In a decisive action to address concerns surrounding the soaring cost of medications, particularly insulin, the Federal Trade Commission (FTC) officially concluded a major settlement with Express Scripts, the pharmacy benefit management subsidiary of Cigna Group (NYSE: CI), on Wednesday. This agreement aims to dismantle practices deemed anticompetitive that have traditionally contributed to artificially elevated drug prices.
The settlement is projected to yield significant financial relief to American patients by potentially reducing out-of-pocket insulin expenses by as much as $7 billion over the upcoming decade. Moreover, the arrangement will also channel millions in new revenue annually into local pharmacies, bolstering community healthcare providers financially.
The SEC’s enforcement action is part of a broader strategy initiated following a formal complaint filed in September 2024 against three dominant pharmacy benefit managers: Cigna’s Express Scripts, CVS Health Inc.’s Caremark, and UnitedHealth Group Inc.’s Optum. The complaint alleges that these entities engaged in unfair and anticompetitive behaviors inflating list prices for insulin medications. The FTC's action includes related subsidiaries Caremark Rx and OptumRx.
As part of the settlement, Express Scripts agreed to implement enhanced transparency measures. These mandates include the disclosure of kickbacks paid to brokers and drug-level reporting obligations designed to align with existing federal price transparency regulations. The intention is to facilitate full public access and participation in programs such as TrumpRx, which focuses on medication affordability.
Previously, in January, the FTC had approved a 14-day stay of proceedings which postponed all discovery, filings, and hearings, pushing the evidentiary hearing date to July 1. Oral arguments pertaining to motions to dismiss were also rescheduled from January 22 to February 5. This temporary suspension impacts all respondents involved in the case.
Robust Quarterly Earnings Highlight Operational Strength
Simultaneously with the settlement news, Cigna released its fourth-quarter fiscal 2025 financial results, which showcased stronger than anticipated performance metrics. The company reported revenue of $72.49 billion, outpacing analyst consensus estimates of $69.83 billion, and marking a 10% year-over-year increase. This growth was principally driven by Evernorth Health Services’ solid performance, bolstered by expansion in existing client bases and noteworthy specialty pharmacy growth.
Regarding profitability, Cigna posted adjusted earnings per share of $8.08, surpassing the estimated $7.88. Adjusted operating income climbed 16% to reach $2.15 billion, propelled by increased contributions from both Cigna Healthcare and Evernorth Health Services.
Customer metrics further underscore expansion trends: total customer relationships rose 3% to 188.4 million, demonstrating gains through new sales and continued deepening of relationships specifically within Pharmacy Benefit Services and Behavioral Care segments. However, this growth was tempered somewhat by reductions following the HCSC transaction.
In terms of pharmacy-specific figures, total pharmacy customers grew 4% to 123.6 million through new sales and ongoing relationship growth. Conversely, total medical customers experienced a 5% decline, falling to 18.1 million.
Evernorth Health Services reported revenues of $63.06 billion, up 17%, with Pharmacy Benefit Services sales climbing 20% to $36.34 billion. These increases reflect strong organic growth fueled by both existing clients and new business acquisition. Meanwhile, Cigna Healthcare’s sales contracted 16%, posting $11.17 billion, with a medical care ratio of 88%, slightly higher than the 87.9% recorded the previous year.
Outlook and Dividend Enhancements
Looking ahead to fiscal 2026, Cigna anticipates revenues of approximately $280 billion, slightly below the consensus forecast of $283.86 billion. The company projects adjusted income from operations to be at least $7.95 billion, or a minimum of $30.25 per share, modestly trailing the consensus of $30.36 per share.
Medical care ratio guidance is set between 83.7% and 84.7%, with expected medical customer levels steady at roughly 18.1 million.
Complementing the solid financial results, the company announced a quarterly cash dividend increase to $1.56 per share, up from its previous payment of $1.51, reflecting a commitment to returning value to shareholders amid its strong earnings trajectory.
Market Reaction and Competitor Activity
Following these developments, Cigna’s stock showed a notable rise, climbing 3.53% to $281.29 at the time of publication, as per Benzinga Pro data. Analysts observe that the stock performance benefits from both the regulatory resolution and continued operational momentum.
In the broader sector context, peer companies included in the FTC complaint—CVS Health Corp. (NYSE: CVS) and UnitedHealth Group Inc. (NYSE: UNH)—demonstrated mixed market reactions, with CVS up 0.89% at $75.91 and UnitedHealth declining 3.02% to $267.59.