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Fortune Global 500

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Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

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G500-2023-Cigna

The insurer and health services company had a relatively slow year for revenue growth, but profits, at $6.7 billion, were up 24.3%. 
<ul> 
 	<li>Cigna has been working to expand “value-based” care models, which are designed to emphasize primary care and preventive medicine. To strengthen such care, Cigna entered into a strategic partnership with Walgreens-owned primary care provider VillageMD.</li> 
 	<li>Evernorth, Cigna’s service-provider arm, which also oversees the new VillageMD investment, has brought the company growth over recent years, and focuses on value-based care.</li> 
 	<li>Cigna Healthcare, the health-insurance benefits arm of the business, also expanded its margins and customer base.</li> 
</ul>

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The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500 2023-Cigna Group

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G500 2022-30-Cigna

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This year’s Fortune 500 marks the 68th running of the list.

F500 2022 Cigna

Global health services company Cigna had an up-and-down year. Despite bringing on an additional 8.4 million customers in its pharmacy division in 2021 and an 8.5% rise in sales, Cigna’s profits plummeted by 36% from 2020, to $5.37 billion. After years of litigation, an appeals court rejected Cigna’s attempt to claim a $1.85 billion breakup fee from Anthem in the wake of a merger agreement that fell apart a few years ago.

This year’s group delivered stellar revenue and profit growth, but it underperformed the broader stock market.

100 Fastest-Growing Companies

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-028-Cigna

If there’s one element you need to home in on to understand health insurer Cigna’s 2020 success, Evernorth is a pretty good place to start. The company climbed more than 50 spots on the Fortune 500 after completing its merger with pharmacy benefits manager Express Scripts. That sent its revenues skyrocketing—and then the pandemic hit. How did Cigna manage to deal with that buzz saw? The Evernorth subsidiary, which encompasses Express Scripts, brought in $30.6 billion in the first quarter of 2021 and moved to expand its plan memberships in five more states and 67 new counties. It doesn’t hurt that Evernorth acquired the virtual care platform MDLive at the beginning of 2021—at a time when telehealth demand is soaring.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-013-Cigna

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FGC 2021-Cigna

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-032-Cigna

Health insurer Cigna is enjoying a meteoric rise on the Global 500 this year, climbing 197 spots thanks to its merger with pharmacy benefits giant Express Scripts—yet another example of the trend toward "vertical integration" among large health care companies. The Express Scripts integration, completed in December 2018, fueled revenue growth that exceeded even Cigna’s own pre-merger expectations: Adjusted revenues for 2019 soared to $140 billion, compared with the $131 billion to $133 billion originally forecast.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-013-Cigna

Health insurer Cigna ranked 65th on the Fortune 500 last year. This year? A meteoric rise to 13th, the result of its merger with pharmacy benefits giant Express Scripts—and another instance of the trend toward vertical integration among large health care companies. The Express Scripts integration, completed in December 2018, fueled revenue growth that exceeded even Cigna’s own pre-merger expectations: Adjusted revenues for 2019 soared to $140 billion, compared with the $131 to $133 billion originally forecast.

Collectively, the ranked companies produced a three-year average shareholder return of 19%, vs. 11% for the S&P 500.

Fastest-Growing-Companies-2020-59-Cigna

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Fastest-growing Companies

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With roots dating back to 1792, the Cigna Group is an insurance and related services company serving millions of clients in the United States. Its Evernorth Health Services branch offers pharmacy benefits, home delivery, distribution, management solutions for plans, and health care providers. Meanwhile, the company’s Cigna Healthcare segment provides medical, behavioral health, dental, and other products to customers. In 2023, the business underwent a rebrand; Cigna Corp. changed its name to the Cigna Group, and its two segments became the primary business units.

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Cigna Group (CI): Company Profile, Stock Price, News, Rankings

legacy

Cigna Group

cigna group

Ladies and gentlemen, thank you for standing by for The Cigna Group's first quarter 2026 results review. At this time, all callers are in a listen-only mode. We will conduct a question-and-answer session later during the conference and review procedures on how to enter queue to ask questions at that time. If you should require assistance during the call, please press star zero on your touchtone phone. 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.

Great. Thanks. Good morning, everyone. Thanks for joining today's call. I'm Ralph Giacobbe, Senior Vice President of Investor Relations. With me on the line this morning are David Cordani, The Cigna Group's Chairman and Chief Executive Officer, Brian Evanko, President and Chief Operating Officer, and Ann Dennison, Chief Financial Officer. In our remarks today, David, Brian, and Ann will cover a number of topics, including our first quarter 2026 financial results and our financial outlook for 2026. Following their prepared remarks, David, Brian, and Ann will be available for Q&A. As noted in our earnings release, when describing our financial results, we use certain financial measures, including adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP.

A reconciliation of these measures to the most directly comparable GAAP measures, shareholders' net income and total revenues respectively, is contained in today's earnings release, which is posted in the Investor Relations section of thecignagroup.com. We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance. In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2026 and future performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the SEC.

Regarding our results, in the first quarter, we recorded after-tax special items charges of $322 million or $1.22 per share. Details of the special items are included in our quarterly financial supplement. Additionally, please note that when we make prospective comments regarding financial performance, including our full-year 2026 outlook, we will do so on a basis that includes the potential impact of future share repurchases and anticipated 2026 dividends. With that, I'll turn the call over to David.

Thanks, Ralph. Good morning, everyone, and thank you for joining us today. This call is somewhat bittersweet for me as it is my last quarterly earnings call after many years at The Cigna Group. As CEO, I participated in close to 70 of these calls with you, and I'm pleased to be able to share strong results again on this call. Today, I'll focus my remarks on our strong first quarter performance and how we continue to deliver in a dynamic operating environment. Then I'll take a moment to address our leadership transition on July first, when Brian Evanko will step into the CEO role to drive our company's next chapter of growth, and I'll transition to the role of Executive Chair.

Following my remarks, Brian will provide a more detailed update on our business platforms and performance, and then Ann will review additional details about our financial results and outlook, and then we'll move to your questions. Let's get started. I'm pleased to report that The Cigna Group delivered strong performance in the first quarter, including total revenues of $68.5 billion and adjusted earnings per share of $7.79. All while we continue our disciplined track record of reinvesting back at our businesses to fund growth, addressable market expansion, and innovation. With our performance, we're raising our full-year 2026 adjusted EPS outlook to at least $30.35, reflecting our disciplined approach and steady execution in an operating environment that continues to be shaped by many forces.

Two of these forces are clearly rising to the top for customers and employers. First, affordability, and second, the need for healthcare that is more personalized and as a result, easier to navigate. We are addressing these expectations in an environment where healthcare demand continues to rise, and the cost of new services like pharmaceuticals continue to grow at a rate greater than inflation. Against this backdrop, over the course of my tenure, there are three key attributes that our company has demonstrated time and again to fuel a successful track record of performance rooted in purpose and innovation. First, and perhaps most importantly, we've been steadfast in our commitment to put the customer at the center to make the healthcare journey more affordable, personalized, and overall easier to navigate.

This commitment is what spurred us to improve our prior authorization process as outlined in our first customer transparency report, which was released last month. Our goal is to make the process faster and more seamless while ensuring that care is delivered at the right time and right place appropriately and safely. To that end, we have removed hundreds of tests and procedures and services from prior authorization process in the U.S., decreasing the volume of medical prior authorizations by about 15%. Our commitment to the customer also drove us to take an active role within the industry, which last week announced further progress towards standardization of the prior authorization process. This is enabling greater automation and more seamless, efficient access to care while maintaining appropriate safeguards.

This announcement reflects continued progress on the voluntary commitments our industry made in June 2025 in coordination with HHS and CMS. Our company has taken a strategic and disciplined approach to the way we shape our business portfolio, which Brian will address more in a moment. Through our approach, we remain sharply focused on where we can deliver differentiated value, we feed those businesses with additional capabilities and resources. Where we cannot, we make the decision to exit. This process has honed our focus on the addressable markets where we have a right to win for the benefit of our customers, patients, and clients, which has been a critical driver in our success for many years.

Finally, we have a proven ability to innovate and perform even in the most challenging environments, whether that is in periods of accelerated medical costs or during the COVID-19 pandemic, just to name two. In moments like these, when customers' needs and behaviors change quickly, we've remained relentlessly focused on market centricity, customer centricity, and micro-segmentation. The introduction of our transformative rebate-free pharmacy service model is the most recent example. This multiyear investment in innovation will deliver the lowest price to the consumers for their brand drugs, which will be 30% lower, with full transparency each and every time. This model further deepens partnerships with independent pharmacists, including those critical ones in rural communities. We call this offering Signature, a name that reflects a new era in pharmacy services. Now before concluding my remarks, I also want to speak briefly to our upcoming leadership transition.

After my nearly 17 years as CEO of The Cigna Group, we are on track for a carefully planned transition on July 1st, when Brian will succeed me as CEO and take on the role, and I will take on the role of executive chair. Brian has a strong history of prioritizing customer and client needs in decision-making, grounded in our clear mission and enduring sense of purpose. Looking ahead, he is committed to further the use of data and AI to drive affordability and personalization, which in turn drives value and sustained growth. With a strong foundation and clear focus, I'm excited for Brian to take the helm to guide The Cigna Group to its next chapters of growth, and I look forward to working closely with Brian in my role as executive chair. Now let me wrap up and summarize the quarter and our results.

We delivered strong performance, giving us the confidence to raise our full-year guidance for 2026. We delivered total revenues of $68.5 billion and earnings per share of $7.79. Looking ahead, our increased adjusted EPS outlook of at least $30.35 reinforces the sustained growth, durability, and strength of our company. We are delivering in a highly dynamic environment, and we continue to invest with purpose through a customer-first orientation, driving disciplined portfolio shaping and innovating to personalize and modernize healthcare for the benefit of our customers and clients. We have a clear strategy and the right leadership team in place to capitalize on those opportunities ahead. With that, I'll turn the call over to Brian to discuss our results in more detail.

Thanks, David. Morning, everyone. First, I want to take a moment to thank David and acknowledge his strong leadership, both within our company and throughout the industry. Through his 35 years of service with the company, he has left an enduring legacy defined by an unwavering focus on meeting customer needs, a relentless partnership orientation toward others, and a deep commitment to the communities that we serve. It's been a privilege to work with him for so many years. Looking to the future, there's no question that the status quo in healthcare is unsustainable. Costs continue to rise, as does demand for healthcare services, an untenable equation. In this environment, the experiences that I have gained over my nearly three decades with the company have sharpened my understanding of the needs of those we serve and strengthened my commitment to continue to deliver on our mission.

I'm humbled and honored to take on the role of CEO in July with a focus on The Cigna Group becoming the clear leader in consumer-focused and AI-enabled health services, with an emphasis on clinically complex patients, making care more affordable and more personalized for those we serve. In my remarks today, I will cover several topics. First, I will share a few ways we are shaping our portfolio for the future aligned to our strategy. I will review our first quarter business performance across our growth platforms. I will go a bit deeper on ways that we are harnessing data, advanced analytics, and AI to deliver more affordable and more personalized healthcare services. Turning to our portfolio, we have a disciplined and consistent approach to ensure that our businesses are aligned to and support our strategic direction and can deliver differentiated value in the market.

Over the years, this approach has guided our decisions to either add to or subtract from our portfolio, which in turn has positioned our core healthcare businesses for sustainable growth. For example, last year, we added key capabilities in the highly attractive specialty pharmacy market. Our acquisition of CarepathRx provides us with further depth in infusion-related services. Our investment in Shields Health Solutions provides us the opportunity to partner more closely with hospitals and health systems who serve patients with complex care needs and rely on specialty medications.

On the other end of the spectrum are the businesses we have divested, where the assets no longer support our strategic direction or have reduced management focus from our core growth platforms. Our divestiture of our group life and disability business, which also meaningfully reduced the company's exposure to economic downturns, is a prime example, as is the more recent sale of our Medicare businesses. Divesting each of these assets enabled greater focus and investment in the remaining businesses within our portfolio, supporting our forward-looking growth path. In keeping with this portfolio shaping discipline, today we are announcing two additional actions. First, we are planning to exit our individual exchange business at the end of this year. We did not make this decision lightly and appreciate the importance of ensuring patients have continuity through the transition.

There are no changes to coverage or networks related to this announcement. We will support members through their open enrollment transitions into 2027. As our industry continues to make strong progress on standardizing and automating prior authorization services, we have decided to initiate a strategic review of alternatives for EviCore. EviCore is a part of enabling how care is evaluated and delivered across the industry, including working with numerous health plans to perform reviews and prior authorizations on their behalf. As David mentioned, prior authorization plays an important role in healthcare. We will explore options to continue delivering the highest level of service for health plans in the industry at large while maximizing long-term value.

We see the potential for different approaches to standardize prior authorization across the industry, improving transparency for customers and clients, reducing the administrative burden for providers, and creating efficiencies for the industry. Both of these actions reflect a deliberate strategy to sharpen our focus on our core platforms where we have the capabilities, positioning, and expertise to deliver differentiated value for the benefit of those we serve. Turning to our performance in the first quarter, we started the year with strong results across both Evernorth Health Services and Cigna Healthcare. Overall Evernorth earnings were slightly ahead of expectations. This was driven by the strength of our Specialty and Care Services businesses, which delivered adjusted earnings growth of 20% in the quarter, reflecting continued attractive volume growth.

As the specialty pharmacy marketplace continues to grow, we are well-positioned across our suite of solutions, our strong supply chain, and our expertise in inventory management and complex drug distribution. Our ability to deliver a strong clinical support model continues to have a positive impact for patients and clients alike. We see this through higher adoption and adherence rates once patients begin taking biosimilars and specialty generics, leading to better overall outcomes. Turning to Evernorth Pharmacy Benefit Services business, our results were in line with expectations. Our first quarter results reflect previously discussed impacts of large client renewals and investments as we progress toward our transformative new rebate-free model, aptly named Signature. This week, we met with hundreds of leaders from our largest pharmacy benefit services clients, and there are a few consistent themes we're hearing from clients and prospects alike about the direction of our business.

First, our forward-thinking innovation is resonating for its focus on the consumer, offering the lowest out-of-pocket cost at the pharmacy counter and helping clients navigate through a very complex and fluid external environment. As clients continue to face budget uncertainty driven by new drug launches and mid-year market disruptions, our new simplified model will give clients clear visibility into economic value and greater predictability. Second, they appreciate that we are proactively leading through regulatory and legislative changes. We continue to hear from clients and prospects that they are seeking clarity, predictability, and value for consumers. Our Signature model directly addresses these priorities and supports plan sponsors as they address their obligations today and in the future. Finally, our clients value our partnership in meeting their needs today while anticipating future needs. This feedback is reflected in a strong start to our 2027 Pharmacy Benefit Services selling season.

Finally, turning to Cigna Healthcare. Our earnings exceeded expectations in the quarter and grew 18% year-over-year, powered by solid persistency, continued disciplined execution, and MCR favorability. Our strong earnings performance is further enabled by our innovative offerings and focus on consumer experience improvements. Recently, Cigna Healthcare was ranked number one by J.D. Power in digital experience satisfaction among commercial health plan members for the second consecutive year. We are also seeing Clearity, our new copay-only medical plan launched late last year, generate strong market interest. In addition to its simplified product design, Clearity features externally derived clinical quality measures and a single digital front door that gives customers integrated access to care and their historical claims data through our myCigna app. Taken all together, we're pleased with our strong first quarter performance across both Evernorth and Cigna Healthcare.

The positive first quarter results and market momentum are further powered by our embrace of data and modern technology. By leveraging the combined power of data, advanced analytics, and AI, we're able to drive greater customer and client satisfaction through improved affordability of care and greater personalization of services. Let me offer a few examples, starting in our Specialty and Care Services businesses. Today, we are using agentic AI together with our clinical expertise to improve customer and patient experiences. This is enabling us to transform how prescriptions are processed, efficiently schedule prescription orders, and proactively identify patients who may need additional service. We do not use AI for clinical decision-making, but rather AI capabilities increase the speed and strengthen the decision quality of our highly experienced clinical teams. In Pharmacy Benefit Services, we are utilizing AI to enable better care and service to our customers.

This includes leveraging AI in our Signature model to improve member communication and notifications and help patients make decisions on their care journey, and enhancing our capabilities to deliver the lowest out-of-pocket cost for consumers, including with GLP-1s, where we continue to evolve as new oral solutions enter the market and prices decrease. In Cigna Healthcare, we are using AI-enabled capabilities to improve outcomes through risk prediction models, identifying complex patients earlier and connecting them with our clinical teams. Our predictive high-cost claimants model identifies members with increasing care needs earlier in their clinical journey. This then enables targeted clinical engagements that improve affordability, reduce acute utilization, and drive measurable cost savings. To date, for those customers engaged in this model, we see an average of $2,000 per member per year in savings, resulting in the elimination of unnecessary provider and ER visits.

This improved high-cost claimant prediction capability has benefits across Cigna Healthcare, for example, in the stop-loss business. More broadly, we are proactively helping our customers in highly personalized ways. A combination of our AI tools and contact centers and improved customer digital experiences led to a 20% drop in total inbound calls for digitally eligible customer in our Cigna Healthcare U.S. employer business and a 25% reduction for Pharmacy Benefit Services members when compared to just two years ago. Ultimately, these capabilities allow us to go beyond administrative enhancements and deliver better health outcomes. As I wrap up, I'd like to reiterate a few points. Some of the notable headlines from our strong first quarter include continued momentum in our specialty businesses, underscoring powerful secular growth, our differentiated capabilities, and our expanded suite of solutions.

Good progress on constructing our new Signature pharmacy benefits model and positive market reaction to our innovation and evolution, and Cigna Healthcare results exceeding expectations with performance supported by our innovative offerings and focus on the customer experience. As a result of this combined strength, we are pleased to increase our earnings guidance for the year to at least $30.35 per share. This is made possible by the great work of our teams and also through our continued deliberate focus on disciplined portfolio shaping, which ensures that the appropriate resources and support are pointed toward the growth of our core businesses. This morning, we announced the thoughtful sunsetting of our individual exchange business at the end of this year, as well as evaluating strategic options for EviCore.

Our results are also enabled by continued investments into harnessing the power of data, advanced analytics, and AI, driving new value creation and improved personalization and affordability for our customers. As we look to the future, I'm excited about the progress we've made to date and how we're leading the way building what's next in healthcare. With the most experienced leadership team in the industry and continued partnership with David as Executive Chair, I am confident we are well-positioned for continued growth and success. We look forward to hosting an investor day in September, where we'll share more and discuss advancements in each of our core businesses. Now I'll turn it over to Ann to cover our financial performance.

Thank you, Brian, and good morning, everyone. As Brian mentioned, we started the year with a strong first quarter performance. Key consolidated financial highlights for the first quarter include revenues of $68.5 billion and adjusted earnings per share of $7.79, representing 16% year-over-year EPS growth. With the first quarter results, we are raising our full-year 2026 adjusted earnings per share outlook to at least $30.35. This outlook reflects the positive momentum in our businesses while maintaining a prudent view of the current environment. Now turning to our segment results. I will first comment on Evernorth. First quarter 2026 revenues grew 9% to $58.4 billion, while pre-tax adjusted earnings grew 2% to $1.5 billion, slightly ahead of expectations.

Specialty and Care Services showed strong growth, with pre-tax adjusted earnings up 20% to $1.1 billion. This performance reflects continued momentum in our fastest-growing business, including strong demand for specialty drugs and increased biosimilar and specialty generic adoption, which are key levers for delivering affordability and value to patients and clients. Additionally, the income from our investment in Shields Health Solutions contributed to the growth in the quarter. Pharmacy Benefit Services pre-tax adjusted earnings decreased 28% to $394 million in line with expectations. The year-over-year decline of approximately $150 million in the quarter reflects the previously discussed renewal and extension of large client contracts, as well as investments associated with the transition to Signature, our new rebate-free pharmacy benefits model.

As those investments ramp through the year, the trajectory remains consistent with our prior commentary and expectations for the business. Taken together, Evernorth's first quarter results reflect a deliberate evolution towards Signature and greater focus on higher value care services and specialty capabilities. Turning to Cigna Healthcare. First quarter 2024 revenues were $11.5 billion and pre-tax adjusted earnings were $1.5 billion. The medical care ratio for the first quarter was 79.8%. Cigna Healthcare results were favorable to expectations in the first quarter, driven in part by lower flu volumes and weather-related care deferrals. This year, we also have seen a higher proportion of individual exchange members enrolled in Bronze plan, which results in a lower first-quarter MCR but does not change our outlook for the full year.

As Brian mentioned earlier, as part of the strategic shaping of our portfolio, we have made the decision to exit the individual exchange beginning in 2027. This will allow us to focus on areas where we can best offer differentiated value to make a more meaningful difference in the health and experiences of those we serve. Our financial expectations for our ACA Exchange business in 2026 remain unchanged. Overall, we are pleased with Cigna Healthcare's strong first quarter results. Now turning to our outlook for full-year 2026. Our first quarter performance was strong, and we are raising our full-year 2026 consolidated adjusted earnings per share outlook to at least $30.35, maintaining a disciplined and prudent approach to the full year.

Regarding the cadence of earnings, we expect second quarter adjusted earnings per share to be approximately 25% of the full-year outlook. In Evernorth, we continue to expect full-year 2026 adjusted income from operations of at least $6.9 billion, and we expect second quarter pre-tax adjusted earnings seasonality to be similar to historical patterns. For Cigna Healthcare, we now expect full-year pre-tax adjusted earnings of at least $4.525 billion, and we expect pre-tax adjusted earnings in the first half of the year to be slightly above 60% of the full-year outlook. We expect the second quarter medical care ratio to be slightly above the high end of the full year range, with a sequential increase reflecting typical seasonality and business mix compared to prior years. Our full-year medical care ratio guidance remains unchanged.

Turning to our 2026 capital management position. First quarter operating cash flow was $1.1 billion. We continue to expect the majority of 2026 operating cash flow to be realized in the second half of the year, consistent with our prior commentary and last year's pattern. Our debt to capitalization ratio was 42.3% as of March 31st, a 70 basis point improvement compared to year-end 2025. We expect this ratio to be lower by year-end 2026 as we balance debt repayment with other uses of capital, including share repurchase. Now to recap, our first quarter results reflect strong contributions from both Evernorth and Cigna Healthcare, disciplined execution, and the resilience of our diverse portfolio of businesses, giving us the confidence to raise our full-year 2026 adjusted earnings per share outlook to at least $30.35.

With that, we'll turn it over to the operator for the Q&A portion of the call.

Ladies and gentlemen, at this time, if you do have a question, please press star one on your touch-tone phone. If someone asks your question ahead of you can remove yourself from the queue by pressing star two. Also, if you're using a speakerphone, please pick up your handset before pressing the button. One moment please for the first question. Our first question comes from A.J. Rice with UBS. You may ask your question.

Hi, everybody. Dave, best wishes to you as you move forward. Brian, congratulations to you on the new role. I wondered maybe just to drill down a little bit more into what you're seeing as you roll out to your clients, the new PBM model. I know it doesn't go live for external clients till 2028, but you're well into the 2027 selling season, and I'm trying to think through if I'm making the transition to the new model as a client, do I need to give you more than the typical notice? Does it take longer lead time for me to make that transition? When do you think you'll get indications from clients as to the uptake there? Maybe just expand a little more on the comments around strong selling season.

How much is being driven by this discussion versus just the general market environment?

Morning, A.J. It's Brian. I'll try to take each of those components of your question. I appreciate the kind words and both David and I appreciate hearing that from you. Thanks. It's been a pleasure, obviously, working with you for many years. As it relates to Signature, our new rebate-free pharmacy benefits model, maybe I'll just step back and give you a little bit of context for how we got here and how to think about the next couple of selling cycles to your point. If you think about the challenges we have here with healthcare in America, the affordability of prescription drugs continues to be one of the top challenges facing both patients and therefore the entire pharmacy benefits industry.

This is particularly acute for high-cost branded prescriptions, which today represent just 10% of all the prescriptions in America, but nearly 90% of the total drug spending. All key stakeholders, whether that's employers, whether that's brokers, whether that's drug manufacturers themselves, acknowledge that the status quo is unsustainable. The market feedback thus far as it relates to our new rebate-free Signature model has been positive as clients and brokers invest the time to learn more of the details of our new model. As I noted earlier, we had hundreds of our largest clients together just this week and received a variety of helpful input from them.

Importantly, this model, though, is designed with the patient at the center, and our Price Assure capability guarantees patients the lowest possible out-of-pocket costs when they fill their prescriptions, whether that's through our negotiated price, whether that's the patient's co-pay or a cash pay alternative. If the patient does utilize a direct-to-consumer cash pay alternative, we'll ensure that out-of-pocket applies to their deductible. After we guided through some of these details, clients and brokers are excited about this model, intrigued to learn more about it. Our legacy rebate free model, it served the time and place, yet we're seeing increasing instances of unintended consequences where patient affordability is suffering. Additionally, we're seeing employers and other clients reviewing their obligations to employees and their family members and see the Signature model as a simpler way of ensuring that those needs are met.

Our capabilities are multidimensional and bespoke in the sense that they can meet a variety of unique client needs. As it relates to the selling season and how to think about this, the Signature model will become our standard model in 2028. As we've shared before, we expect at least 50% of our Evernorth Pharmacy Benefit Services members to be in the Signature model by year-end 2028. The PBS selling seasons tend to be long, as you know. By the end of this year, we'll have a much better picture as to the level of market interest to adopt come 01/01/2028. Right now, we are largely in the 2027 selling season, which is largely our existing models with continued evolution.

Some of the things we're seeing so far in 2027, though, we're on track for mid-90s or better retention again, which is consistent with historical norms. We ended 2026 with over 97% retention. Additionally, we've already secured some key new business wins for 2027 in Pharmacy Benefit Services, underscoring that our current solutions are resonating in the market. We're meeting the needs today, and we're preparing to meet the future needs with our new Signature model, which steps over many of the affordability challenges that are in place today. Hopefully that helps a little bit with reconciling all the different moving pieces. As it relates to 2027, our Cigna Healthcare book of business, our fully insured customers will fully adopt the new model. That's just a standard part of the renewal cycle with those individuals.

We're really excited about the future, and the Signature model points the way for the industry. Thanks for the question.

Thank you. Our next question comes from Kevin Fischbeck with Bank of America. You may ask your question.

Great. Thanks. Maybe just asking on the two these new data points about the reshaping the portfolio. Any way to think about the impact from the exchange side as far as capital you might recapture next year? And then the EviCore transaction, is that something that, you know, you were approached by, or is that something that you decided to do strategically? And should we be thinking about this as a transaction that would be slightly accretive, or is this kind of a neutral transaction economically? Thanks.

Morning, Kevin. It's Brian. Both of the portfolio shaping actions that we announced this morning, the sunsetting of our individual exchange business as well as exploring strategic alternatives for EviCore were decisions we took proactively. You should not think of those as a response to any sort of other market activity. Those were proactive, deliberate portfolio shaping decisions that we took after stepping back, continuing our long tradition of disciplined decision-making with the long-term orientation. As it relates to the individual exchanges, really there were two primary drivers of our decision to step away from that business. One, we did not see a clear path to scale this business to achieve meaningful impact within the context of The Cigna Group's aggregate size. The second factor is management focus for the organization.

This is small business for us today, and it's been shrinking in recent years. The decision will allow us to further intensify focus on our core growth platforms across The Cigna Group, notably our rapidly growing Specialty and Care Services businesses, our industry-leading Pharmacy Benefit Services business, and our flagship U.S. employer business within Cigna Healthcare. To your point on capital, we'll free up some amount of capital, but I wouldn't view that as particularly material, again, in the context of The Cigna Group. As it relates to EviCore, our announcement to explore strategic alternatives, again, is a result of a disciplined assessment process. You can think of this one really being driven by two primary factors as well.

Similar to my comments on the individual exchanges, the potential size of this asset within the context of The Cigna Group's portfolio made for a challenge relative to the ability to scale it and consume management attention and time. Secondly, as David discussed in his comments earlier, the continued progress around standardization and automation of prior authorization processes led us to step back and assess the future of the business within our portfolio. Over the past 18 months, we're proud to have voluntarily announced a series of commitments to improve the methodology and tools around prior authorizations. All of which ultimately are designed to simplify customer and provider experiences. Some of those commitments were specific to us, The Cigna Group, others were in partnership with HHS and other industry participants.

For example, just last week, we had a joint announcement related to the standardization of information that's required for many of the most commonly requested procedures. All these prior authorization enhancements through standardization and technological progress open new doors for EviCore business, which could potentially result in a partnership or a combination with other complementary industry participants. There is no transaction to discuss. This was a proactive step we took to shape the portfolio. Hopefully, that helps. We look forward to providing more details on all of this in the coming months.

Thank you. Our next question comes from Lisa Gill with J.P. Morgan. Your line is open. You may ask your question.

Thanks very much, and good morning. I just really had two things I wanted to better understand. One was just the cadence of the cost. You talked about $150 million in this quarter for the renewal plus the transition to the new model. How do I think about that for the rest of the year? Then secondly, very strong results when I think about specialty. Can you talk about some of the key drivers from a specialty perspective? Is this growth in existing clients? Is profit being driven by some of the comments you made earlier around biosimilars? Just if you can give us any color around how to think about your specialty business. Thanks.

Morning, Lisa. It's Brian. Maybe I'll start with just a few framing comments, and then Ann can pick up on some of the drivers from a financial perspective. Overall, we're really pleased that our Evernorth business in total was slightly ahead of expectations, powered by the strength in the Specialty and Care Services portfolio. As you think about the specialty business, this is a space with really strong secular tailwinds, as we've discussed before. We see the space growing, call it, mid- to high-single digits on a pure secular basis. Then we have strong differentiated company-specific capabilities to deploy against that. In the quarter, we saw strong volumes. We also saw strong biosimilar adoption, and we had contribution from the Shields investment that we made late last year.

Ann can unpack that a little bit further. In the Pharmacy Benefit Services business, we were pleased with the performance of that as well, being in line with expectations and a solid start to the year. You recall, we had two discrete headwinds stepping into the year, one being our proactive large client renewals, and the second being the investments to build out our new rebate-free Signature model. As I was discussing earlier with A.J., as we continue to deliver on the present, we're simultaneously preparing for tomorrow through the build-out socialization of our new Signature model with all key industry stakeholders, and that will be ready to scale in 2028. Ann, maybe you can pick up a bit on the two components of Evernorth.

Sure. I'll start with Specialty and Care first. You know, as Brian said, we're pleased with the results. We expected a strong first quarter in Specialty and Care, and we came in slightly ahead of expectations. We remain excited about the space, as Brian talked about. The strong performance in the quarter. Solid specialty volume growth. I'm gonna point to three things. That's one. The second is a continued mix towards more cost-efficient therapies, so biosimilars and specialty generics. Those are delivering meaningful savings to patients and clients while also lowering reported revenue and supporting higher margins for Evernorth. The third, and Brian touched on this, the contribution from Shields. Those are the three big drivers for the quarter.

Taken as a whole, you know, we're confident in delivering specialty and care at the high end of the growth range for this year. That's specialty and care. For PBS, I just wanna double down. Results were in line with our expectations and consistent with the prior commentary that we've given around proactive renewals and extension of the three large clients, as well as our planned investments to support our transition to Signature, our new rebate model. In the first quarter, if you just look at the dollars, PBS earnings were down about $150 million compared to last year first quarter.

As you think about the run rate of that and then a ramp-up of some of the spending around Signature is weighted towards the back half, the numbers are in line with our prior commentary and our guide, our overall guide for Evernorth. With that, again, PBS was in line with expectations, and we remain focused and excited about our transition to Signature and confident in our shaping of Evernorth for the full year.

Thank you. Our next question comes from Scott Fidel with Goldman Sachs. You may ask your question.

Thanks. Good morning. David, it's been quite a while over the last 70 earnings quarters with you, so appreciate all that dialogue over the years. Brian, congratulations to you. I guess, Brian, just in sort of the context of some of the strategic sort of updates that you've been talking about and some of the, you know, as you sort of transition into the C-suite, interested if you can maybe also frame it around the five growth pillars that, you know, have been sort of at the core of the growth strategy for a number of years. You know, but there's also been some evolution across some of those markets as well.

Curious around how you see the continuity around those five growth pillars, or do you see potentially, you know, putting your personal touch on those, that approach, to some degree as well? Thanks.

Morning, Scott. I appreciate the question and the kind words. I'm sure David does as well. Maybe I'll just give you a little bit of framing for how I'm thinking about the future of The Cigna Group when I step into the CEO role in July. I'll share a little bit of the problem statements that face our industry, a little bit of where we're focused, and hopefully that merges with your point on where we're gonna be focused from a growth standpoint. First off, I just start by reiterating my gratitude to David and our entire board for such a thoughtful planned transition as I step into this role. I'm simultaneously humbled and excited, if you will, to be stepping into such a big job here.

I also feel a strong sense of accountability to our customers, clients, business partners, shareholders, as well as my coworkers and their families. We're fortunate to be right now performing so well across The Cigna Group as we outlined in our release this morning. I'm able to build on that historical success, carry forward the momentum we have, and really attack the biggest problems in healthcare going forward. The problems that we see really are threefold. The first one is affordability. Second one is, at times, there are fragmented customer and patient experiences. The third one is we have a reactive sick care system. Our strategy at The Cigna Group is focused on addressing each of these opportunities. Now we have three strong high-performing growth platforms that we continue to invest in.

To the point I was making earlier around portfolio shaping, these three will continue to be fed with financial and human capital going forward. One is our Specialty and Care Services platform, which now represents about 35% of the company's income and is growing 8%-12% per year, as Ann just referenced earlier. Secondly, our Pharmacy Benefit Services platform, also within Evernorth, about 25% of the company's income, is going through the transformation that I was alluding to earlier, and we're confident on the long-term durability of that. Then finally, our Cigna Healthcare business, which represents the other 40% of the company's income, which is our high-performing health plan business, underpinned by our flagship U.S. employer business, which has shown a long track record of growing at above-market rates.

Those are the growth platforms we're gonna be very focused on going forward in terms of scaling and delivering against our long-term commitments to our shareholders as well as to our customers. Now, when I take the CEO role in July, there are a few areas of greater intensification that I'd just like to highlight for shareholders. One will be the way we harness data, advanced analytics, and AI to drive even more personalized, affordable customer experiences. Two, a relentless drive to more affordable types of care. Think generic drugs, biosimilars, more cost-effective locations for medical procedures. Third, shifting further upstream into care journeys through preventive care, diagnostics, and encouraging behaviors that promote health and wellness. Finally, through an investor lens, there are three commitments I'll make to all of you. One, strong organic execution of our strategy.

Two, disciplined capital deployment and continued portfolio shaping, always with a long-term lens. Finally, I believe that our equity has significant appreciation potential from current levels. Through continued strong execution, thoughtful strategic decisions, and providing the right visibility to investors, we see meaningful shareholder value creation opportunity. Hopefully that feels familiar to you. We'll be continuing the momentum we have now and intensifying in a few of those areas you just made a reference to. Thanks for the question, Scott.

Thank you. Our next question comes from Charles Rhyee with TD Cowen. You may ask your question.

Yeah, thanks. First let me echo congrats to the both of you in your going forward here. Maybe if I could follow up on Lisa's question and drill down a little bit more on biosimilars and the strength we saw in specialty. You know, perhaps how much of the results we saw in the quarter were driven by you know, formulary changes really to try to drive biosimilar adoption, which I think can be also positive for Accredo. I am thinking in particular around biosimilar Stelara, which you know, I think you're also manufacturing through Quallent.

Maybe talk a little bit about how the synergies between the different parts of the Evernorth business is helping in this regard, and perhaps how much of that is driving this kind of growth, and is that something we should expect, particularly as we see more biosimilars coming to market over the next few years? Thanks.

Morning, Charles. I'll start on this one. Appreciate you highlighting the strength of our specialty platform, as you made reference to earlier. Really pleased with the strong momentum there. We believe biosimilars and specialty generics are critically important to driving affordability for the healthcare system at large in the future. If you think about the journey we've been on here, we introduced the Humira $0 out-of-pocket a couple of years ago, and the penetration of those biosimilars have continued to grow. It took a further step forward into the first quarter of 2026. Similarly, our Stelara $0 patient out-of-pocket was available first in May of last year. If you're doing a year-over-year, it was not in the first quarter of 2025, it is in the first quarter of 2026.

We've seen nice growth in the penetration of that over the course of of the 10 months or so since we introduced it. This year, we're excited about generic Revlimid, which is a specialty generic that will have supply constraints ease, and that'll add to contributions as the year unfolds. Finally, I would just remind you, we made our investment into Shields in the third quarter of last year. As you think about the way that the timing will unfold on the financial contribution there, as you model the balance of the year. Those are all areas we're really excited about.

In addition to core volumes that continue to grow, we saw particular strength in the quarter in a few areas like severe asthma and hepatology, and fertility that saw outsized percentage growth rates in volumes and specialty. So really excited about that platform in the future. I think David wants to weigh in with a few thoughts here as well.

Thanks. Yeah, thanks, Brian. And Charles, thanks for the question. Just wanna amplify a few pieces that Brian articulated and then drill down for one more moment. One, our model still embraces choice, so affording choice with the diversity of who we serve. Second, what you heard is the incentive alignment. Whether it was Humira or Stelara, designing it with a $0 out-of-pocket for the consumer, for the patient, very strong value delivered to all stakeholders, the employer or financier, as well as the consumer. These I wanna click down on and compliment the team on. The team was able to harness effective use of AI to identify the conversion strategies in a highly personalized way, which had high NPS, low friction, and high continuity for both the patient and the physician. The result of that is the conversion.

The result of that is more value delivered, but higher satisfaction, and then staying power of the conversion to the biosimilar. It's an example where Brian talked about before about harnessing data and AI, those fused together in a highly personalized basis to deliver, the outcome on the biosimilar, but to do it in a very customer, patient-friendly way and a physician coordinated way. Thanks for your question.

Thank you. Our next question comes from George Hill with Deutsche Bank. Your line is open. You may ask your question.

Hey, good morning, guys. Thanks for taking the question. Brian and David, again, congratulations to both of you guys. I was just hoping you might update us on your 340B exposure, given where you guys are with Carepath now and Shields, and kinda how should we think about the exposure to that segment. I don't know if you would be able to quantify what both of those units are contributing to the business right now, from an operating earnings perspective, and just kinda how to think about the exposure to that segment given what's going on in the drug space. Thank you.

Morning, George. It's Brian. Appreciate the comments and the question. As it relates to 340B, you can think of that as a component of the specialty care services platform within Evernorth that we just made reference to. Actually, if you go way back, at the time we acquired Express Scripts, looking at the Accredo asset at that time, realized it did not have very much 340B activity within it relative to others in this space. Over time, we built a suite of capabilities that allow us to partner with hospitals and health systems more effectively to help them manage their 340B related activity. We had a small acquisition several years ago, Verity.

More recently, our acquisition of Carepath and the investment we made in Shields all allow us to serve hospitals and health systems in a way that allows them to optimize their relative performance around 340B. You should think of it as indirectly supporting, again, hospitals and health systems through our service-based offerings as opposed to being a scaled 340B contract pharmacy as it relates to the portfolio. Overall, it's a component of the Specialty and Care Services portfolio, but the lion's share of that business continues to be our core Accredo specialty pharmacy, as well as our CuraScript distribution capability. Encourage you to think about it in that way as opposed to being its own P&L, if you will, within the broader Evernorth portfolio.

Thank you. Our next question comes from Justin Lake with Wolfe Research. You may ask your question.

Thanks. Good morning. I wanted to focus on Evernorth and specifically on the reported non-controlling interest in the quarter of $226 million. NCI has increased dramatically over the last years, and this quarter has more than doubled versus Q1 2025. Just given how significant this item has become, I wanted to dig in here for a minute. My impression is this NCI is driven by your GPO, which is, I believe, both are joint ventures. I wanted to confirm a few things. First, what are the main JVs driving this NCI? On average, what percentage of these JVs are owned by the company versus your partners? And what specifically is driving the 100%+ increase in the quarter? For instance, do the partners get significantly larger piece of the JV, or is this completely driven by a doubling of earnings from the JVs?

Morning, Justin. I'll start. Just to frame it a bit, we support health plan clients in a variety of ways, including procurement, value-based services, and we work across a broad set of relationships with health plans and related entities. Through these partnerships, clients benefit from our ability to drive value, and we're able to deliver flexible, competitive solutions. The NCI line item includes minority earnings from a number of joint ventures and partnerships which you mentioned. There are multiple different structures and ownership levels, so the growth in NCI doesn't directly correlate to the same levels of growth in our earnings.

If you're looking at the year-over-year increase in the NCI line, that was primarily driven by a new joint venture with one of our largest clients, and the additional economics are passed back as part of the previously discussed renewals that we did. JVs can have various structures. For this one, the new one that drove the increase, despite us holding a majority share, most of the economics are passed back and have no impact on our earnings. This was known and fully contemplated in our guidance for the full year. And we are, you know, we are really pleased and happy to continue to be a partner of choice for the largest, most sophisticated purchasers. Hope that.

Cigna Group (CI) Q1 2026 Earnings Call Transcript

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