The leaders of The Cigna Group are committing $3.5 billion to help grow a specialty pharmacy management company that was part of Walgreens Boots Alliance Inc. until late last month.
Cigna is investing in Shields Health Solutions, which works with more than 80 health systems in 47 states, through its Evernorth Health Services group and by buying Shields preferred stock. That division is home to a handful of ventures, including Express Scripts Pharmacy and Accredo Specialty Pharmacy. The latter of those focuses on patients and caregivers who are navigating complex and chronic conditions.
“Demand for specialty medications continues to grow at an accelerated pace, and Evernorth is uniquely positioned to serve the rapidly expanding number of individuals living with complex and chronic conditions and the doctors who care for them,” David Cordani, Cigna’s chairman and CEO, said in a statement. “Investing in Shields aligns with our commitment to delivering exceptional care across health care settings—from home to physician’s office or clinic, to hospital.”
Word of Shields’ financial boost from Cigna comes on the heels of private-equity firm Sycamore Partners announcing the completion of its purchase of Walgreens Boots Alliance. The Sycamore team immediately carved that holding company into five independent companies, one of them being Shields. Michael Ham, Shields’ CEO, said in a statement that the Sycamore and Cigna deals “demonstrate clear validation of our successful health system-focused specialty pharmacy strategy and patient-focused care model.”
Shields’ customer base runs to more than 1,000 hospitals and clinics across the country, and the company, which was founded in 2012 and is headquartered in Massachusetts, employs more than 2,000 people.
Cordani and his team will be crossing their fingers that their investment in the company will fare better than the last time they put money to work in part of the former Walgreens Boots portfolio: In late 2022, they invested $2.5 billion to buy preferred shares of Village MD, the primary-care venture that was then acquiring the specialty and urgent-care clinic operators at Summit Health-CityMD. The goal was to build a connection for Cigna insurance plan members to a broad network of care services.
But that investment soured quickly: In the spring of last year, Cigna executives said they were writing down $1.8 billion of their investment after Walgreens said it would close dozens of Village clinics. By the end of last year, Cigna had written off its entire investment and recorded a $2.7 billion loss.
Shares of Cigna (Ticker: CI) closed around $303 on Sept. 4 after climbing more than 1 percent that day. They are essentially flat over the past six months, leaving the company’s market capitalization at about $81 billion.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.