Timothy C. Wentworth, Express Scripts Holding Company and Cigna Services President, joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss how health insurance companies are faring amid the coronavirus outbreak.
Video Transcript
BRIAN SOZZI: I want to get right to Tim Wentworth. He is the leader of Cigna Services-- the President of Cigna Services. Tim, thanks for taking a few minutes today.
TIMOTHY WENTWORTH: Thanks for having me on.
BRIAN SOZZI: I know you-- I remember you as the leader of Express Scripts, the former CEO of Express Scripts, which has now been rolled into Cigna as part of that big $67 billion deal. I'm very curious on how the Express Scripts supply chain is holding up under this national pandemic.
TIMOTHY WENTWORTH: Well, I really appreciate the question, because it gives me a chance to do two things-- one, assure you, and frankly, every patient in America, that we are doing everything we can do to maintain a very consistent supply chain. And as I sit here today and talk to you, we are in terrific shape. You know, with decades of experience, we've managed through all sorts of things over the years. And we were ready for this. We continue to see very strong supply chain end-to-end behavior.
And so for the patients out there, we're in good shape. You should be taking your meds. You've been refilling responsibly, which is good. This is the time to take them and to stay healthy. The supply chain will be there.
ALEXIS CHRISTOFOROUS: Great advice, and encouraging to hear that as well, Tim. But I also know that Cigna, along with a lot of other health insurers, is waiving co-pays for COVID-19 treatments and doctor's visits, which is a wonderful thing. But the cost to health insurers for covering those tests and that treatment could be enormous. I mean, we're seeing some estimates saying that the industry could wind up spending $250 billion to cover care for coronavirus patients.
If that does indeed become the issue-- the scenario, do you see premiums going up, you know, in 2021, simply because the health insurance companies have no other thing to do, but then to pass that cost onto us the consumer?
TIMOTHY WENTWORTH: Well, I appreciate that question. And let me start with saying, giving patients clarity about the fact that they should go and get tested, go and be treated if they have this disease, or be looked at, is the most important thing we can do right now, for not only our country, but quite frankly, for our company. In terms of what the longer-term effect is, we are a well, well capitalized company, as you know.
We've got a great balance sheet. We've got a terrific sort of diversified portfolio of businesses. We thought about all of this when we put this out there. This is not about shifting costs to another year. This is about taking care of patients, and ultimately doing the right thing.
And we know long-term, that's always been good for our business. And we've always been about keeping costs low. Affordability is our number one initiative. That hasn't changed.
You saw we've announced a couple of things as recently as today that drive access. But really good affordability, we believe those are the kinds [INAUDIBLE] position us really well, and help patients get what they need when they need it.
BRIAN SOZZI: Time, take us inside a little bit in terms of branded drug and generic drug price inflation. Do you think this is the time, this is the moment where a lot of the brand drug and generic drug makers look to reclaim their supply chain from getting a lot of these ingredients from China?
TIMOTHY WENTWORTH: So it's really early to predict inflation. Except what I'd say is this, and you broke it into the two right buckets-- we look at generics, and 90% of prescriptions today are generic. They're a very competitive industry, very efficient industry, you know, a more diversified supply chain than some people probably appreciate. And I suspect they'll be diversifying that more in terms of some of the upstream things. But we expect that generic pricing-- you know, at this point, you look out, you know, I don't see major disruptions in that.
As it relates to brand, most of the brand drug companies already supply themselves from different places. They were not heavily, heavily dependent on China. And so I think, again, you're seeing responsible behavior on the part of manufacturers to manage prices this year, as they did last year, very efficiently, and in a way that allows patients to continue to have access at affordable rates for the people who pay the bills. I don't see that materially changing in the time frame that we're looking out at.
ALEXIS CHRISTOFOROUS: Tim, talk to us a little bit about the timeline here. It's my understanding that Cigna is going to cover COVID-19 related tests and treatments through May 31. Some other companies have not put an end date on this.
If the pandemic were to continue in its intensity beyond May 31, would Cigna extend what it's doing right now?
TIMOTHY WENTWORTH: There's no question that we put that data out there as a starting point for a long-term commitment to our patients, as we've always had. And as this pandemic unfolds, we will be there for our patients. And that well may include continuing to waive these things longer into the year than we've identified so far.
Obviously, our hearts and our hopes are that patients and our country by the end of May can look forward and say, we've really across the top of this curve, and meaningfully come down it. But if we haven't, we're going to take a look and be there for our patients.
BRIAN SOZZI: Tim, the next piece of this puzzle, I think, is some form of vaccine and medicine to address coronavirus. Over at Express Scripts, are you ramping up hiring for your facilities in preparation for this?
TIMOTHY WENTWORTH: So typically we don't handle the vaccines themselves. Those go through different channels. But what we are doing is ensuring that the patient plan designs that we have, many of which look at vaccines in the pharmacy benefit, create complete access. There is no question that as we did at Cigna first with testing, creating absolutely no barrier to a patient getting a test, or when they're available, getting a vaccine, is going to be critical.
And I've got to call out, I loved hearing what Johnson & Johnson is doing, which is essentially going at risk to manufacture what they believe will be a successful vaccine, even before it's been fully proven. Well, our job is to make sure that the system's ready, that [INAUDIBLE] for those patients to be able to go get those vaccines without stopping and worrying about the cost.
ALEXIS CHRISTOFOROUS: Tim, you touched on this a little earlier about-- about the health of Cigna's balance sheet. But do you foresee perhaps needing to ask the government for some assistance here? Do you believe that perhaps you might have to dip into your financial reserves to cover coronavirus costs?
TIMOTHY WENTWORTH: We don't foresee that we are going to have to ask the government for help. We know we have clients who are working with the government to be helped. But as it relates to us, we are strong. We made these decisions in the context of that strength and that diversification that we have. And we feel very confident, as I sit here today, that we will weather this storm well and come out of it very, very strong.
BRIAN SOZZI: Tim, before I let you go here, what has this situation been like for you? You're a veteran of this industry. How have you had to change, I guess, or rethink some of your leadership styles?
TIMOTHY WENTWORTH: Well, as you can see, I'm working at home here. And years ago I ran an international business. And it's all about a couple of things.
Our employee engagement is what's critical. And I just have to say, we have been so proud of our 74,000 employees. We moved 7,000 of them to home in two weeks.
And, you know, we've actually seen an increase in productivity. We've seen an increase in engagement. One of my leaders said, we're talking with each other differently, but more than ever. And I believe that our engagement scores at the end of this for our employees will be higher.
And you know what? Those 74,000 people are the people that are taking care of our 100 million patients that we're privileged to serve here in the United States. And from my standpoint, it's been just focusing on our employees through the focus on our patients, and making them feel how important the mission is. I think that's what every leader is trying to do in this country today. We feel really good about that.
BRIAN SOZZI: All right, let's leave it there. Timothy Wentworth, Cigna Services President. Stay safe out there, and thanks for taking a few minutes.
