Cigna Group at Morgan Stanley Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. So in your second quarter call, you did highlight that utilization remained broadly in line with your expectations. And you did be convinced with MLR in the quarter. Can you talk about some of the nuances there, but also could you provide an update on what you're currently seeing from a utilization standpoint to address this kind of upfront and what your expectations are for the second half?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then in terms of your broader thoughts on the most recent quarter and also the second half and the other moving pieces and the key drivers, what should we be thinking about as we're modeling out kind of the third quarter, fourth quarter here?

Question: Erin Wright - Morgan Stanley - Analyst : And most of your commentary on the utilization dynamic was on the commercial side, I guess, any commentary on the other subsegments in terms of MA?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Okay. Just want to make sure that's clear. And then on -- let's switch gears a little bit to Evernorth, because I really want to talk about kind of Specialty and Care services, and we'll get back to kind of the Health Benefits business as well as PBM. But I guess, how would you characterize the long-term growth prospects? You talked a little bit about it more broadly, but tying into sort of the biosimilar opportunity, biosimilar HUMIRA, you mentioned STELARA as well. How significant of a driver is that for you? And how would you characterize the opportunity?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. I want to get back to STELARA and HUMIRA in a second. But since you did mention CuraScript and you recently also re-upped your contract this morning or at least it was announced from [Cencora] with your Evernorth business and the distribution relationship there. Can you describe a little bit of the detail any sort of major changes in terms of that relationship? I know you were making an effort to take more of the specialty business in-house getting to closer to 50% from the 20% today that's in-sourced. Where does that stand today? What's embedded in this contract? And what sort of flexibility do you have in this contract now?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then understanding the adoption of biosimilar HUMIRA took time and was a ramping sort of process in terms of how it was embedded in formularies in your adoption kind of curve, how would you characterize that then for STELARA and other biosimilars? Do they follow a similar path? Or what is some of the lessons learned in terms of how that's transpired?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then can you also expand upon kind of other areas of specialty that you see as kind of attractive to you, whether it's cell and gene therapy and what the growth prospects are across that segment?

Question: Erin Wright - Morgan Stanley - Analyst : Do you see value in bolstering your specialty infusion capabilities at the moment? And you did mention this as an area potentially from an acquisition standpoint or inorganic growth opportunities just across specialty in general. But yes. What are the opportunities? Or how would you characterize it?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Okay. And then let's shift gears to the PBM, if that works? And just any sort of update on the selling season and how that is shaping up?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then PBM regulation, obviously, has been something that we dealt with over the years. In terms of scrutiny of the model, but I think there's a lot of misconceptions on the model as well in terms of the value that you provide and the savings that you achieved for your customers. And so how do you -- where do you see that coming in the near term in terms of regulation that could come into the fold either this year or next year? And how kind of policy and regulatory dynamics are evolving in your view? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 2:45PM, CI.N - Cigna Group at Morgan Stanley Global Healthcare Conference

Question: Erin Wright - Morgan Stanley - Analyst : And then some of the changes in the retail pharmacy models that are out there. I guess, could you outline your understanding of some of your peers kind of proposed retail reimbursement models and how you view that from a PBM perspective and how that plays a role in terms of your relationship with retail pharmacy?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And can we talk a little bit about GLP-1 adoption coverage overall, I think, above the 50% mark. But how do you get coverage even beyond that? How is traction for EnCircleRx? It may be still somewhat early, but some of the financial guarantee programs that you have with that with employers, I guess, how do you think about the economics for you as well as broader kind of adoption?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. I want to switch gears to the health benefits segment and particularly on the commercial product and the mix there. But based on the conversations with your commercial clients, I guess, how do you see the employment market now? At the moment, what are you assuming in terms of what continues throughout 2024? Membership growth, I guess, in '24, impacted by some of the ASO contracts, the dynamics. But -- but can you remind us of the long-term growth profile across the commercial business for you and the key drivers for Cigna, particularly in that select segment as well?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then just switching to the exchanges. I guess, how are you thinking about the growth trajectory there, long term margin profile for the exchange business as well as likelihood of enhanced subsidies remaining intact, I guess, beyond 2025 and that potential impact to long-term growth?

Question: Erin Wright - Morgan Stanley - Analyst : And then I want to spend the last few minutes here talking about M&A, capital deployment. Obviously, that's been a key focus for investors here as we think about kind of the Cigna story from buybacks to potential M&A and larger transactions as well. Where is the focus? And where does your commitment buy today from a capital deployment standpoint?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. Thank you so much. I appreciate the time today. Unfortunately, that's all we have time for.