Health care: ‘We will see more and more specialty drugs,’ Cigna CEO says

Cigna CEO David Cordani joined Yahoo Finance’s Anjalee Khemlani to discuss access to health care, innovation in therapeutics, and drug affordability.

Video Transcript

ALEXIS CHRISTOFOROUS: Lowering the cost of prescription drugs has been a hotly debated topic for years, and it's certainly not going away anytime soon. I want to bring in Yahoo Finance's Anjalee Khemlani now, because, Anjalee, I know that you got to speak with Cigna CEO David Cordani to discuss how his company is thinking about drug pricing going forward.

ANJALEE KHEMLANI: That's right, Alexis. We know that, of course, Cigna absorbed Express Scripts and has really built out multiple different sort of avenues to be able to innovate and look at many of these topics that we know are pressuring the health care systems and the health care industry today, and specifically talking about PBMs as part of the JPM Annual Health Care Conference.

David mentioned during his presentation that the idea of PBMs, or pharmacy benefit managers, which we have been sort of blamed as being middlemen in drug pricing and possibly being responsible for some of the rises, he defended them saying that basically the way that PBMs existed before are "yesterday's PBMs" in quotes. And we talked about that and a little bit more. Just listen.

DAVID CORDANI: I believe very passionately that pharmacy benefit managers and the legacy of those have created a lot of value from a societal standpoint. Access to care, care coordination programs, the movement from brand to generic was led by the PBMs long before Cigna and Express Scripts came together-- so a lot of value creation.

Two is we have to look at any business, whether it's the traditional medical business portfolio or traditional pharmacy business portfolio-- the change in innovation is ever present. So what I meant by my comment-- if you think about a traditional definition of what a PBM does, most people view that a PBM would work with the manufacturers to contract for access to certain services, sell those services, and then have some economics in between that correlates-- supply chain management and kind of access to care.

Today in the marketplace we operate in, we've moved in a three-year period of time to far less than 50% of all of our relationships having full transparency funding mechanisms to well greater than 75%. And in the case of rebates, well over 90%. So that's the definition of yesterday versus the future. Because what it comes down to is, how do you use pharmacy services to help to maintain or improve the quality of life for an individual?

And we exist in a society where more and more each and every day, pharmaceuticals are becoming a larger part of the overall care equation. And lastly, ending with a concrete example-- the fastest growing part of our Evernorth service portfolio is within the specialty pharmacy capabilities, through our Accredo capabilities. In some cases, these drugs are single source, unique drugs that the coordination with the medical professional, the patient, and then the care team around them is mission critical.

And one of our Accredo nurses is invited into the home of that patient to facilitate the infusion and the care coordination plan. So that's an example of the change that manifests itself over time. And at the end of the day, we see the pharmacy services as an important complement to medical services and behavioral services that when you design the right solutions for an employer, a health plan, or a governmental agency, you're giving better value to them, and, importantly, to their patients by coordinating the service around that. That's what we mean by yesterday versus today and tomorrow where the model is going.

ANJALEE KHEMLANI: Speaking of yesterday versus today, pharmaceuticals in general are also looking to the future. And we've seen a lot of pretty interesting things happen. I'm sure you saw the headline of a modified pig's heart. And we're looking at genetics and gene therapy, genetic treatments, as well as, of course, the surge in interest in mRNA.

All of this, while great, also proves to be a specific hike for you in terms of coverage. It's going to be more expensive because it's new and has a lot more growth to go through. How do you see that play into drug pricing policy and conversation?

DAVID CORDANI: So when you think about your wonderful question, we've touched upon two and now the third major part of change we see in the marketplace. They're changing access to care, harnessing technologies, one. Two, the mental and physical health coordination of services. And three, pharmacological innovation is what you articulated. We will see more and more specialty drugs, gene therapies, personalized medicines, and unique interventions as we go forward from a societal standpoint. That's good, because in many cases, they are curative.

In some cases, they are life transforming. In some cases, they were life saving. Yet they're extremely expensive. And the question comes down to, how do you amass the portfolio of services to be able to get and optimize the outcome for the patient? Because this is where precision takes place. The data to get the precise matching to the individual and then the care coordination plan around the individual with the medical professional and the pharmaceutical professional-- that's what we're positioned to do.

And taking a concrete example-- as you know, the biosimilar adoption in the United States lags all the other OECD countries in the world. Yet, we're on the precipice of an acceleration in 2023, 2024, 2025 with more biosimilars. Our organization is positioned to thrive in that environment to be able to provide more services.

And when you think about the cost deframing that comes from smart use of biosimilars, it creates more financing capacity for what you just talked through. Society will need to create the capacity. This is not a message of legislating a price point or limiting access, it's driving innovation. And we see biosimilars as a wonderful example where hundreds of billions of dollars of savings, $275 billion societally, are able to pull out of the spending equation if we're using biosimilars at the same rate as other OECD countries.

So yes, on affordability challenge. Innovation is required to be able to harness that. And then more spending capacity, specifically through the aggressive adoption and smart utilization of biosimilars we think is mission critical. And we positioned our company to be at the forefront of that.

ANJALEE KHEMLANI: So as you can hear, a lot, really, thought needed to go into how we're developing especially new or more expensive drugs and different types of drugs these days. Back to you.

- And then, Anjalee, I want to just get your reaction. What were some of the other key takeaways from the JPM Health Care Conference?

ANJALEE KHEMLANI: Well, I would actually say that this year is kind of quiet. And that's been sort of the observation from many of the long-time attendees and experts, saying that while there were a flurry of deals and M&A, there wasn't anything really like a blockbuster sort of highlighting, you know, what is going on in the industry.

There's a lot of focus on gene therapy, of course, as well as just generally the idea of newer technologies, like you heard David Cordani talk about. So I think that's really been the key takeaway. It's been kind of a quiet year.

Even before having to cancel and go virtual, there were already people discussing the idea of not attending. So it's been interesting to see how this year has panned out and whether or not that sentiment continues into next year.

ALEXIS CHRISTOFOROUS: All right, great stuff. Thanks for bringing us that interview with the Cigna CEO, Anjalee Khemlani.