The Cigna Group

Good morning, it's David. Let me take the first part of your question, and I'll ask Brian to take the second part of your question. As you called out, the specialty performance within Evernorth continues to be quite strong. We're really pleased with the performance of our overall portfolio, and specifically specialty, as you note. I'd remind you that our specialty portfolio serves multiple segments, specifically a credo. Think about that as serving individual direct patient needs. on a highly focused basis, including in-home care coordination where appropriate. And then CuraScripts supporting medical professionals by delivering the right drug at the right time for purposes of their services and their needs. I'd also note that as you would expect, our team is quite excited about and well positioned for the accelerating biosimilar trend that we see in front of us for the coming years. and where success in the biosimilar space will require not only strong performing specialty capabilities in terms of the breadth of the specialty capabilities, but high coordination on the medical side of the equation because those decisions, as you know, are typically made one patient at a time in terms of coordinating the transition of care where appropriate unless there's a perfect match from that standpoint. So strengthen both the consumer part of our specialty portfolio as well as the healthcare professional part of our specialty portfolio and well-positioned for evolving biosimilar acceleration as we go forward leveraging our specialty capabilities as well as our medical capabilities. I would not call out any unique drug class changes as a driver of growth, but let me transition to Brian to expand on that in the second part of your question. Morning, Nathan.

So in terms of the expense growth in the quarter for Ever North vis-a-vis the revenue growth and how we're thinking about the full year there, As you noted, the SG&A was up 13% quarter-over-quarter in Evernorth, while the revenue was up 10%. You can think of the expense growth as predominantly fueling future growth within Evernorth. So I mentioned earlier we're making strategic investments to build out our Evernorth care platforms. When you think about care management, care coordination, care delivery, alternate sites of care, we've talked to you about virtual care in the past, behavioral health, in-home care. We're making a series of investments there That won't just be limited to the first quarter. There'll be multi-year investments to continue to diversify our health services portfolio within Evernorth. But for the full year, importantly, our income for Evernorth will be up 5% from where it was in 2021, and our revenue will be up in that same general zone. So you should not think of margin erosion transpiring for the full year, even though expenses grew a bit faster than revenue within the first quarter.

Thank you, Mr. Rich. Our next question comes from Mr. Josh Raskin with Nefron Research. You may ask your question.

Thanks. Good morning. I was interested in that recent announcement you mentioned around the cancer consult service launch. And can you speak to who the targets are for that product? Is that an internal sales process to your existing health plans? And I guess more importantly, are there other physician enablement services that you think you can add in the future through Evernorth?

Josh, good morning. It's David. First, relative to the space, and really appreciate you re-amplifying the oncology opportunity. As we know, the volume of oncology needs in the United States, other markets as well, but in the United States continues to grow. And we're really pleased with the innovation that is taking place. So we're taking an analytical approach to identify individual patients. So the target market are individual patients that we serve today. So think about that through either Cigna Healthcare and our diverse Cigna Healthcare relationships, and increasingly going forward, a service that will be able to be offered to our Evernorth Health Plan clients as an example, as a consult, to bring that level of precision, identify individual patients who, in coordination with their specific oncologist, so analytical matching of the patient, their oncologist, where we determine that by matching them to a center of excellence, and bringing the consult precisely back to the patient with their oncologist, we could advance quality, affordability, and the overall care equation without, in many cases, needing to have the patient transport themselves to the center of excellence. So it's an example of bringing the precision to by using the data and the care coordination and our partnerships. So the target audience is individual patients, largely through our Cigna healthcare portfolio, through the rollout that's taking place right now, but increasingly as an Evernorth service, be able to be offered to our health plan clients and others. And then secondly, if I heard the latter part of your question correctly, think about these types of approaches as indicative, and we talk about what Brian made reference to in terms of Evernorth care, opportunities to, again, curate and coordinate more of the care equation using data and then the breadth of care to bring more services forward. And we'll seek to provide some additional insights relative to at our investor base, some additional programs that will be rolling out in this year, not oncological-based, but taking a similar harnessing of data and real-time service delivery. Really appreciate your question. Thanks.

Thank you, Mr. Raskin. Our next question comes from Mr. Scott Fidel with Stevens. Your line is open. You may ask your question.

Hi, thanks. Good morning. I'm sure this is another topic that you're going to be delving into more on Investor Day. But we're just interested from, you know, this point in time, as we look out to 2023, if you could just give us, you know, some updates on how you've been looking to refresh the strategy for MA to resume growth, you know, in the market for 2023, especially now that we've got the, you know, the final rates out, which looks pretty solid for the industry.

Scott, good morning. You're right, we will cover that in June, but let me just profile the broader direction. First and foremost, we continue to see our government segment and specifically within that Medicare Advantage as a very attractive, sustained growth opportunity. In 2022, we're in year three of our expansion and growth initiative. And while clearly 2022 was well short of our specific growth algorithm for a variety of reasons, including market conditions, Our three-year average growth was just a bit below our low end of our strategic range. Now, specific to 23, we are building our plans and initiatives specifically to drive attractive growth in 2023. We'll profile a little further. We'll leverage our strong stars positioning, our NPS positioning, and our overall medical cost in our targeted MSAs. And I would remind you that we're largely an individual HMO and individual PPO-oriented organization. we will demonstrate at Investor Day, but our plans are building on harnessing now some of the investment we've made in terms of our market expansions over the last couple of years, whereby the early yield traction and market expansion is low in year one, but by the time you get out to year three, we have higher expectations, targeted investments in marketing and distribution. And then importantly, we expect in 2023 to begin to realize more yield off of our commercial aging population and PDP and MedSupp conversion opportunities that sit in front of us. So specifically, our expectations will be, and we're building our plans around an attractive growth year for 2023. Thank you, Mr. Fidel.

Our next question comes from Mr. Stephen Valcott with Barclays. Your line is open. You may ask your question. One moment, please.

Great, thanks. Good morning, everybody. Regarding the medical cost trends, is there any further color on the pace of traditional non-COVID utilization trends versus baselines exiting the first quarter and into the second quarter? Also, I'm curious, was there any thought to narrowing the top end of the MLR guidance range or 22, just given the better-than-expected 1Q MLR result? Thanks.

Morning, Steve. It's Brian. So I'll try to tackle both of those questions here. In terms of the medical cost performance in the first quarter, as I noted earlier, we saw some favorability come through in the form of COVID costs in particular compared to our expectations in the first quarter. So both testing and treatment came in a bit favorable to what we had been forecasting for the first quarter of the year. And that was true across the commercial book of business in the most pronounced fashion, but in totality for Cigna Healthcare. As it relates to non-COVID, The non-COVID costs came in essentially right where we were expecting them to, meaning if you look at it on a cost trend basis, the cost trends compared to the first quarter of 21 were very much in line with our expectations in terms of seeing a normal kind of low to mid-single digit type cost trend on the non-COVID services. We're not really seeing any signs of acuity spikes or pent-up demand emerge. Things like blood screenings, preventive exams, mammograms, colonoscopies are all in line with where they were. in 2019 on a per capita basis, and for that matter, where they were in 2021 as well. So non-COVID shaping up very much in line with what we had been expecting coming into the year. As it relates to the full year outlook for the medical care ratio, you're right, we reaffirmed the 82% to the 83.5% range, despite the first quarter coming in a bit favorable. We felt like just being one quarter into the year, this was a prudent thing for us to do and a prudent posture to take given there's three more quarters and respecting that COVID's had a lot of twists and turns over the past couple of years. But it would be reasonable to assume the midpoint of our range may be shading slightly toward the lower half of the range if you were thinking about where the full year is likely to shake out based on what we've seen so far. Got it. Okay.

Thanks.

Thank you, Mr. Valliquette. Our next question comes from Mr. A.J. Rice with Credit Suisse. You may ask your question.

Hi, everybody. Maybe I'll just ask about the biosimilar opportunity. I know that is out there, but it's a little bit difficult to quantify what it might look like. I guess, can you give us any update on ongoing discussions you're having with the various players and whether that's provided any clarity? And in your mind, when do you think you will get a sense of what the opportunity might be both for Ever North and I guess to some degree even with the benefits business.

Good morning, AJ. It's David. In some ways, it's early. In other ways, you know, the trend is upon us, right? We're seeing the convergence, which is a net positive. We think it's a net positive from a societal standpoint relative to the opportunity to further improve affordability. And given our Evernorth model, we have the services within Evernorth and some leverage relative to Cigna Healthcare to really harness this opportunity on a go-forward basis. We don't think there's a single inflection point that exists. Maybe that's inferred in your comment. So it's not as though 23 or 25 is the single year. We see a ramping of activity, and our teams, as you would expect, are working class by class, drug by drug, with manufacturers as well as with the programs that we will have in place and the choices we will be able to offer our clients. I think very importantly, the consultative nature of the way Evernorte supports our clients will be even more pronounced and more beneficial with the biosimilar trend as it evolves. As you would expect, given the energy we have relative to our specialty portfolio and its respective traction, this will be an area we'll seek to amplify a bit more specifically at our investor day. But suffice to say, there's not a singular inflection point. 23 is an important year with some convergence, but 24, 25 begin to ramp and beyond. So we're well positioned relative to that to improve affordability for our clients and customers and have Evernorth benefit from the value it's creating for our clients, customers, and patients.

Okay. Thanks a lot.

Thank you, Mr. Rice. Our next question comes from Mr. Gary Taylor with Cowan. Your line is open. You may ask your question.

Hey, good morning. I wanted to ask a little bit more about PBM when we look at the adjusted claims down 2% year over year. A couple questions. I don't think vaccines were yet material to the prior year, so I just wanted to see if that was mostly just the health plan losses impacting that. It wasn't related to vaccines. And then A few months ago, when you were asked about PBM selling season, obviously it was very early. It's still early, but you had said you expected at least similar, if not better, retention than 22, which I think was mid-90s, and just wanted to see if there was any update to that thinking.

Good morning, Gary. It's David. Let me start and then ask Brian to talk a little bit more relative to the Evernorth growth framework and why Scripps are, I think, an important example, but given the breadth of Evernorth, no longer the sole example that you should be looking at. Specific to your framing relative to the current year, broadly speaking, I think your walk-in framing is right. We had a little lower retention rate than our historic average and clearly lower than our phenomenal 2019 and 2020 retention level from that standpoint. Your question, I think, goes to 2023, and as I noted, we're positioned to have another strong growth year for 2023 for Evernorth, both on a new business and on a renewal basis. Now, specific to PBM, before I transition over to Brian to talk a little bit more relative to the Evernorth growth, we're at about a 90% visibility, so about 90% of the books already renewed, which is good at this point in time of the year, and we feel quite strong relative to that. And as we sit here right now, specific to the PBM portion of Evernorth, which is what you're asking about, we expect our retention to be higher than 2022's retention level and revert back to more of the historic norm of 95 or a bit better from that standpoint. But importantly, 90% of the book is renewed and we still have some active selling that sits in front of us right now because the marketplace continues to be pretty fluid in the current environment. Brian?

Morning, Gary. Back on the first part of your question in terms of the first quarter 22 script volumes and such, I think your macro conclusion is right in terms of the scripts being down 2% is largely a function of the client wins and losses and the net effect of that. The vaccines were pretty flat year over year if you look at the first quarter 22 versus first quarter 21 within a million or so scripts, so that's really not a material driver quarter over quarter. Importantly, though, as David hinted at here, as each day passes, the total script count metric becomes less and less important to measuring Evernorte's overall performance. And what do I mean by that? As we have more and more volume coming through our specialty pharmacy, as we have more and more volume coming through our care platform, you're going to see more earnings and more revenue associated with things that are not directly linked to scripts. So as an example, within specialty, specialty just crossed over the 35% mark in terms of contribution to overall Evernorte revenue. but it represents less than 1% of our overall prescription volume. So, over 35% of the revenue, less than 1% of the prescriptions. So, again, just that metric I would encourage you to gradually move away from when you're looking at the health of the Evernorth business in totality.

Yep. I mean, the revenue performance supports it. So, I got it. Thank you.

Thank you, Mr. Taylor. Our next question comes from Ms. Lisa Gill with JPMorgan. You may ask your question.

Thanks very much, and good morning. David, I just really want to follow up on Evernorth care capabilities and how you think about MDLive fitting into that. There's been some pressure in the market when we think about behavioral health. And I've heard you talk so many times about whole person health and really thinking about the integration of the two. But how do we think about how Ginger fits into that and how we think about, again, Evernorth care capabilities overall when we think about your offerings going into 2023?

Good morning, Lisa. Good to chat with you this morning. So there's a couple different, I think, flavors to your question. Let me try to be as succinct as I can with them. First, the whole person health or the coordination of care and services remains mission critical, and as we've learned as a society, has been amplified in this COVID environment. So first, by way of background, we continue to expand access to behavioral services, whether it's expanding a network in a traditional sense, whether it's expanding behavioral services through virtual care, whether it's being the first to have virtual care capabilities be covered as in-network services through the likes of Ginger. But then the next step is, how do you coordinate point solutions like that and bring them together? And so let's walk that across to MDLive. MDLive is a great example, and we couldn't be more pleased by having that asset as part of the company to be able to innovate off of, because MDLive underscores as a symbol our view and commitment that harnessing technology and data to bring more services on a real-time, highly personalized basis to a patient or individual presents one of the biggest opportunities in front of our society for the coming years. And specifically, as you take virtual care and you coordinate medical, behavioral, pharmacy services, et cetera, and coordinate those services patients benefit at a significant level. As we click it down another notch, we've seen some disruption in the marketplace, but I would remind you that our model is not a B2C model, dependent upon B2C activation only, building off of a triage event. Ours is more B2B, and then cultivating the relationship with the customer, whether it's through an employer, a health plan, or a healthcare professional organization. And to end with a fact, to underscore, RMD Live Volume's year-over-year Q1 2021 versus Q1 2022 are up about 29%. So an area where we have significant conviction being able to, again, coordinate point solutions as opposed to just push point solutions and having it be highly patient-centric in real time represents a tremendous opportunity, and we're pleased with our progress thus far.

You know, and I'm sure you're going to answer this at the analyst day, David, but really, the second part of my question was, how do we think about this opportunity in 2023? Do you feel that this is driving a bigger market opportunity for you? I know you talked earlier about the cross-sell of Evernorth with Cigna Health, but, you know, any kind of number of a market opportunity you can put around this?

Yes. So, Lisa, I'm sorry I didn't touch upon that. And you're right, we will touch upon that at Investor Day. So, I'm going to... I'll just try to whet your appetite by saying absolutely we see tremendous opportunity. So when you think about it, the leverage between Evernorth and Cigna Healthcare's portfolio, we already have significant proof points and traction relative to that. And there's more opportunity that Eric and our colleagues will walk through when we're at Investor Day. But importantly, those services are not limited to Cigna Healthcare. Everything we're building within Evernorth is built with an eye toward yes, Cigna Healthcare is a client to improve quality and affordability, and we'll walk through proof points relative to that, but simultaneously to be able to bring it to market to standalone employer relationships that Evernote serves, our health plan clients, integrated delivery systems, et cetera, on a go-forward basis. So we see that addressable market, underscoring your point, to be quite broad, quite large in terms of what we're building, and the ability to improve affordability, personalization, and clinical quality, whether it's for Cigna Healthcare or other relationships present a tremendous opportunity, and we will amplify that in Investor Day.

Great. Thank you so much. Thank you, Ms. Gill. Our next question comes from Austin Gerlach with Wolf Research. You may ask your question.

Thanks. This is Justin Lake. Did I get in this time?

Justin, you're live, but you have a different name, so you have an alias this morning. It's good to hear your voice.

Well, since I can't figure out the mute function, I probably should change my name. So, look, I want to squeeze in two quick questions here, just numbers-based. One, can you give us a little color on how the rise in interest rates that we're seeing out there could affect you over the next year or two from an earnings perspective? And secondly, any help on earnings seasonality in terms of first half, second half, would be appreciated.

Thanks. Brian, in terms of interest rates, the macro conclusion you should draw as you think about Cigna is directionally positive when interest rates move up, but also not terribly material in the grand scheme of things in terms of the direct quantifiable impact. The majority of our balance sheet, whether you look at the asset side or the liability side, is in fixed rate, longer term instruments. And those that are shorter-term in nature or carry a variable rate, we tend to have, on a net basis, slightly more exposure on the asset side than the liability side, which creates some favorability in terms of the investment income spread and such. But in terms of dimensioning it, you shouldn't think of this as terribly material. It's in the, call it, $20 million to $30 million range annually, if you were to look at 100 basis point move in rates, order of magnitude. As it relates to the earnings seasonality, and I'll talk in EPS terms, given the strength of the first quarter, you should think of the overall first half of the year as generating about half or roughly half of the full year earnings per share emergence. And then in the back half of the year, we tend to see the fourth quarter as a lower point relative to the third quarter, just given the seasonality in the Cigna Healthcare book of business where deductibles and out-of-pocket maximums tend to be met more frequently. So you should think of third quarter being a little bit stronger than the fourth quarter.

Thanks for that.

Thank you, Mr. Legg. Our next question comes from Kevin Caliendo with UBS. You may ask your question.

Hi, I just wanted to get a little bit more information on the Kaiser partnership, how that came about, what does it mean, how meaningful can it be, where can it go in the future?

Good morning, Kevin. It's David. Before we get into the Kaiser opportunity, which I will remind you that we talk about a strategic imperative in the company that we refer to. Our objective is we seek to be the undisputed partner of choice. Why do we say that? Because we're guided by a tenet that suggests that if we could identify alignment with potential partners, which I'll come back to Kaiser, we could have the opportunity together to create more value. more reach, more service, more affordability, more clinical quality. So specific to Kaiser, that fits into the category, and we could not be more excited and pleased with the opportunity to partner up with Kaiser Permanente. It represents a multi-year strategic relationship where we together can improve access, improve value and affordability, and as I noted in my prepared remarks, it builds on a successful track record with organizations like Prime Therapeutics, or look at a totally different organization with the Department of Defense, where we successfully renewed both Prime Therapeutics and the Department of Defense and expanded both relationships, or recently UPMC, et cetera. So it's an orientation relative to collaborating in a different way and leveraging not only Evernote's capabilities, but in many cases, the Cigna Healthcare capabilities. So as it relates to the core of your question, in 2022, I would not view it as a major top line or bottom line driver given the size and breadth of our corporation. But as we've proven with other relationships, we see it as an opportunity that will have significant and attractive growth over the coming years as we collaborate together and co-innovate together for both top line and bottom line, which will be reinforcing of growing and deepening a relationship. So I'd ask you to put it in the category of a an orientation and a long track record of successful partnerships, and we could not be more pleased to partner up with Kaiser Permanente and build some shared capabilities and innovation to serve clients and customers with better affordability and reach in clinical quality.

Great. Thanks so much.

Thank you, Mr. Caliendo. Our next question comes from Kevin Fishbeck with Bank of America. You may ask your question.

Okay, great. Thanks. I just wanted to go into the guidance a little bit. The Q1 beat was a bit stronger than what the guidance increases. I was wondering if you could help us think about how much of the outperformance was just timing versus you using the outperformance to invest in some of the growth initiatives versus any new kind of offsets in the back half of the year that you might be thinking of. Thanks.

Morning, Kevin. It's Brian. Obviously, we're really pleased having such a strong start to the year. One thing I would note is I saw some of the early headlines here in the morning. Our own expectations were a bit higher than consensus for the first quarter, so we had a slightly different quarterly pattern as you think about the magnitude of the first quarter beat. Now, we were ahead of our own expectations, as I mentioned earlier, as well, but just not to the same tune as where I think the street had come in for the first quarter expectations. But as you think about the balance of the year, there's really nothing specific I would call out in terms of things that will reverse later or looming issues that might emerge in the second half of the year, as you alluded to. We just feel this is a prudent posture to take, being just one quarter into the year to raise by $0.20. And keep in mind that's an at least $22.60 EPS expectation for the year. As always, we'll also evaluate additional strategic investments as the year unfolds. and digital capabilities and other technology that we're looking to bring to market. But again, there's nothing in particular I'd flag as you think about the balance of the year.

Is the 20 cents guidance raised more in line with the beat in the quarter versus your own expectations or is there still some conservatism or investment spend delta?

As I said earlier, we think this is just a prudent move at this point in the year. We were pleased in particular with Cigna Healthcare being above our expectations.

Thanks.

Thank you, Mr. Fischbach. Our next question goes to Mr. George Hill with Deutsche Bank. You may ask your question.

Yeah. Good morning, guys, and thanks for taking the question. I'm going to ask a couple more about Evernorth. Brian, you talked about specialty being 35% of REVs, less than 1% of RXs. Any chance you'd give us the adjusted OP contribution? And then, David, I would ask you, as it relates to PBM, while we're not seeing a lot of movement at the national level, we're tracking a bunch of state regulatory initiatives, which could seem to have a negative impact on the PBM business profitability there. I guess we just love how you're thinking about that, and if you're seeing anything that's kind of raising a caution flag internally that we should be thinking about,

Morning, George. It's Brian. I'll start on the first point, and then David will pick up on the second. As you think about our specialty pharmacy business, again, we continue to be really pleased with the performance over a multi-year period here. We've had really attractive top and bottom line growth, and with biosimilars coming, it'll provide some further fuel as we look forward. Directionally, though, you should think of the margin profile on the specialty pharmacy as being not tremendously different than the overall segment, just if you were to sum up the tapes. But importantly, there's some scrambled eggs, if you will, when you think about many of our client relationships are not specific to just specialty or just PBM or just mail order. So we tend to look at overall client profitability and not just necessarily one silo within Evernorth. But you shouldn't think of it as being terribly different than the overall segment margin profile. David, you want to pick up on the second piece of George's question?

Sure, George. No doubt the environment has remained active. As you noted, from a state as well as federal standpoint, we do not see any one item. I think underlying your question, do we see any one item or one theme as a derailer relative to our business strategy or capabilities? No. And more macro, we are aligned around initiatives that seek to further improve affordability, all aspects of what we do day in, day out within our pharmacy services portfolio. are to drive the right level of differentiated affordability, of course, with clinical and service quality always matched up against that. And we're quite proud of what we've been able to do. And I would note, just as an example, it seems like yesterday, but it's actually three years ago, we launched our patient assurance program for insulin customers. And today we have 10 million customers in the patient assurance program just three years later. And the patient assurance program was uniquely designed at that time and still differentiated in the marketplace that caps a 30-day outlay for an individual customer at $25. So more broadly to your question, it is active. We do not see any one item as a derailer relative to our strategy. Rather, the breadth of our services, capabilities, funding mechanisms, and our approach relative to integrating services we see as creating more opportunity than not as we seek to innovate and redefine the way we're able to bring those services to market.

That's helpful. Thank you.

Thank you, Mr. Hill. Our next question comes from Ms. Ricky Goldwasser with Morgan Stanley. You may ask your question.

Yeah, hi, good morning. So there are two quick ones here. First of all, David, as we think about sort of your care delivery strategy of primary care, any given where sort of market value are now, any appetite to complement your current assets with M&A or do you think that you have what you need in terms of assets and from now on you're going to be able to organically And then just on the biosimilar and specifically Yomera, it's dispensed by a specialty pharmacy. When we think about the biosimilar introduction and the bioequivalent in 2023, is this embedded into your long-term target adjusted earning growth of 4% to 6% for EverNorth, or does it represent some upside optionality depending how the market plays out?

Ricky, good morning. It's David. I'll take your first question, and I'll ask Brian to take your second question. Specifically, your first question comes back toward care delivery, and I think underscoring that is primary care delivery in the marketplace. Our orientation today relative to care delivery more broadly is we seek to own and differentiate in target areas within care delivery. Those areas include virtual care, specialty pharmacy care and services, aspects of behavioral health care and services, aspects of home health care services. We see these as sustainable, differentiated services that can be leveraged and coordinated and in many cases function on a nationalized basis or more seamless basis across multiple geographies. As it relates to physical primary care outside of say virtual care, which would have primary in it, but physical primary care Our stated strategy remains we seek to partner with and enable healthcare professionals with aligned incentive models in our care coordination services, and that strategy has continued to perform very well for us, both in a capitalized service orientation, but in the shared collaboration as underscored by our sustained, differentiated medical cost trend and clinical quality in MPS we've been able to deliver. Lastly, I would say, Ricky, that as we've noted in the past, We are willing to own, as we do in a select MSA out in the Southwest, we are willing to own primary care physical assets if we conclude that the only way to get the right balance of affordability, access, and quality is through ownership. But our preferred approach is, again, to partner and enable, and that has served us well for quite some time while we seek to differentiate ourselves in virtual, specialty pharmacy, behavioral, and home care.

Brian, I'll ask you to pick up on Humira. Okay. Good morning, Ricky. So in terms of biosimilars and how we think about Humira relative to the long-term 4% to 6% expectation, we're at a bit of an inflection point right now because we're getting ready for some acceleration in the biosimilar market, as you know, over the next two to three years. And David talked about this in response to an earlier question. But even Humira alone and Stelara, those two drugs by themselves represent about 20% of total specialty spend. So the next two to three years will be very telling. in terms of how much interchangeability comes to market, how much we're able to move customers over, et cetera. And we're very excited about the prospect to generate affordability for benefit of our clients and customers and ultimately capture a piece of that value in terms of our economic model. It'll be just four weeks from today, actually. We have our investor day, and in that time period, Eric Palmer's going to spend a little more time talking about biosimilars and how that links into our financial picture. So I don't want to necessarily front-run that conversation We'll give you more detail at that time in terms of how to think about that contextually in the sense of our longer-term Evernorth growth expectations.

Thank you, Ms. Goldwasser. Our final question comes from Dave Windley with Jefferies. You may ask your question.

Hi, good morning. Thanks for taking my question. I have a two-parter on commercial membership. I'm wondering if consolidation of slice business is a theme in your target customer base, if you're seeing that, and if Cigna is or can be a beneficiary of that. And then I'm also wondering, as Medicaid redeterminations turn on, presuming they do, can Cigna be a beneficiary or catch Medicaid members moving into commercial, or is that difficult because you don't have them in a Medicaid book?

David, good morning. It's David. I'll take both your questions. First, I would not call out, you know, slice phenomenon, whether it's slicing or consolidating as a major driver, specifically as it relates to 2022. The phenomenon transpires as clients look for additional value and as they seek additional value. I'd underscore, though, a little bit of a subset here that may be inferred in your question. As we've all learned throughout the now prolonged pandemic, where people live and work continues to be more fluid than ever. Hence, having the seamless network access, care coordination, and service capabilities that are truly national and, again, seamless remains a differentiator. And like a few, I'm not going to say Cigna is one of them, like a few, that proposition I think is even more important today than ever before in terms of supporting the marketplace. But I would not call it the slice phenomenon as unique. As it relates to the Medicaid redeterminations, first, in our 2022 outlook or our multi-year strategy as it stands today, we do not have a big uptake that would be planned for relative to redeterminations. We do think we'll be a net beneficiary. There'll be some that plays through. And whether it shows up in our IFP or exchange business or in our commercial portfolio through the mechanisms in which people access care or services, We do believe that we'll see some opportunity in it, but we do not have that factored into our outlook. And we do not believe that you have to be a Medicaid player to benefit from that. We've seen seamlessness of individuals moving over a prolonged period of time, even pre-pandemic, between programs. So that phenomenon, as it relates to the redetermination and the way in which people seamlessly move between either Medicaid and exchange, or whether they move between Medicaid through a redetermination now to a broader commercial population, we do not see Medicaid as a gate. So that presents some potential upside for us going forward.

Great. Thank you.

Thank you, Mr. Windley. I'll now turn the call back over to David Cordani for closing remarks.

Again, thank you for joining us on our call today. Just to reinforce a few points, we achieved strong results in the first quarter, and we're stepping into the rest of 2022 with momentum. We're confident that we will deliver our increased EPS outlook of at least $22.60 for 2022. Our performance is a direct result of the hard work, dedication, and passion of our more than 70,000 coworkers across our company who work every day to change people's life for the better. Our actions are also guided by our drive to make healthcare more affordable, predictable, and simple for our clients and our customers, as well as our patients. We look forward to talk to you more next month at our Investor Day about our vision for the future and the progress we are making in driving a meaningful impact for those we serve, as well as our long-term sustained growth outlook. Hope you have a great rest of your day.

Ladies and gentlemen, this concludes Cigna's first quarter 2022 results review. Cignair Investor Relations will be available to respond to additional questions shortly. A recording of this conference will be available for 10 business days following this call. You may access the recorded conference by dialing 866-357-1405 or 203-369-0111. There is no passcode required for this replay. Thank you for participating. We will now disconnect.