Cigna said it will pay $48.75 in cash and 0.2434 shares of stock of the combined company per Express Scripts share. Cigna will also assume about $15 billion in Express Scripts debt, the company said in a statement.
The deal comes at a time when consumers and lawmakers are increasingly concerned about rising health care costs, including prescription drugs. At the same time, other health care companies are consolidating as they seek to offer more services to customers including hospital chains and consumers. Pharmacy chain CVS Health Corp. last year agreed to buy insurer Aetna for almost $70 billion.
Pharmacy benefits managers, or PBMs, negotiate with pharmaceutical companies for lower prices, discounts and rebates on filled prescriptions. In exchange, the PBMs include the drug companies' products on their formularies, or the list of drugs covered by insurers.
PBMs claim they save consumers money by negotiating lower prices, although some critics and researchersthe middlemen effectively lead to higher prices as pharmaceutical companies rapidly boost prices in an effort to maintain their profit margins.
Cigna said the combined company will retain its name and be based at its headquarters in Bloomfield, Connecticut. Express Scripts will be headquartered in St. Louis, Missouri.