Evernorth invests $3.5 billion in Shields Health, HonorHealth acquires Evernorth Care clinics

Cigna subsidiary Evernorth Health Services announced Tuesday that it is investing $3.5 billion in Shields Health Solutions, the specialty pharmacy management company Walgreens Boots Alliance (WBA) previously owned.

Shields partners with more than 80 health systems throughout the country, assisting them in establishing and managing their own specialty pharmacies.

Walgreens acquired Shields in 2022. The company became a stand-alone entity when Sycamore Partners finalized its acquisition of WBA on Aug. 28. (More on that below.)

“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,” said Cigna CEO David Cordani. “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.”

Evernorth already offers various services to support specialty care, including through its specialty pharmacy, Accredo. Investing in Shields will allow the company to “seek more opportunities to support patients and providers and enhance continuity of care across specialty health care settings,” the announcement noted.

Evernorth mentioned an “optionality” to make additional investment in Shields. Because the multibillion-dollar investment is in the form of preferred stock, it does not give Evernorth a controlling stake in the company.

In separate news, Scottsdale, Ariz.-based HonorHealth announced on Tuesday that it has agreed to acquire Evernorth Care Group clinics in the greater Phoenix area for an undisclosed amount.

The clinics provide integrated primary care services to nearly 80,000 patients, HonorHealth noted in a press release. The Evernorth Care Group website shows 18 health centers across the metro region.

HonorHealth serves 5 million people.  

The acquisition is expected to close in January if the necessary regulatory approvals are obtained.

OUR TAKE: The specialty pharmacy business is growing as demand increases for drugs to treat chronic and complex conditions.

Even so, less than 5% of the U.S. population requires treatment with specialty medications, according to PBM CarelonRx. But specialty drugs account for at least half of the nation’s spending on prescription medications.

With their high list prices, specialty drugs can generate thousands of dollars in profit per prescription, so it’s not surprising that Cigna/Evernorth is seizing the opportunity to expand its specialty business by acquiring a stake in Shields.

Through its Express Scripts PBM business and its Accredo specialty pharmacy subsidiary (both part of Evernorth Health Services), Cigna is well aware of the potential revenue specialty drugs can bring in. During the company’s second-quarter earnings call, Cigna’s president, Brian Evanko, said Evernorth’s earnings were ahead of expectations, reflecting “strong momentum within the specialty and care services platform.”

Evanko pointed out during the call that “the specialty space is more than a $400 billion market today and is growing at high single digits annually.” He added that in 2024, approximately 70% of new drugs approved by the FDA were specialty medications.

“Specialty represents one of the highest growth areas in health care and within the Cigna Group,” Evanko said, “and we continue to expect long-term average annual income growth of 8% to 11% across our specialty portfolio.”

It will be interesting to see the updated estimates in future earnings calls.

Evernorth’s investment in Shields is a much safer bet than the $2.5 billion it invested in VillageMD in late 2022 — though at the time there was no way of knowing how that investment would turn out. Cigna wrote off $1.8 billion of the VillageMD investment in the first quarter of 2024.  

Health Care Rounds #188:
"Dr. G” on Health Care Misinformation

Why do people trust Google and TikTok more than their doctors? Dr. Geeta “Dr. G” Nayyar, MD, MBA, the author of Dead Wrong: Diagnosing and Treating Healthcare's Misinformation Illness, joins the show to break down how misinformation spreads, why patient trust continues to decline, and what health leaders must do to lead the cure. Dr. Nayyar is a clinical advisor to Omaha Health and is the former SVP and Chief Medical Officer for Salesforce. Listen wherever you get your podcasts or watch the episode on YouTube.

What else you need to know

Walgreens Boots Alliance is a private company now that Sycamore Partners has finalized its $10 billion acquisition of the pharmacy behemoth. An Aug. 28 press release noted that Sycamore acquired the company “in partnership with Stefano Pessina and his family, who have reinvested 100% of their interests in WBA.” Along with $11.45 in cash per share, WBA shareholders will receive one nontransferable right to receive up to an additional $3.00 in cash per share from the net proceeds of “the future monetization” of WBA’s debt and equity interests in VillageMD, which comprises Village Medical, Summit Health, and CityMD. That additional payout could increase the overall value of the deal to as much as $23.7 billion, Fierce Healthcare reported.

Moving forward, Walgreens and its subsidiary businesses — The Boots Group (the international pharmacy chain), Shields Health Solutions (the specialty pharmacy unit), CareCentrix (the home care services provider), and VillageMD — will each operate as a stand-alone company. Mike Moltz, who previously served at the helm of Staples, another company Sycamore Partners acquired, has replaced Tim Wentworth as CEO of Walgreens. Prior to his role at Staples, Moltz was president of Shoppers Drug Mart, Canada’s largest pharmacy chain. Wentworth will stay on at Walgreens as an ongoing director.  

ACOs in the Medicare Shared Savings Program generated $2.4 billion in savings for Medicare in 2024 relative to benchmarks, the highest amount since the program began in 2012, according to a CMS fact sheet. By comparison, the MSSP’s net savings in 2023 were $2.1 billion. Of the 476 ACOs participating in the program last year, 75% earned a total of $4.1 billion in performance payments — the highest share of ACOs to earn payments since the inception of the MSSP, according to CMS. Of the remaining ACOs, 16 owed a total of $20.3 million in shared losses. The MSSP’s net per capita savings (for Medicare) were $241 in 2024, up from $207 in 2023. Year-over-year gross per capita savings (shared by Medicare and the ACOs) increased from $515 to $643.

Eversana and Walz Health have merged to create a company that will directly connect pharmaceutical manufacturers to patients and payers, with the intent of delivering “significant” cost savings and improving patient outcomes. Eversana provides life sciences commercialization services; Walz Health provides technology-enabled payer solutions to health plans and employers. Both are based in Chicago. The announcement stated that the merger “will be especially impactful for lowering the cost of specialty medications and high-cost drug classes like GLP-1s.” Mark Thierer, Walz Health’s co-founder and CEO, who has also served as chairman of Eversana, will be CEO of the newly merged company. Thierer previously served as CEO of UnitedHealth Group’s Optum Rx PBM unit. Jim Lang, Eversana’s CEO before the merger, will continue to serve as a board member. The combined company is valued at $6 billion, Bloomberg reported.

Sioux Falls, S.D.-based Sanford Health plans to acquire Lewis Drug, a retail pharmacy chain with 60 locations spanning South Dakota, Iowa, and Minnesota. Lewis Drug will continue to operate under its current brand after the transaction is finalized, which is anticipated to take place this fall. The chain’s team of 188 pharmacists and 1,300 team members will become Sanford Health employees, and Lewis Drug’s CEO, Mark Griffin, will stay on in an advisory capacity during a multi-year transition period. Sanford Health’s business affiliations with Lewis Drug began more than 25 years ago, according to the announcement.  

Southfield, Mich.-based Corewell Health and Quest Diagnostics have agreed to enter into a joint venture to expand access to lab services. The joint venture, called Diagnostic Lab of Michigan, will be based in a new 100,000-square-foot, state-of-the-art lab facility to be built at the Corewell Health Southfield Center, near Detroit. Equity ownership in the joint venture will be split, with Quest holding 51% and Corewell the remaining 49%, according to an Aug. 26 news release. The organizations expect to complete the joint venture transaction in the first quarter of 2026 and anticipate that the new facility will be operational in early 2027. In addition, Quest will provide a range of lab services for Corewell’s 21 inpatient and outpatient hospital labs under a lab services agreement, including reference lab testing, professional lab management, lab workforce and supply chain management, and analytics.  

What we’re reading

Feeling the Impact of the Physician Shortage: Medscape Report 2025. Medscape, 8.22.25

When Should Federal Health Professionals Disobey Orders? Health Affairs, 9.4.25

Good Grief. JAMA, 9.4.25 (registration or subscription required)

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