Walgreens said to be courting a former Cigna/Express Scripts executive to turn the company around

Meanwhile, Cigna to pay $172 million to settle whistleblower lawsuit over fraudulent Medicare Advantage practices.

At a time when Democrats and Republicans on Capitol Hill have taken aim at pharmacy benefit managers (PBMs), Walgreens Boots Alliance, the giant retailer with close to 8,700 nationwide, reportedly is trying to lure a former Cigna/Express Scripts executive out of retirement to run the company. 

It’s worth noting that Walgreens target is not just any former executive. It’s Tim Wentworth, the former CEO of Express Scripts, the very guy who led the sale of the St. Louis-based company to Cigna in 2018. 

That deal put Cigna near the very top of the PBM business in terms of market share and made the company, for all practical purposes, a PBM that’s also in the health insurance business. Only CVS/Aetna, whose Caremark PBM had a ~34% market share in 2022, is bigger. Cigna/Express Scripts’ market share was ~25% last year. Combined with UnitedHealth Group’s OptumRx, which came in at ~21% in 2022, those three big corporations control nearly 80% of the overall pharmacy benefit market. 

Walgreens clearly thinks it needs to be a contender in the pharmacy benefit management space–or at least be better able to compete with drugstore rival CVS (which has close to 10,000 retail stores) and stay afloat if not thrive in a rapidly changing environment.

In 2017, Walgreens bought a relatively small PBM, Prime Therapeutics, from 14 Blue Cross and Blue Shield plans. But the company has a ways to go in persuading Wall Street that it has saying power, especially in light of moves by Amazon, Walmart and other giants into the pharmaceutical supply chain and health care delivery. 

CVS has also been a Wall Street laggard this year, as I wrote recently, but Walgreens has not had a string of good days at the New York Stock Exchange in quite some time. Its shares closed at $22 and change Monday, far below a high of $84.67 it reached on November, 26, 2018. It’s largely been downhill ever since.

If Walgreens snags Wentworth, the company will have someone who understands the landscape–and helped shape it. 

SPEAKING OF CIGNA: The company was just fined $172 million by the U.S. Justice Department for gaming the Medicare Advantage program to get more money from taxpayers. The lawsuit reportedly was based at least in part on a whistleblower complaint.

Here’s how Damian Williams, U.S. Attorney for the Southern District of New York, characterized the company’s actions:

“For years, Cigna submitted to the Government false and invalid diagnosis information for its Medicare Advantage plan members. The reported diagnoses of serious and complex conditions were based solely on cursory in-home assessments by providers who did not perform necessary diagnostic testing and imaging. Cigna knew that these diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker.”

You can read the Justice Departments press release here. 

Cigna is far from alone in rigging the Medicare Advantage program to boost profits. In the weeks ahead, we’ll be reporting extensively on how the insurance industry is taking over Medicare by hook or by crook–and offer ideas on how to stop what former Center for Medicare and Medicare Services administrator Don Berwick has called the biggest transfer of wealth in American history.