Cigna (CI) 5 May 232023 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by for Cigna's First Quarter 2023 Results Review. At this time all callers are in a listen-only mode.

We will conduct a question-and-answer session later during the conference and review procedures on how to enter queue to ask questions at that time. [Operator Instructions].

As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. the to turning Giacobbe. by begin conference Ralph over We'll Please go ahead.

XXXX. me everyone, morning President joining With Chairman this and and Cigna today's Cordani, good are of our financial financial the a Executive David morning call. topics, number Officer; Relations. In Chief Vice including and outlook results and David our Chief for Evanko, today, Group's Brian Senior thanks quarter and Great, of The updated our line Brian for Officer. first Giacobbe, I'm Financial Investor on remarks will cover Ralph

A describing As measures, financial noted the in and not our earnings from accounting income accordance we release, adjusted financial in when is principles of certain directly in States, thecignagroup.com. which accepted are section the our determined total United revenues use otherwise of operations, to the revenues, GAAP. measures, results, net adjusted today's as with in posted which generally contained measures reconciliation earnings income, most shareholders these release, in respectively, and GAAP comparable Relations known Investor is

the the from in current some today, statements We reports performance. filed A will adjusted XXXX These financial operations contained description recent per expectations. statements earnings are risks performance. adjusted measures same income our SEC. future and note subject our to uncertainties in on to risks use earnings regarding the In our remarks labeled outlook and release and share basis making is of including uncertainties our most results from be as term forward-looking and the statements, principal differ of we for that could in with cause materially our actual and today's these cautionary

this the insurance to related we been effective long impact no impact January restated of accounting prior prior LDTI, material impact have and this and included full will been XX, results. There to our amendments, not future and Regarding change materially contracts, amended results change. year for adopted, results outlook operating reflect has XXXX our LDTI results XXXX guidance our duration

performance comments we will -- prospective do Additionally, the With XXXX please we and financial note our share that call includes year call potential full I over future that that make XXXX dividends. regarding will a anticipated including turn to David. so basis on impact of repurchases when outlook,

the also Thanks Ralph. for growth revenue. Good Today strong joining providing call. of model about quarter to during we in some how talk our a thanks delivered I first with morning with begin momentum innovating today’s everyone we we and performance long XXXX and our deliver state and and for avenues multiple partners. and the the care We will are clients, address key drivers record evolving customers, continued financial the quarter of flexible fueling health leading again way needs track capture and to discuss

I describe Specifically, in how drive flexible the benefit marketplace. durable harbor the to pharmacy will and continue services we

Finally, get we With will and will started. details XXXX financial for questions. discuss outlook our our your take results additional we that and provide then let’s about

per earnings $XX.X the total for our year guidance revenues, are full In and billion growth. revenue XXXX we adjusted EPS, in and share, quarter in delivered customer first we $X.XX ranging adjusted

Care the while for again and we retaining, pharmacy contributed look winning serve. comprising Cigna relationships Cigna with as employers, strong governmental the specialty expanding Evernorth for and expect -- across new growth Services pharmacy, are year we forward, good start look Healthcare We and benefit organizations very health forward and strong pleased plans, Health another we the Evernorth Group. services, Evernorth we and

and pharmacy to foundational benefit the strong provide continued service clients patients. value performance Our business the we demonstrating our

significant Care drove XX% services. behavioral as market with Evernorth opportunities as new our represents specialty in drugs given increasing Evernorth's example care total to a growing approximately virtual Specialty well most outside health pharmacy and growth needs revenue which demand. the growth rise its a for long-term one of for of accounts continued

benefits platform, quarter government, With and and with our businesses. our another disciplined medical our our international focus Healthcare, pricing, performance health and Insignia was ratio are across on we commercial, of which with achieved XX.X%. health pleased U.S. revenue U.S. and strong customer performance medical care affordability cost growth we their

U.S. Our commercial good another on pace business is year. for

position strengthen our customer initiatives affordability Our growth. fuel this has continue our to and overall strong competitive helped

consultative our breadth the health, is our the also solutions momentum of to employers and sizes of rely reflection engagement, productivity a of all Our approach their how workforces. upon support and of

in and and Advantage our base. the our XXXX plan growth is substantial from dynamic Healthcare Health, past Cigna have markets strong individual line we into. our we and bottom also top bring positive maturation to growth a to business, in by In given business quality health above global in our been family plans, International quality U.S. our XXXX market growth expanded high affordable in exchange And individual solutions we contributions capabilities us of In provider and a and network. years Medicare and achieving insurance our market government, for the expansion, geographic larger allowing a expect again customer has supported high line few earnings previously localized

how sustained resilience our Overall, demonstrated quality, value with growth we're another of and for year pleased creation. position attractive us results importantly, the they in and strength, and

as providing our in well XX% along year with an as confident increased growth sustainably to strategic horizon are EPS our outlook we over dividend. for ability to our XX% the compounded ahead, attractive Looking deliver

provide and costs upon drugs. pharmaceutical legislative and are attention and impactful recognize ongoing that transparency significant care, the spend prescription physical and medical have programs increasingly benefit in the role Pharmacy We how recognize to value services our regarding the essential an pharmacy successful debate when pharmacy continuing It's on clients for announcements rising medical services often Today, want in or behavioral Risk, time to relying important I are benefits also to a care Express including our and interventions. Evernorth, customers. choice, of services. for for the few minutes affordability, coordination use within about business recent greater create of a we our

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our is the services over sustained strength with growth relationships solutions and to of care our of client expand is model, and full fueling deliver address which suite First attractive that coordination time. needs specific and capabilities, our

choice and leading the are chain, retention higher with mid-XXs Second, and or our to consistently programs. management been And care model to supply business build our we're able to of clients strength and record of prioritizing because rates for clinical we from With in our access, drive the as able secure Groups attractive long client Service we our Pharmacy costs. from drive government the and and Express enabling programs. innovation we've health grow continue our we any greater growth clinical medium local a business, even is continuously national improved transparency third, track are to the achieving base, win plans the Stepping affordability, our outcomes. group players, down largest committed client and largest of pipeline to diverse back, Benefit new employers, to on size growing to sponsored proven

their secure of cost of model design the to of and relates them proposals. behalf, and as providing The are for and current be We've in choice us particularly focus finance advocate commitment some our share Scripts spread behalf programs. on business option customers the starts expanded the options employee legislative benefit models the their financing who on to it financing prioritizing our benefit of their for to we clients it Express to in allowing programs to key or which clients pricing. with efforts discounts the of areas enabling financers rebates primary includes are the This by

amongst the as risk greater choose clients models Our upon their cash needs based well for their pharmacy flow. for costs these predictability and managing as

our the best choices Scripts being passed incentives across and client is each thousands Proposes of mechanism to using Pharmacy limit for we Benefit scope government, over level that generates. to of The sharing choice alignment XX% plans key deliver flow works a find plan over it chooses costs or predictable these portfolio for For Service addition the how context, in employers, point of that and rebate for cash today of availability stronger that spread and that for less pricing pay are the dollars value them. generates serve time. to have able in we Express options in health They of clients. to clients increase result they many will financing rebate and the through breadth the their

a As to for earn Express Scripts, legislative our scenarios. ability confident are in it relates and margins attractive sustainable under we variety of to services our

costs manufacturers clinical our capabilities of competition through We to down, are better to design, drug outcomes supply create programs. health able bring benefit and amongst our through driving the breadth deliver value from chain to

has focus spread. adjusted downward. Evernorth of of from businesses. income of ongoing earnings for fees. rebates retention are in these over fueled to provide of service come for the developed options about continue we by innovation earn and XXXX that this This of area we XX% rebate financing pretax our and to lower has Express trended retail remind the it Evernorth's in is put spread. I retail One context, To retention that from stakeholders also Scripts time greater and multiple This we our amount expect been trending we expect and down diversification you would clients percentage exchange

would these create if an a client were Scripts that return. if of fee and preference, some are further confident payment continue change removed programs capabilities of income otherwise regulatory increase. or overtime these earn by decrease based will vehicles that we broad reduced set to or said attractive So Therefore, value Express has

our examples record specific clients outcomes how affordability prescription tap on and innovation provide greater that long into and are me of transparency model our and and we behalf our drugs. customers track Let reinforce of seeking for flexibility for who some durable better

obtained Scripts Express fee drug by of pharmaceutical cover taking to one reporting receive fully the benefits, clients steps Scripts audible pays services, transparency. a rebates several ClearCareRX expand Express the that is we're supported where pay program They fully what service pharmacies benefits exactly negotiating we product drug demonstrates with by companies. pay analytics have for First, administration flexibility They new prescription mechanism. pharmacy the Express of Scripts and for to XXX% prescriptions.

to guarantees for from In benefit financial Express and patient addition, including and outcomes. keep overall in inheritance also improvements rates Scripts measures, clinical performance clients accountable

to and exist. spread transparency disclosures feed their clients financial providing include with drive regarding they Additional enhanced greater pricing when programs steps even

disclosures Along with model new providing find quarter also results, additional today's release microsite. about on are we and about our financial our you quarterly Express our filings regulatory in first Scripts will

delivered value benefits lowering will out on be XXXX. net in aligned costs of clear, pricing We starting customers. the by will to customers respect costs prescription behalf Scripts we drugs for statement to also offer issue Express information, were The a With of of pricing, drug of for new statement fully and with pocket digital pharmacy broader customers. share the drug

For Scripts XXXX In members alone, in taking Assurance example, because Express launched and program. million diabetes than of XXXX capped market medications. out more of Patient of $XX select saved for eligible cardiovascular customers insulin costs program this

Now $XX our with out cap we for for copay our brand plan, client specialty preferred to in taking of assurance new for drugs, medications. medications, introduction are $X $XX drug and for customers pocket benefits the generic at costs preferred prescription further action

have initiatives across the States. further support also a we Finally, rural communities pharmacists groundbreaking in United to of series

clinical in needs partnering their offering local support true and are communities. pharmacists reimbursement We opportunities to the to care expand increased to of practices independent further

advisory We stream as initiatives revenue well as expanded for prices These convening are of lower committee more community increasing pharmacists. care, rural for encourage will a sustainable an to better Americans, independent pharmacists. also access

leader broadening partner how by recognize programs in our by create stakeholders, range as encouraged our our that use our designing a a specific client clients, and commitment pharmacy have network and trusted received are our policymakers. to could We innovation, reach. been including for value wide through partners driving actions expertise recent of deep They and needs,

the American leadership that such our critical pharmacy competitive system. building benefits block In summary, healthcare in demonstrating for a market are we the is

client of care programs, our through growth. attractive and of are us effectiveness allowing needs model sustained the We the specific serving our strength to coordination drive

appropriateness transparency, the business are advocate we work outcomes for continuing costs. to to we programs for in we best continuing the We are for affordability, to and that greater improved driving And lower innovate choose to clients serve. and those their ability as help of

pleased the we're delivered improved adjusted delivered kept per for share We quarter, of our our shareholders. year revenue our adjusted let the Now outlook. me an and to to growth $X.XX our we or recap performance partners our well In continue have briefly execute as customer quarter increased care medical for customers, perform to and outlook business clients well. and as our and and first full commitment ratio. EPS our and EPS, We

to and needs our Evernorth and environment. to in We've and ability and in dynamic We shaped requirements. changing with navigate to capture are model confident economic meet our conditions potential business continue flexibility by our deliver regulatory differentiated client value us the to caused provide unique capabilities within changes varying to the

is business cash strong our are call I'll Brian. we and growth to the that, and Additionally, driving is over generating will With for effective further that turn that we value confident capital create flows deployment. successful

the XXXX Cigna's the Thank you, outlook full I'll Today, David results our We're start year. discuss with to and for first year. review pleased quarter and updated good our morning, everyone. strong

focused our Evernorth share earnings adjusted demonstrating businesses. execution quarter Cigna first and were Healthcare across expectations, above performing our high The per

some growth adjusted earnings performance earnings year of include to at billion, financial Looking cash adjusted per the outlook of share. adjusted and increase $X quarter at to confidence the $XX.X our revenue $X.XX, full least of specifically, $XX.XX of us tax $X.X flow per highlights billion, share key to billion. gives This from X% operations after earnings consolidated

comments I sources clinical details and function is with our of takes diverse and PBM asset clients. a drivers. a regarding results, setting of Within arrangements XX%. discuss care our fees, and provide service sources earnings along rebates our David's operating platforms our These our foundational Healthcare PBM I'll approximately retail and the I'll Before Evernorth, including set earnings first administrative Evernorth of that level incremental transparency advance earnings made Express recent choices value are Scripts retained programs, ever to about with based and up by on a on is spread. start announcement Cigna build our around a with XX% of I'd our earnings

of spread. approximately and referenced, David to as relationships retained we has fee more PBM adjusted Evernorth and time over pretax Evernorth's rebates As of XX% retail and are client percentage as earnings expand to decreased grow. comprised diverse our continue This becomes continues portfolio based

our ever-changing Importantly, mix navigate to years, regulatory environment. gives stable. operating This has have speaks as changed flexibility the remained in or an ability adapt and to disruption margins business us Evernorth's market to the our over confidence to in

which underscore, would deliver attractive and David continue at PBM to returns. mentioned As will sustain foundational create us allow asset I competitive growth will and our to significant value,

line Shifting X% Evernorth pretax to on growth revenues and in focus specialty delivering customers strong our by period solutions quarter first current our Evernorth results, driven and were net continued cost our the XXXX earnings results billion, quarter clients. lowest our adjusted grew and expectations. for our pharmacy in to high-performing and business $XX.X in $X.X affordability with were billion,

for continue across leverage our capabilities, we we build additional growth an relationships Additionally, to Cigna further deepen our cross-enterprise Evernorth avenue Healthcare. providing and as

relationships, capabilities. client and serve services, our our advance grow products digital and our We which also strengthen strategic investments, to expand of make and continue to portfolio

strategic relates in and our contract our XXXX. is partnerships, in us the value-based programs Centene accelerate to to further capabilities. an progressing And that we remain on opportunity our begins As attractive implementation provides track our with collaboration it care of and VillageMD

Evernorth We health U.S. benefit well and as and partners of will for Healthcare, government plan continue commercial U.S. the other these provider to our value-based expand clients clients. as solutions Cigna

with market. perform utilization product we expectations for high clients very regardless customers Evernorth continues around visibility accelerating approvals consistent our the into second half remain and confident year, the in with this shifts Overall, to in biosimilar well. and savings Additionally, for multiyear of of the opportunity expected prior

innovate enable us environments. to along Our streams, diversified dynamic with of adapt through flexible financing set and models earnings

Healthcare, to related by adjusted well ratio our engagement was revenues our Turning slightly XXXX came as as care first overall quarter to expectations. Cigna as above grew initiatives $XX.X clinical slightly were continued billion, XX% discipline. our and pricing pretax and was reinforced billion, adjusted of This earnings than in expectations better models $X.X medical utilization favorable. affordability XX.X% The

customers the X.X the Turning products quarter the our market-leading XXXX. million to growth and medical of we This medical strong growth end continued approximately million customers, customers, ended differentiation total since of demonstrates XX.X with services. of

our the And increased upon that by drove we relationship. existing across year-to-date Our of aided of a X% organic this a commercial growth all client our customers, of expands an win, health in large saw plan government considerable and even addition Medicare client with customer growth Individual on XX% Advantage our customers basis. year-to-date Evernorth U.S. commercial U.S. segments. fee-based U.S. market excluding business, MA In we growth

to affordability XXXX quarter Overall, first further of leverage. clients. deliver our in Cigna strong by and differentiated delivered customers growth as continue driven and Evernorth foundational is results platforms, start portfolio Across and and a to Healthcare by diversified we cross our Cigna strong Healthcare businesses, our accelerated we off to financial value bolstered enterprise

outlook our to XXXX. turning Now full for year

expectations have relationships $XXX by consolidated Healthcare and for We full increased adjusted Cigna revenues at to deepening customer enabled growth in year billion, our continued and Evernorth. XXXX least

ramp EPS. increasing are slightly by half at Consistent to large EPS per below our prior we per commentary, share weighted also driven the part of share. in our We XX% year second back with be half least contributing the outlook earnings to year adjusted over $XX.XX course of Evernorth's expect earnings full with year earnings this

Evernorth, continued innovation. in all we In expect performance, while strong and investing growth

adjusted to XXX,XXX X.X expectation of lives. of are expect XXXX $X.X an Evernorth raising at continue least increase at medical In our to we customer full Healthcare, billion. growth We least year earnings customers, Cigna million

XXXX year at XXXX range to $X.XXX earnings ratio we medical XX.X% adjusted and to full XX.X% expected of raising billion. improving a our are least our outlook We are care to

impact to client our underlying prudent respect elevated of levels. enrollment with employer second the by have our half evidenced as the the the in growth rest some to macroeconomic as year. we our yet Cigna clear, move to continues of disenrollment to corresponding guidance We outlook the the be results. year outlook softening to growth with Healthcare And To some organic assume we relative environment, year to the we quarter expect continue the in economy. enrollment through for see expected first material customer full Despite dynamic year remain

outlook customer as Additionally, incremental reminder, not a contemplate redeterminations. does growth Medicaid from our

that Group's diversified important contemplating weather when in mind future economic us businesses the have downturns. prior we to the more it's of positioned to be This Cigna and Finally, in to under environments. economic than it was strategically resilience keep confidence company's performance various portfolio gives dynamic macroeconomic scenarios,

Switching move capital to position let's gears, management outlook. XXXX our and

Our debt to March of capitalization was ratio XXst. as XX.X%

the full We continue of continue $X repurchased a ratio we long-term XX%. $X.X billion And lower X.X X, approximately of of expect for XXXX capitalization from to balance to cash through we have common year least the approximately billion. ratio to at XXXX, shares year, May for approximately million over this and target debt flow Year-to-date operations. to expect stock of we

outlook Our attractive and benefiting balance highly our efficient strategic from remains sheet that capital. our service-based margins, strong returns cash model on drives strong flexibility, flow and

So recap. now to

our quarter results to First were deliver businesses. with Evernorth with the quarter our results reflecting complementary in across diversified line above continued expectations. our contributions first of expectations, strong strong portfolio

to start deliver confidence had While on year, strong Cigna giving increased Healthcare us guidance to $XX.XX. of XXXX least EPS at our a the

of Evernorth annual of for EPS growth it long navigate Cigna and capabilities XX% ability call. commentary. the and to to adapt we the we'll Q&A mix, with our that, and with to turn to We are of and And expect operator least prior our portion business the average XX% in and And complementary the XXXX with diversified consistent at continue over Healthcare. across run, adjusted over operating backdrop regulatory EPS expect confident $XX to our continue the

Instructions]. [Operator

Our Morgan. from Ms. Lisa first Gill question J.P. with comes

You may question. ask your

to to lot around away PBMs what you you thank employers employer, take is me a the saying feels also that it guess is to very the for are question legislative season, what by understand then you decision-making and much, when comments then is us of to a they from the selling the that PBM all this versus can think the how standpoint an actually are employer, going about around just around you about Thanks how you're you where good the first profitability, an think morning. XXXX disconnect update etcetera. give really I as secondly, operate? if the do legislation, David, to And selling thinking saying we legislation and to season? my

and Lisa, thanks you put questions. for a lot in there. morning the Good

each. to try me Let touch on

step for in relentlessly the of acronym, First, quite noted, that delivered to service the continue back, affordability but organizations work have using PBMs view that benefit proud broad we of I and of as improve the we are as deliver to that we're the pharmacy constituency organizations a group. results the

increase if first still your point energy, in we I is this for costs results on part to trends, do clinical question, step than We for to legislative of back, out-of-pocket think the recognize, the outcome, program terms of well, less don't and could tremendous in work think average, everyone. the I we or legislation $X affordability individuals.

example, the a has month and a is affordability, overall are for there's and designed it the illustration while to out-of-pocket someone deductible generate significant in high deductible So is if for an has a dislocation an step up January, -- of of of need plan system. an for system, the to right. experience a failure pharmaceutical innovate because to financial a that's failure that. the that consequence that's of a individual, need programs creates unintended to We our We

when we of market case. forward working in yet some those uniqueness access have not the may networks, delivery, step that that coupled about at rural it therefore, affordability, see continue from for you in everyone we averages of Hence, to the a need And individuals. not we works you sure the proud we're innovations network we could talk fact talk the look we leading is So we to about could America home accessibility access the for breadth on. specific till through our but have of make of locations an the our or pharmacy with or innovate some

of directly the variety program out-of-pocket under Our circumstances. for goes individuals copay a predictability assurance at

and pharmacy pharmacy rural Our to go individuals. support specific initiatives directly independent at actions

when is sit do we look need and forward to do leader at to stepping accepted, the we So from and that better, we're as a averages better the data standpoint.

rates design for have sophisticated us successful. our new we those employers to a see Scripts rates would dozen relates together large, with that and about as being employers large out, employers, team it clients worked Evernorth ClearCareRx rolled them programs and growth to in those as our program and to how As that Express of we and work sit we that just roll future work here I for design scale. innovation. about the us that and talking retention reinforce note team two And our fact can hundreds our business was years with and our we by out and today, we

having mechanisms, high remains the making of and They further they advancements choice like aligned we their receptivity like there choice. financing clinical transparency to receptivity high but programs, So we're which with. the in of in terms are

manage on to just selling XXXX service will growth of the us maybe finally, then portfolio. another time, the year be Evernorth And for in season, XXXX

strong We see retention. will

retention the As better. I been our noted, has or in mid-XXs historically

programs questions. strong growth our as the in resonate we products We and good see thanks Lisa, marketplace. will the will see retention for and

Ms. Gill. you Thank

Barclays. Our Mr. next Steven question comes with Valiquette from

question. You may your ask

Good thanks. morning. Great,

in the results the with expectations. regarding Evernorth they quarter, you mentioned the were first line in So

volume year, first rates for if on color you're curious full run good Just with the also, giving Thanks. know to And for are quarter script just but not the trends I though down, that? full the year? script more in volume guidance get the curious the being just

now results for quarter. that to David being appreciate, in counts it's Evernorth morning as Pharmacy much mentioned important Good generics end derived of with come XX% through Specialty revenue mind, Steve, specialty as the very line the PBM. from thing Brian. you And by expectations dwarfed One our script is that's and the in business. higher-volume the in I Yes, up Evernorth the counts pharmacy can script earlier, the keep are mentioned our

Specialty bit aggregate misleading I'd a for little the at to those in year-over-year. it's revenue counts -- Pharmacy mid-teens reasons. So look note script grew the the our And

strong So a very it was grower.

mix it picture generic script and counts the growth flattish the changes You occurred year-on-year, a good about think driving as that specialty, of the I in script by think moving big XXXX client of kind but saw a that counts. is bit. really all-in around XXXX strong of overall the drove bit you that again, script PBM And from to was dwarfed of volumes the

Now look such an a prepare onboard obviously, count at purely see you specialty metrics. you'll as step-up with growing pharmacy we we rate, But forward meaningful to masked earlier, a metric. XXXX, the mentioned that script Centene, I in as the to it's bit attractive when look

and put helps So with that together, a confident getting comfortable pieces you year terms hopefully, the bit. And those when all we're full outlook in of income. Evernorth

thanks. Perfect,

Thank Valiquette. you Mr.

from Goldman Sachs. comes with question next Rich Mr. Our Nathan

ask your may question. You

to wanted go and the regulatory I good the focus, to PBM back Thanks, David. morning.

cost pharmacy everyone. designs much patients. lowering I that benefit not of target, And mentioned for of on You for the the work legislation is out-of-pocket all focused think,

to But terms maybe couldn't address having different I kind are roll You've some you clients there middle is know had any of plan more broadly of follow-up of client place, relatively kind maybe new shift that options I we in the ground ahead would the of see changed backdrop? of adjust a go regulatory in think my And guess that forced did of could kind payment new client of of time. over quickly preferences shift you is if in that of there that choice. that you to proactively points legislation like pain guess said that address -- how these past out solutions clients kind slowly these some to -- I being areas. kind to I legislatively? models

Good morning Nate.

affordability that are working much on time. patient note, stop. before, is of balance well in the standpoint. Two, specific much out-of-pocket, we at because noted and program the in trade-offs out of focus of relative just we sponsors the see insulin. in for XX $XX in its from how for in the etcetera some is to in There's million the average marketplace been I terms overall said kind, And diabetics, costs you today programs XXXX, to as the premiums, could on program first, the have will rolled important in take, those choices monthly put planned you actions terms you cap first as large, more benefits, that by So from insulin-dependent benefiting put how to And pointing made of affordability. people assurance

So that and we have standpoint. can will from

the a some learn devils in click down program, work because, the in details, don't programs, of drugs, of for out you a as that, program. assurance the new you they preventative many for class can cases, an HRA because in example, requirement to They'll drugs. copay programs in HSA only but the Second, in work roll broader you some the HSA won't regulatory of program but cases work work as for

more employers So the be design in that as HSA, in a make copay. there's and even a costs benefit cases, an dislocation that sure because with on an to have from more learn enrollment in later given some in month enroll more consultative to yet happens out-of-pocket now will enables strategies focus pinpointed individual us they communication open their

precision taken, being standpoint. So my point more necessary that from actions is taken, that actions is

in it to flexibility our we could how tremendous we've proven -- As the relates pivot, model. quickly

last different can to Day, pivot, tools more. Some today offer exist our to and program ClearCareRx the and we with additional disclosures as choice choice you're expanded even continue financing we're we further with would and will Investor data seeing push mechanisms. provide ourselves will that of the we noted continue We pivot, to exemplary we our use providing, more at year

to they that also we necessary. them choices to But a their predictability to to rapidly, we their preserve how and manage for rapidly. flexibility be for they overall reassure that confident have are we how want are that ample we we voice will able to to finance to want flex to work flex as you, But employers still ensure So programs, cost want standpoint. from if

you Mr. Rich. Thank

Rice next Our Mr. with Credit question A.J. comes Suisse. from

ask may You question. your

and think I contracting. In in about notice give on the that that, wonder prepared update Hi will question. you and bids bids when XXXX can your your you're offer place remarks, final if your start it's in on that growth us everybody. or -- PBM try I'll the that with arrangements and VillageMD margin of away commercially the part be to ongoing any package changes to you whether MA pivot a factor about MA? you in putting you or from on those guess about view value-based XXXX discussions mentioned the any further rate on I your MA, anything of trajectory so

A.J. good morning.

value-based a hit I care, positive questions start to the and let had long value-based but in to record You tucked of the first, there, before track programs. a Relative from top. lot Village we've me care relative commitment

commercial which in with for benefiting traction Village excited to I'd really lives and of pleased value-based cost oriented are as to using more we Advantage. model. accelerate deeply lives further are to ASO of underscore and and data advance the and ability has therefore XX% Specific as individual we're Evernorth ways or overall consistent we'll is approaching Village, in exchange, care order them services benefit of additional design XX% we orientation, a that better, medical extended depending specialty collaborate approach trend. magnitude our curate even off value. market-leading commercial care not in seeing going to with with may many collaborate Today, looking as with partnering, with and on Medicare Advantage, care you're lower that guaranteed or current networks, tier outcomes only I would as value-based our their the clinical partnering proven is as further but we're more Village one think And MA Our from forward. about what of collaborating and from value-based you collaborating to commercial more Village program. are etcetera, around our portions program. from successful XX% with and and them. continued in already bring And recall, cost resources well drive of them And note with benefits the highlight their model they've about There we value-based that Medicare more at

contribute pricing benefits are a your to to result are our As specific is headline. of question, pricing underway our starting initiative, to benefits the markets starting village part it in already, initiatives relates yield as are the the of to they there current in where

to XXXX rate rate that relates your it in. framed think our to for takes and take relative last net about question big should is notice, strategy, We average. industry you As view etcetera, our are approximates the the all puts

maturing, premature with know, XXXX. to we for growth relative in Thanks, and will that bid are basis the half XX% bid any on depth the we're to would for it and pleased relative forward and you of see right in pleased our we so to our A.J. work year. pricing and market-by-market as updates as Secondly, look our cycle get the the part the we We're wheeled into me some inappropriate strategy in of speak the to strategies be to markets XXXX. latter now, of We're in today that a traction specific the second

Rice. Thank you Mr.

Our from next comes question Mr.

Wolfe Research. Justin with Lake

may ask your question. You

And morning. wanted the with transparency couple I'll of good up much I on on PBM appreciate how just Thanks, follow PBM. comments we there. to the the a things echo

would their lot impact -- of did what what the is be happen And to of spread given versus term? expectations gotten XX% The a profits of your the contracts year, peers near-term so pass your pretty this on the meaningful such first away, would this year. pivot talking If headwind you then contracts those that over from versus I've is one something questions secondly, what about XXXB would a how and time, about government have rebates. they're how your talked longer that and structured -- are come is that could

us from there curious maybe XXXB some So percentage Thanks. can you what terms there of if come [indiscernible]? changed give your earnings in of your within has outlook color how or

reverse be could to seen us said Justin. recent based for think start exposure I'm certain the take what morning saying are I take potential questions some to programs. your other others I'll questions. It's by size of we of Specific going overstated. XXXB, extrapolation those we've order. David. in or estimates would your Good some upon what

By underserved back. benefit we many an populations. me of capabilities, important now series the hospitals for way more XXXB in do step cases, context, from represents of to believe So for affordable pharmaceuticals let

and much made the those some deceleration difficult in volumes Some or hospitals pharmaceutical benefits. move first trough is different saw engender activities the to have of By in data to manufacturers of forward. XXXX saw in unilaterally way volumes for more other XXXX. half that mid-XXXX increase second it removed We those saw we of we begin and deceleration, our half sharing deceleration context,

our for As it overall our recent into our as year most some impact, dampening the best it our which includes our estimate, the to results, factored is on of these we some updated think manageable other I extrapolation the certain our not driver would programs, but we material and a size based portfolio. portfolio stress, within overstated. to relates the and program have year, outlook plan for relates This Evernorth of the of overall is of

believe say you do it creates we answer question, your we precise to transpire. give that an theoretical is take will a to legislation which tomorrow, really appreciate, If immediacy, I first your which relates that question. can't As I Justin, passed a and

frameworks some recent and you latter in fact, we and could regulatory consideration unanticipated out of you consideration example, movement. or theoretical take immediate the large, that think for committees that don't should half believe we have the of dialogue think contractual coming don't the by implemented most that of case. that for of if exists. at XXXX, of We is the Having otherwise contractual consideration look into being legislative consideration said In that,

to continue will our We clients. advocate for

work what choice able clear, wants sharing exist. client from value Justin. to we with choice sustained the and a with the and We will as attractive ClearCareRx tools deliver ensure have to without margin we for a that earn create. continue And standpoint, even or made being a to we our Thanks, program, flexibility to

Lake. Thank you Mr.

next Our Erin Morgan question Wright, Ms. comes Stanley. from

ask may You question. your

Hey, thanks.

You and Thanks. now guidance quantify second anticipating softening how that embedded are change previously? mentioned some economy about what from half that elevated disenrollment you you you did and relative thinking a and or what range were how your to in are you seeing the in can that

Brian. it's Erin, Good morning

the all would the Cigna aggregate Healthcare in strong So reiterate, first I levels. really Cigna pleased Medicare Healthcare U.S. of showing and expectations And just ahead our for where we nearly across with million of performance platform. of the enrollment that year-to-date portfolio. added XXXX, strong X think in really commercial business U.S. builds running individual results our all, growth is upon customers our momentum we're you Advantage across When strong

the levels historical for particularly U.S. be economic And redetermination. pressure disenrollment mentioned, of see a disenrollment over we calendar have incorporated as not As counts potential year. commercial have year. volume I see client of net our And still in the assumption But U.S. in typically in as in select we course months the And for are seeing signs mentioned, the finally, norms. recent addition balance any in cycle half segment growth of of with of individual we the in-year the I business, continues to year yet assumed the much book, we not back its as most in very Medicaid yet order the attrition some through the given book line organic I example, that, elevated level mentioned, some in in to sales of the prudent. are we within

upside pure for represents that us. So

we we the customers weakness And should not up later in some unexpected economic so upside Healthcare the transpire or year Cigna we pick redeterminations may should customer have see in accounts. some Medicaid our from

X.X% the will rate, by our we've move rate. terms it give for just levels I'll sensitivities. prior comment to X% economic every change in move unemployment downturns, X% of in unemployment relates seen levels as Final X% either commercial employer you in to In the enrollment

of book about how it you think So a you year. gives rest model of the as the to the sense sensitivity size the the for relative to

Ms. you Wright. Thank

question Kevin comes Fischbeck Mr. America. next Our from of Bank with

question. ask your may You

basically be tech you apparent cut be earnings relatively conflict like from seems cost for reconcile what any and help quarter, wasn't I into industry. with trying over, providers Great, helpful? you season through after strong cost companies trend, an to still guess, color this problem quarter a the seems It a thanks. the numbers in but Can Thanks. care and still really from and particularly, quarter numbers on would solid the managed is to the reconcile the the med

it's Kevin, Brian. morning Good

in we're to a by performance start of saying side, few pleased etcetera. delivered quarter strong thoughts than So for another here MCR terms just you or better having the to of expected. reconciliation line I'd the provider in

to in I'm So position. the start pleased year that

function the strong a with made can years initiatives. our of of You that progress in think affordability as recent we've

our provider such items includes contracting So improvements, pricing discipline. our continued siding along that evolution, with [ph] as optimization, clinical care program

year-to-date. allowing X.X million So that all grow us to us customers all while well, served

As driven about specifically, claims. the was we saw or the by that lighter-than-expected quarter viral respiratory favorability you first think

RSV been this in case, So think aggregate what had of COVID, in expecting. little we lower flu, a than running bit

normalized saw the non-viral transpire that levels quarter, utilization, on pre-COVID price or line But that that's non-viral normalized utilization was to We had planned reflecting expectations what our again, stepping during priced and side, were the planned this first with more we Now levels. more we for saw. into in had we consistent in the this in with XXXX year. And pattern.

Fischbeck. Mr. you Thank

Mr. comes Cowen. Taylor with from question next Gary Our

ask question. your You may

the morning. appreciate talking Quick seems PBM because about if like to you're is company's the I of this good XX% Hey, total earnings price year. down the XX% overdone to obviously, it expect that disclosure quite XX% question. stock do you retain

new to Florida of see Are second believe, going disclosure the question is that. see around some my pricing or And knew is will appreciate just the that spread to on economics when wondered you about Florida you signed of going disclosure, was talk the just sort of rebate? address if that all move XX-Q business. just Governor And of employer? I in or be the financial and you to retained did we in that some we date in then So that lines prohibit I pass what to -- spread would that had how what the of across by be implementation the signed quickly was

question. take Brian. morning I'll first it's Gary, Good your

will David referenced in that on you think Florida. comment situation I the

give misinformation within all the our so to today on As incremental sources designed it earnings given disclosures, relates of the to ecosystem. in the investors Evernorth, just really, of the were amount those context further some

to we you'll important information alongside at so hopefully, And useful additional do. understand well various that some as doesn't that are PBM that information. filed that XX-Q provides supplemental stakeholders a as help that disclosure find qualitative does think our as what some And and look we find we today, the metrics investors

PBM additional it and of to pretax of retained the some with As rebates relates example, data adjusted David XX% points the for earnings shared, associated and I spread.

necessarily As for as that declined every quarter point, will you we referenced, comment the... over are evolving context to that want how to sources you that grow. has in not we're percentage continues on intending update give do this At we obviously the time the over time. earnings Q but David, business to

picture, the We'll This or don't go is flex quantifying in is to the to ability have it's state ramifications. Sure. Big our This speak. clients the a our We're terms from well. rebates. for a about. of literally the We in large timing We prior aspect Interesting capabilities working Good that as client relative as we it's taking two details one morning of noted of we of about still to relative talked Florida topic any your gathering is to want digesting standpoint. the further as talked I to discussion spread. I implemented. one terms this as question otherwise. have components place questions manageable. to through in specific activity, relative Gary,

footprint respective time to go-forward using the Specifically, obviously, our to we the be But compliant, capabilities. have or and basis client, whether impacts to mechanisms we'll work want they implementation with through financing other relative geographies their for as a we flex client on and then considerations not will flex, ability forward going forward, to by the line.

Thanks, appreciate it.

you Taylor. Mr. Thank

comes Our next Stephen Baxter Mr. from with Wells question Fargo.

question. You your may ask

industry this any ask adopted, model do there time pools can kind as a then pricing explicit to could access think to I the ClearCareRx. how how be But to fee-based target you wanted be to share? are you progressing will RFPs. about I do guess, sophisticating clients over Yes, first, of models? competitive during for of that of this you Thanks. your think obviously, And evaluate is Hi, your dynamics whole quickly about economics

think Good sophisticated about of to number, program and program I the clients in as immediacy more about the small perfect flow for morning. years that extensive program, more as work I dozen standpoint. the large a large this think then previously, pass-through potential Stephen, to market a on ClearCareRx management program, of given that design worked the to aspects it out noted down the from ramifications we've a clients we're Two, of creates and would the with cash it addressable excited to the larger two a roll working through basis.

marketplace. the be this will So choice offered another in that's

I relative and had the mission-critical In inferred your of question, think commitment to innovation this relentless your subset that of broader ongoing to to we're any a in our question, programs. of it's industry. of proud broader is to variety mission-critical industries, the fact we leadership

professionals then critical. talked and program they're know, the as together how mentioned, coordinated professionals expertise Embark therapeutic clients program, you high-cost and that insulin and as behavioral centers medical mission detailed therapies, SafeGuardRx I on specific management As and focus with our gene they our the have how with groups programs. diagnosis and come are on resource coordinated all more that programs, benefiting TRCs, we about our of care before to relative is

your path environment point, and the innovation of may So fee-based transpires is, to a transpire. it whether that

the think, choice, having is critical. we However, mission

in the audience, space maybe broad as our benefit broader the approach, mechanisms, our model, you and agnostic I seen mechanisms mean, about may in we and approach meaning think was space, some financing you medical for where medical we've as see with similarities a Finally, the funding an of trends manifesting lead return position the those guaranteed management, them, flex it's stop pharmacy we're whether to we a risk And or share space model, see we there. any cost in self-funded, a model. could same loss and on self-funded in

of XXXX. two ClearCareRx, programs and ready there'll space. be shifts market like more happy perfected large the adoption years scale. in don't and of we're be this to the to in So the it's its in largest leader employers, entire design, think it's We We to think

Baxter. you Thank Mr.

Raskin Josh comes question Nephron Mr. from next Our with Research.

ask may question. You your

Hi, It did like expected. morning. Maybe was individual where thanks. if it XXX,XXX Good the I book. those that wondering that was more and give and could membership than maybe color early priced the you came give any more on that so business from then comfort the that you maybe in correctly? looks us some reason come lives on total increased guidance? And metrics you utilization for other signs or

Good morning Josh, it's Brian.

So can the XXXX, strong of overall, individual of a customer in growth a you few combination think things. as

strong rates some growth from into the So obviously, one, industry XXXX. had XXXX

We growth of Texas, states which states and those stepped existing in three from did Indiana, South were and XXXX. geographies that new in the three also exited into, the that a our new where and market think competitors if growth in. of there that, certain geographies from of about you were sources And We some combination some entries participate we here Carolina we had see majority particular. our came come

drove Florida Georgia growth Texas, and city, we're in multiple states. of majority those any the So the not locations in specific one

in Fortunately, in goes commercial those long U.S. operating we MA history individual time. a for locations some been that these and the beyond geographies meaning have our has businesses business, well

should these engagement So customers benefit provider and programs our clinical well. individual as

run claims which guidance below MCR this. reflects the expect calendar our the margins for Now long-term continue Cigna to we goal, the and the purposes book in margins, of year, X% for our income X% experience and is XXXX will on this Healthcare to etcetera,

that So goal. X% we X% below expect to run long-term to

we've in running standpoint make assumption of target. margins the prudent substantial that to we think Given customers long-term added the amount XXXX, of below new this from is a the

payable XXXX the full despite in we've with quarter plan assumed the While our year line the receivable the in a year first quarter. XXXX for And expectations be fact as outlook, in year that the claims we actuals risk the far, largely as were first a you we importantly, adjustment that as position early it's think will are for position about the well through plan so in our year.

juncture to year assumption recalibrate in And assumption. this data will we later. some us see early XXXX industry-wide prudent in risk until the to that a when that's that adjustment help think make we at again, So

that about think As run, the future embedded is expansion business power source of help does contribute this segment's a represent longer will the earnings a long-term and income book of you margin that to growth.

year. a Still we go way accruals. it start to good year, So prudent we've a the for the taken the to think a posture to and overall, as full long relates

Raskin. Mr. you Thank

next Our with Fidel comes from Scott question Mr. Stephens.

You may your question. ask

drill thinking the thanks. would on segment interested us your business more you could Hi, drugs, give the both a emerging Thanks. some insights drugs into then morning. just just I both if Healthcare maybe and latest perspectives? Evernorth in from Alzheimer's Good maybe bit and GLP-X the be Cigna

Good diabetics pretty the morning treatment And have been GLP-X price Scott, forward represent in step we and specifically it's positive significantly. by protocols such. drugs David. for Clearly, the a think drugs the way as of headline, the

confronting value-based expand appetite P&T relative the our coverage demonstrate that. seen continue been the as from clinical through has committee and for pharmaceutical came expect first challenging stepped of a and this important the that have and seen I Medicare class. some Alzheimer's the with disease CMS you have a development early to our FDA, with There to space, similarly trend more relative date, right through beyond would basis, we've interest within excitement will also growing relative employers go-forward remind stay [Technical I'd but take going both benefit carry the of such seeing ongoing more clearly, some We I that on and our limited clients. certain for to for within diagnoses Alzheimer's to care thus And oversight standpoint. on demand to to a aligned formulary. contributions to have a to relative seeming We relative positive help data treatments. add this limited in would seen to would across that clinical progress of coverage reimbursement, testing as We've monitor had in diabetes we next-in-class to manufacturers now promise we class the internal like when thus far. that lot population that patients But see out, space adoption tightly early have you're it within Difficulty] more our working far. some, as well we limited some actually and to adoption lifestyle drugs arrangements

note, But about some on the an cost drugs in On if a final can latter think a of cases, question, heard I is, you with these side the around put part in your benefit having a clients offset a you you've pharmacy of is of circle the this, creating benefit, think clearly. we're Group's and equation sophistication should of some and serve Cigna portfolio. given of the of Evernorth think natural pharmacy you to the portfolio that programs about able the within and the and size because also our reach breadth specialty dimension hedge of

terms that ensuring the we have for this services helpful as So depth within growth the value Evernorth see of delivered. individuals portfolio will coordinating is and in a opportunity of the clinical be we in in there terms

track promise, I adoption, in would services some the think natural some some you relative benefit care. space So through a And cost space space. we would to record importantly, our in categories about hedge emerging both early pressure in underscore, value-based high-performing have

Mr. Thank Fidel. you

last Our -- Caliendo Kevin comes from question Mr. Kevin UBS. with

may You ask your question.

since number? that pharmacy well there like Thanks the separate? back medical account transparency does profit that me such you profit the Getting earnings, as that include spread, segment Evernorth to XX% getting the or you've rebates on that been is for Great. -- and in in. provide pass-through does the us also can a for in giving is ESI the Medical any of and And mood,

it's Kevin, morning Good Brian.

and the rebates is the made the that So retained the spread contribution specifically. PBM segment's reference Evernorth XX% retail we that to comprise

they of them. value with our or clients, pharmacy health like Healthcare our that they for Evernorth, be health how as Cigna the use all the to whether unaffiliated would clients affiliated So create plan of plan they choose we

then metric decides how So health David, company. to we're question, any there Evernorth pharmacy the they not want in created in reflected Cigna segment, choose from to to And that's the your value on like Healthcare Evernorth XX% plan sister the said, specifically if contribution. that's deploy the here? earnings dimensioning are maybe Healthcare you Cigna pile to I

the served cost about contracting, cost total medical to contracting, that, And their think generate Kevin care, that Evernorth, contracting, health health the are plan by you to total plans consider on their add through price as pharmacy of ancillary if a you contract behavioral a aggregate of care point.

are that for commercial, of Medicare guaranteed case the or the that or a that's of into whether standpoint, risk-based a the cost cost exchange business, offering, in business baked pharmaceuticals Advantage individual health So plan. offering from

contracting, So their contracting, the behavioral that offering their medical for like their that's equation the factor to that's DME value marketplace. of their that into they'll pricing just etcetera, and net they're delivered delivered value part contracting, the cost overall

guys. Appreciate it, thanks

turn closing Mr. you for back the David to I Cordani will remarks. call Thank over Caliendo.

again for joining Thanks call our today.

Let this outlook while that, revenue discipline, focus team on good me is and everyone focused customer for are serve all of our do increased reinforce innovate. we we To adjusted continue quick and to we remains just we and with confident year. points. One, a EPS, executing our couple that growth will deliver

choice our further who in I our to drug by want XX,XXX are both I communities thank serve our for and drive every each dedication world will of the commitment commitment and we lives clients. and well working relationships and is in positive to every very the their day. that the we and people's increased for able also coworkers all we our day serve patients programs want through costs including make improve difference fueled We our would the starts transparency, progress commercial customers, as demonstration around to the in a to as working make continue in our to to continue our down to formally health with clinical to leadership care, underscore

in joining for you call. our our we future. to always, look continued discussions thank Finally, And as the forward

shortly. Group's Results XX this A to Relations available will gentlemen, Quarter will and be First available Ladies call. of respond following be XXXX Cigna Cigna this this days concludes Review. additional for questions Investor to the conference business recording

you the participating. no recorded XXX-XXX-XXXX. replay. dialing is and or There XXX-XXX-XXXX passcode this required by may for for You Thank access conference

now disconnect. will We