Cigna (CI) 2 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by for The Cigna Group's First Quarter 2024 Results Review. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. We'll begin by turning the conference over to Ralph Giacobbe. Please go ahead.

Good morning. Thank you for joining today's call. Vice Investor Senior Giacobbe, Ralph President Relations. of I'm Cigna this David Chief Executive Cordani, me of Officer; on President Cigna Officer Services. are Chief line the The Officer and Financial and With of The Cigna and Eric Health morning Group's Executive Evanko, Officer Chief and Evernorth Healthcare; Group President Brian Palmer, Chief Executive and Chairman of

our number updated today, David outlook financial and of a topics, remarks cover quarter including our In results XXXX. will and financial for first our Brian

Following remarks, for prepared David, their will Brian be Q&A. and available Eric

performance. our in differ cautionary most results in with from risks A actual uncertainties current reconciliation As the financial of the Relations in adjusted of earnings determined to noted uncertainties including statements which the of States, today, measures GAAP. as forward-looking United income revenues, from earnings adjusted materially SEC. and today's filed income loss per directly principal today's share certain These and measures, in contained adjusted are statements labeled terms our we GAAP reports posted regarding our revenues, measures, is release we including in We statements, not note are that the to in subject cause earnings or risks accordance XXXX performance. In adjusted basis comparable could earnings section operations the in shareholders otherwise future release, known as for with respectively, when describing financial the and our Investor which contained A on is and cignagroup.com. these measures results, accounting and will net be our and total some income description use recent our to principles to and the financial operations from release, accepted use is expectations. of remarks generally same these making outlook our most the

loss few or $XXX items by financial pertaining first will This recorded of driven cover share. In the per from adjusted $X.XX per the we a over, call a quarter, excluded million results. discussion from GAAP billion $X.XX after-tax, share, adjusted to operations loss net is VillageMD $X.X turning primarily Before per to income of I noncash is charge. impairment share our net This in and realized investment related shareholders' results. earnings financial our or of

recorded quarterly in the special also of included item million of $X.XX are special net an after-tax charge financial $X our or share. per items supplement. We Details

described our earnings adjusted As adjusted are per financial adjusted revenues special results. and in income from today's release, from excluded share operations, in items discussion of

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

on our our Ralph. clients, Thanks, In growth. the our And continue delivering and to I'll joining our into as strategic momentum results for Good for our patients differentiated of and quarterly posted you strong build customers, we drivers for quarter call. continued partners. morning, our key quarter, the value performance thank Today, company everyone, we and discuss XXXX. coming first

will of position, from to the your then minutes on a financial quarter, increased affordability and those focus our talking benefit about our and full outlook results XXXX additional for our capital and for drive Specialty market our about the serve. review few the questions. during take we spend I'll year business biosimilars in we'll Brian details Specifically, greater our Then

So let's started. get

results of And $XX.X have year, per per capabilities, to demonstrate share billion, guidance momentum execution for our full innovative and for during industry. In delivered a These approaches earnings the time and share The the positive we quarter, adjusted our our Group dynamic at that $X.XX. earnings of start differentiated disruptive $XX.XX. and I'm pleased Cigna year to our revenue increased given to report strong disciplined adjusted total least

and Our Cardiodiabesity, given insights cost recent with is Benefit plans, more solution than our invest clients reducing EnCircleRx strong possible solutions innovative drug outcomes businesses, is Starting on EnCircleRx. traction our record tailwinds large built platform. In Specialty and coverage. providing continue strong from our pleased in in businesses line expectations. government and revenue which health patients continued adjusted growth. with commercial clients related with from adds value million deep chain data-driven affordability reflecting organizations. Services, our track to our the and how we businesses, were businesses, we predictability, EnCircleRx with portfolio innovation Growth Pharmacy decade-plus for otherwise, proven We're continue ensure by Services are offering employers our access already and we our in speak results that and to success. In Health benefit and our interest enrolled. to results made line double-digit This GLP-X with a to Said Services, a evolving pharmaceutical drive in as lives high-growth gain enhancing new positioned focuses A X expectations, solutions Accelerated our well-balanced our have of on our landscape our to expertise. Care foundational our results supply with example also continue of foundational our and Evernorth greater with we're are pleased for secular our rapidly diverse in

few CuraScript set is Care As businesses moments. about of Specialty more businesses. a Service and reminder, Accredo, diverse Distribution in I'll talk emerging our includes and this specialty a

are launch with home number our behavioral virtual, Evernorth are Group cost investing XX.X%. care. medical disciplined care, its pleased we platform, ratio, with convenience expanded states of another achieved and the X affordability Care areas, patients we pleased District quarter which benefits and Columbia, strong already In with Behavioral strong making in our health was is Care pricing, Healthcare, Cigna the medical program. In have With since our on We're access care performance. and and progress for focus base including of accountable we our a our plus we and in performance Services, of

we outpaced to business another good leverage for access is and employer high-performing Our networks continue enabled our expand year as value. U.S. and services overall digitally to

Day, experiences drives At Specialty, patients. piloted discussed broader out our solutions, including being by the improving Pathwell care reducing the costs within suite therapies seen value which of now our client our results Pathwell we with solution, for strong and adoption. is drugs which Bone & outcomes rolled suite XXXX with we've for and we Pathwell Joint Investor and and Also Pathwell in associated specialty is

which annual spend. suffer than $XXX of X in X musculoskeletal results context, billion more For adults from in condition, a

of at patient a with to has resulted while and the hip satisfaction also combined and time. uses network, in We're to national strong our delivering for results, meaningful right digital care knee, with savings solution seeing Our spine curated innovative clients the conditions from concierge services clinical guide pathway already right and XX% patients our experience shoulder personalized program. this

health. international to Turning

toward continue results by targeted focus businesses on waiting be globally April period geographies. progress solutions our of health for which to sale also given focus making with HCSC. It's strong important localized HCSC continue occurred Hart-Scott-Rodino through good in services business, these our the remains to under sharpen our Act, The the and to our note, the sale XX. on certain our mobile track Medicare our Our to we repositioning high-quality of are to book In individual actions we of on exchange population. businesses expiration

as of of high-performing review businesses. agreement As serve of the XXXX our Medicare Advantage with in suite will to services. broad with expected customers ] by regulatory And first divested Evernorth to transition such, [ quarter The the this the services these DOJ seniors the include complete. through HCSC, we is continue our who closing, under the planned. for close transaction will is transaction After

businesses quality Taken the together, and of our year we're well and They value strength another growth the for reflect with of results position sustained quarter. us pleased attractive creation. and first our for

Overall, and want market I services, Evernorth, our at on specialty represents and is a billion minutes large $XXX large spend industry leader. growing, Evernorth we is is and look forward. already which opportunity a the Now portfolio to growth well-established businesses the is specialty accelerated today fast of as yet few about within

double-digit quarter. be growth to continues with first revenue performance Our in the strong

Accredo, we capabilities are while of unique and assets in Distribution market, Path in with Care differentiated. something leader impact. over and highly reach Specialty truly built offers industry, combination expand And decades innovate are the and the we our CuraScript and to Our our the and capabilities that continue offerings

HUMIRA by that available will or either patients. Currently, we Accredo just an out-of-pocket interchangeable them one are their They Accredo's specialty available Therapeutic of $X supported Evernorth while have eligible trained the are for Accredo For cost support our clock, for the Center last HUMIRA to biosimilars. patients patients and needs use for inflammatory and plans. XXX,XXX who more in a around these nurses biosimilar than meet significant driving the Resource serve announced pharmacists savings of example, for week, individual patients conditions health and

or We will varying dosage needs. interchangeable another provide high biosimilars, on low put be and based concentration to patient way, able levels both

to we Pharmaceuticals, in at with multiple launched agreements for pharmacy have clients who this, which patients we manufacturers all Evernorth's accomplish To in will of individual we priced and Accredo service distributor, will these place biosimilars. year. And about patients, access in will HUMIRA XXXX. average than pharmaceutical addition patients be biosimilars back and will per Quallent The $X,XXX lower label on private save estimate our have to produce that biosimilars of XX% benefit

of HUMIRA. the of goes in continue over creation or in choice opportunity nearly serve. introduction to annual half to generics By specialty and XXXX, those growth we see the introduced multiyear the States. This biosimilar to additional enables of expect beyond benefit subject top XX translates value for drive a the to spend, and biosimilars The tailwind creates us billion drugs for well $XXX that United competition. to Importantly, biosimilars we

opportunities about ahead in excited very we're Clearly, specialty. the we growth see

such our cornerstone accelerated Evernorth of and specialty continue confidence within I biosimilar launch growth businesses in just are the discussed. the leading innovation, to Our a and position fuel capabilities will as our

quarter, This of at met higher puts well growth quarter. our clients, commitments, to toward EPS evolving We increased adjusted and dynamic $XX.XX. average the Now adjusted annual me patients needs performance partners end XX% customers, to financial share us full well. execute delivered per wrap up, we the let to of year earnings and of XX% to perform of least guidance marketplace. recap In We and the a commitment. $X.XX for our continued we've our for midst long-term performance the including in on our EPS the our

Cigna Looking commitments and over Healthcare. With innovations delivering that, execute meeting that driving as our in the remain by to creating greater Brian. share market serve on it benefit access to we value turn continue of our we expansion, in for over I'll by ahead, those focused and we strategy Evernorth affordability time and grow

Evernorth adjusted $X.XX Thank confidence strong across expectations, first strong per growth; and morning, X year-over-year report outlook We're adjusted cash XXXX operations share everyone. least momentum the year-over-year first quarter to you, billion. continued Cigna earnings consolidated full for earnings to reflecting per fundamentals us Good of year the of our from at which earnings our David. $X.X highlights growth our represents share of $XX.XX. pretax revenue and [indiscernible] XX% XX% platforms, to pleased flow increase billion, The year and with or the $XX.X a growth; give start above include: of adjusted Healthcare. Key quarter financial to businesses

in the changed in I'd quarter of turn to incremental the our first health segment quarter. that first the our like We are expenses results, I reflected to briefly Before disruption experienced results. impact care operating discuss

within strong we a I'll dynamic through in events, of further delivered moments. and operating some that and Despite few our unexpected had managing very teams are disruption start a claim payments submissions Cigna we to Healthcare, year the discuss And environment. a to these proud

our Now results. turning to segment

on I'll First, comment Evernorth.

adjusted were billion, revenues First pretax with were $X.X Evernorth quarter in line and earnings expectations. XXXX $XX.X billion

Specialty As adjusted namely and discussed we're Services in Day at Services. segments revenue Evernorth, Investor starting Pharmacy our and Care and earnings operating providing this Benefit within quarter, for pretax March, X our

Centene grew earnings including Overall, implementation Care pleased in For Benefit growth the driven the wins, and and results pretax offset $XXX with million, start Pretax continues line reflecting new costs. XX%, net expectations. Pharmacy X. Specialty revenue with Services increased the on perform $XXX increased million, year. onboarding by adjusted January of the starting we're client were well, to adjusted and revenue XX%. And Evernorth to earnings impact quarter, Services business to by

Turning to Healthcare. Cigna

and partially lower First and adjusted offset were results higher first expenses by adjusted XXXX pretax ratio, revenues were than by a favorable net SG&A $X.X earnings expectations, were quarter Cigna $XX.X quarter care better billion. driven billion, investment medical Healthcare income.

cost planned The from pricing in execution medical the we benefited effective of and elevated and ratio XXXX. care the levels first on of price continuation as for focus initiatives XX.X% quarter experienced our affordability industry trend

caused quarter As first noted disruption processing incident to claims some earlier, Change submissions. the Healthcare operations, and including

the the XX. out incremental in incremental Within we that approximately The $XXX Cigna reserve been of to paid Approximately booked Healthcare reserves but X/X as claims to claims we paid received this were March quarter, not to relating million since of in providers. disruption. have out pertains

reserve The balance of over the our first but confident the the quarter balance remain incurred in represents the not estimate trend We reserve yet Change of cost and incremental an posture specifically year. pertaining projections claims reported, of Healthcare disruption. to

individual our our profitability. expectations quarter exchange total Healthcare Moving following with delivered geographies includes XX.X Cigna results customers. in strong book ended the in is million reduction of with in repositioning enrollment, a This improve to certain Cigna Overall, We to to quarter. overall line and our the Healthcare medical medical the customers.

Our continue value-based Cigna record our care. from Healthcare decade-plus benefit results track to of

and We through have to continued our strategy outcomes to further and driving clients framework. our for patients quality care committed remain Evernorth partnership-oriented with affordability Care value-based Accountable evolve and this

in which we earnings. quarter, comments, recognized adjusted a charge impairment related excluded our noncash mentioned the from during his to VillageMD, Ralph As opening is

alter This incentives to forward-looking where care we VillageMD. make does including continue progress not aligning our in accounting with with item strategy. providers, value-based

geographic launched to build that Our we partnership early has progress. already markets, will upon and and seek targeted

full for turning Now outlook XXXX. to our year

Care. expect $XX.XX now least year at an from our least Health or full growth in $X.XXX and income adjusted be We at Cigna continue share, Evernorth from underlying operations consolidated XXXX We to strong expect to billion prior increase outlook. per

adjusted in share in remaining XXXX half be second earnings approximately We XX% to half. the XX% per first and the cadence expect the the

each full of In of XXXX for expect we growth continue least year platforms. Evernorth, adjusted turning XXXX Now to $X outlook our to earnings at our billion.

adjusted year-over-year. quarter pretax We earnings to digits expect grow mid-single Evernorth's second

For Cigna the prior reflect strength $X.XXX the and year least the Healthcare, continued confidence results our earnings our billion, quarter from rest adjusted year. at we XXXX of of to now an increase for expect of full guidance first

Healthcare XX% earnings. to of We adjusted second approximately the year pretax in adjusted expect quarter be full earnings Cigna pretax

XX high We year prior to medical points also of full of to from basis the in XX.X% be ratio improvement the our now expect the range XXXX care an end of range. XX.X%,

quarter full be second our year our guidance medical expect to we range. Additionally, care ratio within

XXXX management our position. capital to Turning

issuance, debt-to-capitalization ration to increase XX.X% XX February. March entered repurchase as XX.X% of Our we the in was of share compared of the reflects primarily to as part due The debt December accelerated XX, timing in agreement XXXX.

target to XX%. long-term approximately continue debt-to-capitalization ratio a We of

flow flow We at to $XX our operations expect to use continue and continue this from repurchase billion expect share of cash majority discretionary cash to least for of the we year.

continues guidance XXX shares range be our year full average of Additionally, to the in weighted million assume XXX outstanding shares. million to to

of our by outlook sheet the strength flow highly driven model. remains balance efficient and strong Our cash service-based

recap. Now to

of Healthcare. Evernorth X reflects medical strong Our results within ahead care momentum XXXX over least outlook turn to sustained were and the while call. the posture And by platforms, prudent full maintain our our driven at year continuing strength the Cigna We're deliver in this growth ratio to for XXXX and a Q&A of our consolidated we'll the of first confident Cigna with of earnings fundamentals it environment. expectations, our dynamic quarter portion Healthcare, share. And adjusted that, on per updated our $XX.XX of operator ability in to the

Wolfe Research. Justin from question Instructions] [Operator Our Lake comes first with

kind early I PBM RFP view membership your for into ask wanted on to XXXX. about of cycle and

the this big of kind kind your losses in bigger maybe the far of or kind then XXXX you terms so RFP account? year, side, of about had you've care view that Any on strength on curious wins and RFPs. the given managed of on know of Just national the PBM stuff

David. it's Justin,

Cigna Accounts in Let start to [indiscernible] National Evernorth come me Brian Eric framework. specifically activity. from to the for ask the then through And framework Healthcare,

note start. resonate. a to We in season's Eric. our The Justin, the it's of a continues that strength off I to competitive selling would good solutions Overall, market. operate

specific are our good the about feeling would our ability our about to good the positioning. There's note call side loss but or existing either retain continue quite feel to that I win we out on would So no transactions clients. that

remaining rates retention are strong. Our really

mid-XXs smaller tailwinds We at our out No business XXXX, the book I'd into to expect But result for I'm when going positioning. is we'll for or out, last end well. XXXX consistent the I a in about deliver up look in compared of better note good bit quite with specific call as bid or to from the a portion we also major its feeling as performance strong that our in our number of years a year. prior little clients we'll perspective. years and aggregate, actually XXXX year or of number next retention headwinds would

Brian, Cigna Healthcare?

Thanks, Eric.

uptick Justin, will, last terms have at which volumes our national existing of cycle good business, this directionally that bid of less than total have. time, of David's the so just an as out Cigna do which did we to terms really to the in few at our year that's for we this points in is year said, this into is point of That our in point, the deep similar amount year offer. business, of compared And in clients, relative We only FX, U.S. also time. RFP terms last this a number if year at we you of to certainly we're component important an accounts Healthcare a in half XXXX, Cigna but our employer have Healthcare I'd customers. to

indicative calling something needs appreciate, bubble be these large for Many a capabilities. and health opportunities solution employers vendors after finally, that each effect and solutions, but continue of use point up are for demand headed. digitally with to continued you themes demand been care to few where enabled fatigue. that along the substance benefits, more looking for mental we've tend from seeing also have navigation to then can national empowerment. pandemic. more And as I to market's think Now there's an or the point consolidate We're consumer of accounts unique as tend particularly

good big So here those we we're feeling where prepare but XXXX. themes sit as I'm for ourselves picture, we are seeing about

from JPMorgan. Our comes next Lisa question with Gill

on focus minute to I really for opportunity. a Specialty business the want the biosimilar and

about want market. to to that profitability. opportunity about really understand talked the But the they You I brought HUMIRA

So David, out. margin XXXX. margin When as this So about a we better $XXX incremental opportunity? think several you over opportunity the years, benefits think think about talked some layout billion those the better and next progression? lay a market this Is opportunities we can that -- Is if when how see we the by help about you get of maybe can just you to Specialty opportunity the to the share patients? business to about us I just

Lisa, it's David.

bit. start, Eric and Let a then I'll to little me ask expand

First, of in attributes put framing the quite you some your are I think helpful.

we've time. that. back, a switch some out we're We've that cutover clear prior nice phase also into or this And an quite very been accelerating for called and evolutionary opportunity that to Not stepping So meaningfully. this pretty be phase. X.X.XX would

a It's it's single digit. things $XXX X quite large. there's foremost, meaningfully, One, would think highlight level. I the growing specialty billion marketplace, macro and today, as and is And high stands it I first at

be levels to dosage $X we our Two, and a innovations a expertise, is require pharmacist physician like coming of are of the basis. growth supply the Our of able above that at chain and go-forward the expertise on rate significant but clinical programs breadth HUMIRA which forward facilitate copay precise engagement our to have use engagement capabilities. both data, that. relationships, given variety

as Eric, specialty profitability I as obviously, to directionally, lastly, it I'd greater able potentially and equal biosimilar value about, unit we're value to opportunity create the think ask patients. highly to service correlated hand you that forward. per us long be or the from a discussed then as and of this is we've ability, And go see our for differentiated over as to we to per the create our clients on to so contribution unit, We before,

very both growth, demand back ask that amount to to you we significant a and high see significant. Eric, we So value place and a capabilities attractive to peel create the I'll that have, one of is little needs that opportunity bit.

David our us places set enables I'd think a dynamics I there. particularly as where and earn Lisa, for positioned up clients then maybe there's ability. margins X attractive that Lisa, call great our David. Thanks, in create really to framework Great. to well Evernorth out is value

rare One a is assembled sure capabilities conditions, coming I'm coming know. the years right? the And as pipeline complicated there's those high-cost tremendous you these we've in of around drugs of in

at those to all CuraScript, We capabilities our to of the really get quite things handling, around required way therapies have the right the with controls are intense. logistics et patient the that through and the of that are Accredo, all some from the with cetera, these the are a manufacturer capabilities temperature-sensitive, to that

when we're we've market, So up capabilities market. of serve another there a value. sets attractive the example Similarly on And capabilities to recent drive the here sets for us us in assembled, the superior to bringing HUMIRA we're position are puts to that options uniquely position assembled example serve the our biosimilars, an us a uniquely of drive position have that in result. uniquely capabilities we've to that we in terms good the of market most to

brought Humana think, proposition and offering. a attractive together, Our an attractive sponsor out-of-pocket at we for plan a really cost $X patient is as

As margins. that drives that hits, the market attractive

for Evernorth are all we but really and the the years, coming that there. businesses the we're think we've the are and in those multiyear areas couple tailwinds expectations Specialty over positioned the be of set a a that those Now for margins will we the segment, basis factored well set into

Andrew Mok Barclays. with question Our next from comes

expectations. segments where are target ACA your the was on you us X% share to margins MLR tracking I range And in of help relative then you can X%? categories cost to elaborate better in you than your which understand Can could trends hoping individual quarter. are came

it's Brian. Andrew,

are first lead performance medical which incident, in expectations, to how we results So outperformance disruption the And Change strong ratio delivered pleased Healthcare Healthcare reiterate the income we delivered than just another despite Cigna good have our associated the I'd in quarter quarter. care to better off, quarter. the of in helped with to

relates across outpatient utilization lines, few inpatient patterns end claims quarter, of highlights just I'd as elevated of and Within the patterns We a remained business, of employer cost did Healthcare that categories, periods employer to trends the specifically categories. where throughout it the some in deceleration book was to comparison the that's for included but showed recent product the with in projections. utilization of historical the relative in some first these that our disruption, see provision based U.S. consistent IBNR share. well surgical as facility U.S. quarter to a expectations. level as Change reserves So the upon book modest favorability in in But also light

assumptions. employer U.S. quarter with is broadly first as well our the line in pricing expectations together, all performance as taken So

exchange within Now of bronze the seasonality greater degree have resulted in individual first had we did the in which XXXX percentage what quarter. higher timing this specifically, have More in than plans benefit a book, projected, year. a of we we a mix-related

book. the were Cigna then And business Medicare I'd income broadly created quarter. line that first in broadly for the International timing-related for was the in that businesses of expectations MCR exchange that also the note a finally, individual Healthcare in in with and performance line with our So But first quarter. benefit the expectations underlying and

the margins let As on the and it is me that of some kind exchange relates individual business with up, just shaping context. to start how

below X%. And margins large is by to a where about business we premium, payable. that that adjustment specifically, weighed You of billion might recall higher-than-expected XXXX, during risk X% down profit we long-term $X our X target and running of had was had states

pricing result that improve we So designed some in that understanding likely this expected. we margins, broadly And playing our strategy actions out were loss. is customer to would this as corrective took subsequently

that we first X% end toward is range the XXXX. the margin in expectation. down What our are are to tracking below quarter X%. is saw for the planning our slightly And you that margin but membership will in see of target assuming So current improvement sequentially, assumptions with consistent we book margins

question Fidel next Our Stephens. with from comes Scott

some that situation. hoping could context about the impairment, the same just if of double-click just resources being limited strategy Village talk about Village would align on see to now, right out sort was best would key that what you for the in Maybe more can of to your degree been you there VillageMD know Health. get what to the may be I but focusing investment. with that priorities hoping Brian you've I on maybe be talked that post the the

originally, how X.X% then stream. carrying be this of to on then dividend give investment could know there dividend investment be the if the the a And just going itself. you stream updated that and Wondering just was us the value at point would working? I

any curious impact the there's noncash that write-down. if just to from So

David. it's Scott,

part Brian me your up your question. Let to of first pick second the then question, on part the of ask and start I'll

of of asset. to despite likes the level, the what in the asset. innovate our strategic we changed, macro not at First, write-down write-down the one in terms a with has No Village were direction seeking

the market If broader of in Village that establishing. are the constrain clinics no doubt, as to, they driven step back, pulling new you I some the dislocation supply determining by growth that is the say, largely that that write-down the space, and some relative would they lines as were of is going hitting to well some

subspecialty in aligns were model care point, that go-deep precision value-based It data put care to accelerate versus with and their more already of performance thin and highly proven precise like footprint that our I more affordability, markets, very our -- incentives. of where value-based build established further. As but terms process. markets. Taking uses performance strategy in drive improve Village then the to to in cases, most go-deep to extenders quality data-driven that And it, markets care and strong engagement overall even highly specialty is and take to off Village's

are X at in that chassis. Evernorth the which of continue off evolve their to and we building to be build value-based Care pace, as with risk-bearing with capabilities we're of partner And positive providers very That's that able then care we process a entities Accountable and go-deep our brought those MSO markets, precision as forward care our of other capabilities the would to going capabilities.

nutshell, don't has of the performance. Brian, strategic grow well. itself? while established investment continues focus accelerate more that an been to the about So to And in where direction highly asset, we're we talk our Village on write-down hasn't some markets like because a changed and of go-deep you the perform helping why a don't

Scott, to on due the new the as investment is in the to collectible slightly in net when dividend and the million have us P&L. as the that is concluded value dividend the And carrying on future, the $XXX the of we we just accrue continue within to assessment, sheet. part the balance income financial relates it impairment that above components, line

Our next comes from with Sarah James question Cantor.

looking dosages step for of or be you've So dosage efficiency? HUMIRA. what us an idea next maybe there? importance the one further and able HUMIRA something having data the available at vary couple at wondering we to the take give gained talked if using And look I'm categories drug Is about should this big of you be there are you are venture, to after AI biosimilar. new in that could

David. It's

dimension you the made. question. Let question different me of A first to Eric your with start expand points by a little I'll second your ask couple then bit of -- on and

I referenced The that all and to capabilities is Specialty from structure. capabilities our this we think new is breadth Qual, made proven. to our to our CuraScript, business to established Accredo in reference XXXX. new established back you of performance that note Important well or

are not new. capabilities the So

the some your question with quite that but well to are we're new we've of been established time. opportunities for here talking precision opportunities, The

coming dosage our patients not the that relationship some levels. important. one to Second, all been support into need able you to come appreciate very at able position and patients multi-manufacturer that's before dosage us And put important, Important AI And in to to the I point at very that's that's need establish. to we've be of levels levels, support is variety I levels. dimension the and

the and sits it generative example, for from question we we and we additional about expect The might front to dimension that better in generative learning for there's through will is, presents do there's opportunity about us starting better, efficiently, question terms of are last machine a you faster, AI, today, to the to through way it. core X-tier your a is oversimplify. AI, opportunity lastly I'll One AI, that what for more of in think of value. initiatives the Now the tie as of the that in create through part AI And industry us, do of driving think variety your us value.

interventions, decision then Second back networks, you which tranche is The averages solutions, in to where and through. And direction. came more or points predictability of clinical take intervention in personalization. more third individual Either to drive predictability, specific precision is personalization little more variability of or to out more out terms bit intervention. a clinical

bring the and first, excited well to cautiously our go do and promise If be expand of in And why a furthest entering you capabilities it dosages. third we that, the so. to the little significant the there's able human in of third of second to a the you are because oversight more on said positioned that even think significant about precision as curve, requires are the amount testing in Having don't we're more Eric, go forward. breadth along intervention we forward. amount where just the we're we as about in

we're Evernorth. area the on on direct here. where really such impact actually capabilities, both an the Evernorth think touch patients have the David. and the points depth the clinical Great. I with to data, Thanks, information, and positioning the prescribers with positioning Sara, this on the exactly the focused touches has

we overall. broadly. the market maximum the the So really your chain, coupled Specific we got market. the available be last that's our number concentrations. solution the first dosages introduced exciting question, the our together, with elements, bring that to will effective to And an opportunity robust with all across in interchangeable biosimilar adalimumab is of supply solution week for proposition those coupled put We've

that. So about excited we're

opportunity, need clinical coupled data, I takeaway. the medicines with with the they technology ensure get with think at we're in theme is our coupled the to every really precision our patients, that working to

the other pipeline. of terms things In in

in that about years. coming come of handful a Eylea, all the next that mind things think these Just Prolia Neulasta, Stelara, couple to [indiscernible]

by XX see market spend look specialty And more biosimilar as top drugs years. of that David XX% at or if remarks, noted of to in or we coming the the X his biosimilar spend, prepared options the course you the for over X next or

and benefit for plan our medicines these affordability about to lever for and a patients to improved approved the be sponsors. life-changing excited really to of So opportunity this access the drive

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

get you on could much guess, extra I claim a then the and mentioned And Can visibility today you Services. of where and and that post is on a to change, was related If think first out Care just some costs Great. that. your change? here. there's a submission sense you questions do couple question I spike how Specialty

costs? else were of get down the on margins First with kind margins, something year-over-year. there similar dynamic time we're the Specialty? the is I pharmacy the Is that seeing driving why were implementation the margins Or margin down there? this a

Let bit little to ask the then frame back question. to change your a Brian the me peel on of and aspect macro specifics just

prioritization. and of our felt proud just across want I was foremost, foremost, the how and I prioritize, disruption underscore how indisputably, And first am the team access-to-care to First industry.

to continue then programs, to your In leverage, need possible, us team relative to to do. flex tirelessly And comes cost to professional expand addition you flex back variety of to staffing vendors operational expect, that be do levels. dimension. service a what as enable and member and had, able to of our service we to Part other working health then to care support. And where that, might

that he side Brian piece ask way Part change our we is disruption, first ensure were deliver positioned and services the up by we influenced is that SG&A that to at we'll through the were reserving medical I'll that of of him Brian? As reamplify but walked ratio cost we in, to in through, the steps equation. the necessary. look quarter, separate then the And the the

so Yes. what earlier, I bit Thanks, a these it's but little think I be comments to Kevin, covered David. important reamplify. redundant might Kevin,

And reflected did level to we across quarter. some in all flagged enterprise, the The which, submissions associated some the we incremental did we and I to reserves $XXX specifically through that of of with the have disruption million So additional in our manage of expenses were dynamic. payments claims Change able successfully specific are operating and results. have Healthcare earlier,

essentially in About that Those paid. been yet where are late quarter X/X timing submitted all a not paid. and is of were the issue claims had the now purely

purely issue. of a kind that's timing So

and normal The incremental with it, incurred of that of over other, to due is the workflows. provider our X/X IBNR, the call item yet claims were Healthcare disruptive reserve reported associated above the Change estimate not but

have and of operated the month level a as and protocols Feel put we're relates about it reserving visibility feel expected. quarter, our our expectations the that plus a our and year the out quarter I'd as trend about clinical Now also outlook of of full forward. to end better good the cost and during we from all good note that posture. programs

the estimate when to that certainly the otherwise have we do than prioritize care transpired while quarter. utilization it disruption within would we So access what in occurred, higher resulted not

and of the quarter the delivered Cigna proud disruption. good a rallied here we're team the way despite So

Evernorth. of the of the As performance within Specialty Services first Care segment this very it with We're, relates to business. pleased and all,

over growth forward of by the and operating Specialty we You Care going as Services prior the well. X% about, period a multiyear and feel to is really indicated good see can it for questions that our as annual something some XX% average was segment

was there revenue of year-over-year revenue note first also growth in quarter, years growth the previously. double-digit You'll after XX% several

quarter-to-quarter was quarter segment, rate in segment a in SG&A timing-related by particularly will show XXXX first income this operating strong and Specialty in Now income within variability. for Services at performance which items. other in particular, impacted And included some the Evernorth quarter the income some operating level first growth and impacts Care

while read quarter-to-quarter I a onetime in caused variability. anything into any margin So of bit matter a that factors the down more terms it, that year-over-year, is would not of of

with Our next question from comes A.J. UBS. Rice

for of as the majority back that capital Do go think up the to as would repurchases. And you question. coming flow you how fit potentially in an about deployment transactions the back discretionary know, Let or of me how in you entirety doing XXXX? for the do to the go would market, a you on Brian, priorities priorities? have then all the estimate target that of would much cash first of might those share the updated ability I the half. end updated much into do you gave capital you to guys anything half that And repurchase on year, thoughts Any that? landscape in year mentioned the the to for is

A.J., it's David.

your take on first Let your portion part question of first ask pick me up the and to second of question. then the Brian

et needs are The grow, have second portion innovate, changed, the capital ensure assets Big of upfront picture capital your cetera. not business that priorities priorities. has to the question continue to

underlying So growth, CapEx et budget, capital our cetera.

strategic of portion the on very our year always and returned to through XXXX is where attractive shareholders. financially significant of be continue I'll systematically to opportunities share that our to capital portion to M&A. top to we of a M&A will back excess return the capital dividend. Specific another come Second, shareholders at attractive. look for repurchase, priorities. And excess third,

growth the discussed growth is As recent of Day, our Investor we underpinnings in at grounded our strategy model. organic our proven

the ability our to continue the growth we're attractive about outlook. new of very to accelerated innovate of businesses them excited acceleration market, with So to bring continue and foundational and to the couples coupled harness businesses attractive organic and sustained our drives services performance and profile, our our

project. in as at about estimated to to And M&A, production Investor continue strong look portfolio. capabilities. for be addressable as that again, forward the about be $XX I'll we market year. to relative either performing strategy ask disciplined Brian, share the capability we'll discussed repurchase we our cash reach outlook But to organic X Day, is is open, and over the expansion, expansion or years grounded billion and Our related next talk yet evaluating the to is growth flow you

terms speaking, Broadly in framework our deployment. our we at our for Investor guide conveyed continues what capital Day to of actions

capital remains our very health strong. So

flow from here XXXX. our one cash of is billion $XX generation company's operations strong least greatest at expect in strengths. the And cash of to continue We

first So and reinvestment. priorities focus, deployment foremost, capital on the continue to internal

an remain to that, dividend. we shareholder attractive committed Following

then balance our Of will strategic or be repurchase. the debt-to-cap course, XX% to deployable for of targeted over share And time. debt our we'll repay maintain capital ratio utilized M&A

to in share reflected repurchase. to includes as to flow in continue the question. on Now repurchase, expect end completing of as year And the as David the execute the used the billion and as Thanks for average which cash to EPS be said, against guide track repurchase We we remain of June by for our outstanding weighted it full share well our shares $X the least XXXX. relates all year, plans discretionary specific guide. share XXXX to that's majority at for

Our next question comes from George Deutsche Bank. with Hill

better a talk ask little more HUMIRA. manufacturers? the way maybe I of do drive I'd particularly kind to bit sole to as number strategy to source about the guess, align and kind you like of specialty you a you guess more David, as relates drive market, about see with to the maybe cost the evaluate manufacturer using a even or company? guess kind a would in And it I margin lower patients for limited both of I the the kind Or opportunity different is of of opportunity, around single strategies for opportunity a better as

robust back number would Thanks choice we've broadly our approach. one up, portfolio a bit a clients we specialty, we've here Stepping sole grounded our space. dependent choices to sort here say, works single here, et our and how on thread set working that in of set programs, supply But a up is choice. not And it's or a maximum that cetera. this specifically have a suppliers Eric. is approach benefit that of assemble It to that's I question. and become taken and have providing applies the to set on their available, for approach to George, applies the in we of got fund ensure one

on well. think think is HUMIRA. approach value We proposition attractive a that we've so really positions really assembled here an we the this And us biosimilar

all share, $X on patient that the noted will before, plan with together per cost year. so I sponsors per [indiscernible] patient save average, $X,XXX an As when attractive taken -- price for

continue maximal with therapies continue approach maximum So us the come stay positioned well new market. new effectiveness and it flexibility to that to maximum to will to drive and for clinical entrants choice, as

next from Our question Erin Wright Morgan Stanley. comes with

opportunities a around bit the just can you understand on And little similar seeing you little as do categories? expectations? the How GLP-Xs just economics it bit see of relative little that's GLP-Xs. A other I about in program? you're sort talk And your a sort traction out are the bit to therapeutic unique, of playing unfolds though.

can looking there's for respect from a managing Erin, it's as with interest clients medicines. help affordability need so Eric. our GLP-Xs significant these here. you imagine, They're in to Yes, of with the

and to be supply of the right our first set kind. together that supports for the a a which at to up brings It resources that's time lasting. make Day chain our our It's clients to we've we for then highlighted of within get with a bit EnCircleRx and talked our really of managed solution and kind pharmacy help is procurement really clinical its here. with right impacts Our the and them works and capabilities, about sure now, Investor are value clinical expertise clinical network patients additional constructs markers solution,

get effectively manage guarantee clients. that's program. commitments to to we outcomes their in fees a you our to all our those When is clients don't in up clients us get that return on back position and fees And formed And based position us or to our put together, fees. be meet this guaranteed that our to to guarantee if clients, the our pay our capabilities a to

to Scripts on else outcomes-oriented we're and like on but history program add? deliver long specific this. note unique we've value-based So this you'd and specific done against on would clinically a time is David, first not space we of the positioned or think conditions, in anything to well of markers, is this Express move a programs GLP-Xs, I this this. oriented Evernorth

ago the to that put to was Erin, pathway discussed we Sure, next years it, of of just going innovation thank pharmacological we've as before, top that we define the And many decade. you. the the wrap identified believe over

it GLP-X the had conversation as market the therapies in we there's fact the use conversation, or the almost the on XX can previously back illustration an reflect or today You and that pipeline. of just X,XXX in gene biosimilar

able point the and ability benefit of the patient-centric that the a example to are convert the a with model So the us put today. future. And clients clinically the into to harness data-driven investment of years precise, for made pleased position future, today the we're is good we've the we're great mission-critical is physician-engaged very capabilities, and to innovation how to GLP-Xs a of multiple in

Our next with comes Cowen. Gary from question Taylor

just numbers-related. but Three-parter all

as kind it be stronger just material I the would Would Brian quarter, it MLR seasonality stop-loss the fourth quarter I of will continue year stop-loss it's normally MA on both a with true-up. reflect the general? absorbed of X/XX, know in finally, just sheet First in a balance of quarter? for we business? to do but year-to-year specialty adjusted on held I Are we unadjusted headwind business? answer, there back margin, Brian's Two, MA. the And quarter MLR? on a to that in expectations. think the know MA of in question to in ramping -- long, had P&L normal first all sale from a about PBM big And Kevin's heard benefit the wonder said But sort like line how be Or was then year? and included the fourth rest the

those I'll one-by-one of it's each to try take here. Gary, questions Brian.

about continues segment example, So the in Healthcare HCSC. the Cigna can Page in I on supplement, is as you for to the it reflected is relates X, business to think divested to see the Cigna Medicare, as relative which it the be see, the it that you'll financial needle results And of quarterly until It breakdown. the much overall business, such Cigna our premium presence, move represents doesn't for the to small as Healthcare, Healthcare given employer relatively majority. XX% premium overall as the U.S. represents

the than whereas utilization through that year, overall a into in of see line performance higher overall bit, down continuing more is of up that. you levels with which broadly had we membership As is I fact XXXX, that first XXXX. And and comes can and the in some expectations to the that anticipated up back said, quarter market with is also associated the business our the that, others of

to relates book it As the business. stop of loss

had in In through. normalize we experience product as actually and favorable right. our profitability profit fourth that came will target some You're target the above quarter, XXXX XXXX to be and margin drove claims levels. back that it line expectation, that to

a It's in our So an and early so year. of have it full guidance the see income finally, to relates prudence medical the in And But profile, ratio the the what operating as the course seasonality, far, with ramp income seeing. Specialty far year. Services good performance. And it point in relates both on That the level the consistent tends stop to business about that's your services appropriate income the as for then benefit care pharmacy cetera. Care obviously, loss to over margin and we of et To we're year. segment. the so

Specialty in will the end So about quarter Services to model services to more have how that, quarter-to-quarter. tend benefit more you and from the show every when income think through pharmacy variability Care year. of sequential business, income specifically, growth the The

it's that rate income in growth over not achieved. upward annual So model 'XX, as the you time, XX% be we X% business fully think of that expect as an much about slope. how to to But average for to

Wilkes with question last Our Bernstein. comes Lance from

just on characteristics in your size of trends coverage employers what And are or you? that if GLP-Xs care, give employers I've look with like what 'XX? the on you for also wondering And a tag on your are could of employer sorts Are maybe along, question in for that? those value-based go-to-market be guaranteed Great. That GLP-X of characteristics helpful. I And more or a would particular interested whatnot, as just update solutions product. for got was then that interested strategy there similarly and insights. are

Lance, it's David.

little take question the the of specifically. And me portion Eric ask about VBC to your relative talk a then more the bit first questions GLP-X broadly. to Let

question. looking which employer an for is interesting You're characteristics,

click a of terms I of down value in it creation. think would couple I notches the

is VBC strategy, you creation twofold. opportunity, our So our it think about value

portfolio, broadly, for First commercial the illustration. an

a in interventions flows incentives, level and been at medical help accelerated about to specialty close with for gaps XX more in not items, outcome cost It this align to get Partnering a and itself one-day of than value. the bring overall admits, room care best professionals data care visits, We've more years. in and avoided extenders, and/or that whole quality more less a through variety care variety including likely relative to to and possible emergency come less working affordability manifests that. items to precision of readmissions

it approach quality you but as it's to some It's seeks design any guiding offering I most value-based add form. and totality, unique the it product a our ways, So that because resonates with specific restrictive. outcome. the a not not that and more broad-based now performance, care. care in for not moment with highest restrictive. highest way, precision program, Pathwell state shape redesign taking health episode takes view or or could network a It to which, plan to It's of employers not for in an in also now care state, data restrictive care

benefit employers employers And our ability time is in more for forward. to in their spending be employers. precision tend -- package solutions going the a our midsized small now way They a more have to of design. larger to initially and bit coordinated those are Those them

As musculoskeletal that we're example, fully really program I for and XX%. patient the was pleased noted, satisfaction,

create the a restrictive. speaking Pathwell inclusive employers. of broadly precision, standpoint, more resonates, in, able broadly terms about Eric that from broadly we're a of our to with segment as in strategy package within begin network your value, I'll to our It's a So to more and brings wants hence, talk how VBC Select level an question. to trade-offs employer not well. factor bit opportunity speaking, brings essentially little to more GLP-X ask that to is

their levels to turnover. coverage to that's to driven GLP-Xs the for to that, employers for book loss about note and broadly grounded of or lower would amounts approach the just David. tend by tend that employee in I not to but specifically, employer GLP-Xs they higher Lance, not benefits. of in to that it of tend spend, Thanks, employees, Great. on an on having larger business more lower with or in see whether turn, have weight take really size cover wants And number more, true covering certainly the think more of have but of our turnover, it's clients

We as tend needs see conditions their the the base clinical to of variations depending dependents clinical well. upon such and and employee underlying and

of So come of but it buying, really employer come to would decision couple to that the dimensions does employer-type mind. down those be

In of moderately now. terms saw XX% Express we coverage GLP-Xs last our about Scripts employer employer book, of We for noted trended call XX% year in that that the the loss. That's level. weight XX% relationships actually overall it had about to covering higher. I'd

So right XX%. to to about moving up from XX% XX%

remarks, and program, engagement will and degree over noted expect patients additional David prepared to noted and I increase. time. modest EnCircle access And high seeing provide earlier interest for we his continue that the a of in So a as with so

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

increase time for another delivered just want we're Broadly Thanks, a to per growth, our least able earnings up. for at track this we adjusted were Kit, to I share your points speaking, quarter, built to strong $XX.XX. morning. and record to make wrap have of few to a pleased which guidance on

businesses, across we of team dynamic executed environment XXXX. momentum Our our very focused a is into and our continues accelerate further and with navigate to to seek portfolio discipline

of objective of behalf every I'm colleagues And what want I day. the each on my and do clients, and the patients we our make partners around proud with who wake positive every world and serving. we've lives thank of in customers, pause our and day delivered up the people's to difference our

for your to and time, to you We against our to continue talking thank strategy. forward you we as again we look execute

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

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disconnect. We will now