.
Virtual + Coordinated Care Delivery to Support Whole Person Health
Cordani sees the global demand for whole-person health – and the need for coordinated medical and behavioral services as a big opportunity in the coming year.
The company’s acquisition of the popular virtual care provider MDLIVE allows it to expand services areas into other areas of care. Additionally, through value-based arrangements where MDLIVE physicians leverage Evernorth Intelligence capabilities, patients benefit from a seamlessly-connected care experience, where their virtual provider can share results with their primary doctor in real-time. Treating physical and mental health needs together, in a coordinated and convenient way, offers significant potential for cost savings and improved overall health outcomes.
“All too often, and all too significantly in the U.S., the vast majority of care has been in a physical site of care delivery,” he said. “While we deem that will continue to take place, technology presents tremendous opportunities to deliver care in a more personalized, efficient, and coordinated basis to the individual.”
The goal is not to augment physical access to care, Cordani explained, and to significantly extend access to care. He pointed to Cigna's new oncology program launched at the start of 2022 that leverages virtual and pharmacy capabilities for more seamless and coordinated care.
Technology is key to integration and coordination of care, he said, adding that the organization is able to keep up with the rate and pace of innovation through the work of Cigna Ventures, the company venture arm.
“We use Cigna Ventures to accelerate partnerships,” Cordani said. “We’ve seen a lot of goodness in partnerships with companies like Ginger, Cricket, Buoy, and others. And then situationally, we'll use our acquisition strategy to bring capabilities in-house.”
For many reasons, Cordani continues to be optimistic on the growth trajectory that’s ahead for Cigna. In fact, he said, “We've been able to prove that we have the ability to grow our portfolio on a sustained basis over the last decade and the reconfigured portfolio over the last three years. I believe one year from now the marketplace will better appreciate the growth performance we have and the addressable market and growth opportunity we have in front of us.”
Listen To The Full Webcast
Get on-demand access to the presentation by David M. Cordani, chairman and CEO of Cigna, at the 2022 J.P. Morgan Health Care Conference.