Icahn warns Cigna investors of dangers in Exp-Scripts deal

By The Associated Press | Posted - Aug. 7, 2018 at 5:24 a.m.

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NEW YORK (AP) — Carl Icahn is urging Cigna shareholders to vote against the health insurer's attempted multi-billion dollar takeover of Express Scripts, saying it's paying too much and that the deal is risky.

In a letter Tuesday, the billionaire and activist investor warned that St. Louis-based Express Scripts, a pharmacy benefits manager, faces intense competition from Amazon, regulatory risks in pursuing the deal, and he said that it could lose the business of other health insurers that won't want to deal with a company owned by a rival.

Icahn said Amazon will have no problem competing, given its 100 million members.

In January, Amazon, Berkshire Hathaway and JPMorgan Chase announced that they were forming a new company to address health care costs for their U.S. employees, and possibly for many more Americans.

Insurers and pharmacy benefits managers — which run drug plans for insurers and employer-based plans — have struggled to keep costs under control.

That has led to a significant consolidation in the health care industry, with major players attempting to merge as a way to drive down costs.

In March, Cigna said that it would spend $52 billion to acquire Express Scripts, based in St. Louis.

Icahn, who has built up a stake in Cigna Corp., suggested that the Bloomfield, Connecticut, company instead consider multi-year partnerships with a pharmacy benefits manager, possibly even Express Scripts, while the sector deals with the challenges it's facing.

He recommended Cigna buy back some of its stock, which would benefit Icahn and other shareholders.

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