What's Happening?
Cigna has reported a $1.2 billion profit for the fourth quarter of 2025, slightly down from the previous year's $1.4 billion but still surpassing Wall Street expectations. The company's revenues for the quarter reached $72.5 billion, an increase from $65.6 billion in the same period the previous year. For the full year, Cigna's revenues were $274.9 billion, up from $247.1 billion in 2024. The company is also rolling out a new pharmacy benefit management (PBM) model through its subsidiary, Express Scripts, which aligns with recent regulatory reforms aimed at increasing transparency. This new model is expected to be fully implemented for all of Cigna's insured plans by 2027, with at least 50% of Evernorth's clients transitioning by the end of 2028.
Why It's Important?
Cigna's financial performance and strategic initiatives are significant as they reflect broader trends in the healthcare and insurance industries. The company's ability to exceed profit expectations despite rising costs highlights its operational resilience. The introduction of a new PBM model is particularly noteworthy as it aligns with regulatory demands for greater transparency in drug pricing, a critical issue for both consumers and policymakers. This move could set a precedent for other companies in the industry, potentially leading to widespread changes in how pharmacy benefits are managed and priced. The success of this model could enhance Cigna's market position and influence future regulatory frameworks.
What's Next?
Cigna plans to continue the rollout of its new PBM model, with a focus on aggressive adoption supported by marketing efforts. The company anticipates maintaining its profit margins while shifting the sources of profitability under the new model. As the model gains traction, Cigna may face reactions from competitors, regulators, and clients, who may either adopt similar models or push for further transparency and cost reductions. The company's financial outlook for 2026 includes expected revenues of at least $280 billion and earnings per share of $30.25, indicating confidence in its strategic direction.
