⌛ Did you miss ProPicks’ 13% gains in May? Subscribe now & catch June’s top AI-picked stocks early.Unlock Stocks

Cigna expects revenue gains from launches of Humira biosimilars

Published 02/03/2023, 06:09 AM
Updated 02/03/2023, 01:21 PM
© Reuters. FILE PHOTO: Signage for Cigna is pictured at a health facility in Queens, New York City, U.S., November 30, 2021. REUTERS/Andrew Kelly
CI
-

By Leroy Leo

(Reuters) -Cigna Corp expects its pharmacy benefit management unit to earn more from the second half of 2023 as makers of cheaper versions of AbbVie Inc (NYSE:ABBV)'s arthritis drug Humira will boost aftermarket discounts to gain access to patients.

Amgen Inc (NASDAQ:AMGN) launched a biosimilar version of Humira called Amjevita in the United States on Tuesday, and at least seven others are expected to roll out in July.

Pharmacy benefit managers (PBMs) act as intermediaries between drugmakers and insurers. They get after-market discounts from drugmakers to add treatments to the lists they recommend to insurers and companies offering coverage for employees.

PBMs typically pass on most of the discounts, called rebates, to their clients and retain some in fees.

Cigna (NYSE:CI)'s PBM unit has both Humira and Amgen's Amjevita on its list of covered drugs.

Chief Executive David Cordani said in a conference call to discuss Cigna's fourth-quarter earnings that he anticipates "value creation from the increased availability of biosimilars building in the second half of 2023 and ramping in 2024 and beyond."

Those gains will help partially offset the anticipated cost this year of setting up its contract to manage Centene (NYSE:CNC) Corp's annual pharmacy spend of around $40 billion.

Cigna's insurance arm, meanwhile, faces a possible shift towards less profitable government-backed health programs due to chances of the U.S. economy's "fragility" pressuring enrollment in corporate plans, Cordani said.

The company forecast a medical care ratio - the ratio of the amount paid out for medical services versus revenue brought in - of 81.5% to 82.5% for 2023. The midpoint is marginally higher than last year's 81.7% and a Wall Street estimate of 81.9%.

© Reuters. FILE PHOTO: A screen displays the logo for Cigna Corp. on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 16, 2019. REUTERS/Brendan McDermid/File Photo

Its annual profit forecast of at least $24.60 per share was marginally below expectations of $24.84 per share.

Shares of Cigna were down 1% at $298.44.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.