(Reuters) - U.S. health insurer Cigna Corp (CI.N) struck a $52-billion deal to buy pharmacy benefits manager (PBM) Express Scripts Holding Co (ESRX.O) on Thursday, looking for new ways to hold onto their profits as the industry faces greater scrutiny for rising healthcare costs.

The pharmacy benefits business, which tries to negotiate down the price of prescription medicines for large employers, has drawn fire from the Trump administration and Congress, who have questioned whether those discounts are really being passed on to consumers.

Cigna’s deal follows close on the heels of a rival $69-billion merger between CVS Health Corp (CVS.N) and health insurer Aetna Inc (AET.N), announced in December. Together, the transactions would represent a massive consolidation of the market for managing employees’ prescription drug benefits, prompting some experts to question whether they will be approved.

“Employers are growing increasingly frustrated with the cost of prescription drugs and a lack of transparency into the economics of how this works,” said Jim Winkler, senior vice president for health at benefits manager and broker Aon, part of Aon Plc (AON.N).

Cigna and Express Scripts say the combination will lower costs for corporate clients by giving them more coordination between medical care and pharmacy benefits, particularly for pricey specialty drugs.

“Our employer clients will be delighted with that,” Cigna Chief Executive David Cordani said in an interview.

It could help Cigna more closely manage how costly drugs are prescribed and delivered to patients, and fend off potential competition from new players such as Amazon.com.

All told, the companies project $600 million in annual savings.

Express Scripts shares were up 8 percent at $79.29 on Thursday afternoon, but they were trading 12.6 percent below the current value of the bid, suggesting that some investors see difficulties closing the deal.

Cigna shares fell 11.5 percent to $171.86.


PBMs administer prescription drug programs for health insurers, self-insured companies and government agencies, negotiating deals with drug manufacturers, working with pharmacies and processing claims.

The largest U.S. health insurer, UnitedHealth Group (UNH.N), in 2015 expanded its in-house pharmacy benefits business, OptumRx, with the $13-billion purchase of Catamaran. CVS, Express Scripts and UnitedHealth control more than two-thirds of the PBM market, a top U.S. health official said on Wednesday.

Anthem Inc (ANTM.N) in October said it would expand its own pharmacy benefits business, and hired CVS to do so.

Various medicine pills in their original packaging are seen in Ljubljana February 14, 2012. REUTERS/Srdjan Zivulovic

Antitrust experts said the Trump administration would need to review how both deals between Cigna and Express and between CVS and Aetna would affect the U.S. market, already the world’s most expensive healthcare system.

“Having two simultaneous deals significantly raises the risk,” said David Balto, an antitrust lawyer with expertise in the health industry. “There’s a significant risk that both deals get

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