The Cigna Group (CI) investor relations material

PBM business transformation and Signature model

• Transitioning from a rebate-based to a rebate-free, fee-based Signature model to enhance affordability, transparency, and predictability for clients and patients.

• Industry-wide shift anticipated, with the new model scaling in 2028 and at least half of members expected to be on it by year-end 2028.

• 2026 and 2027 will be transitional years with significant investments in recontracting and technology; profitability expected to align with legacy models by 2029.

• Signature model offers greater budget predictability and guarantees lowest out-of-pocket costs for patients, compared to rebate pass-through models.

• Competitive advantage expected for those with the best unit costs; long-term growth not predicated on market share gains.

Financial outlook and margin expectations

• Three largest PBM contracts renewed at lower profit levels but with greater predictability; these are considered separate from the rest of the book.

• Remaining PBM business expected to achieve 4% profit margins by 2029, consistent with industry norms.

• Long-term PBM growth outlook remains at 2%-4% annually, regardless of model transition.

• 2027 selling cycle for legacy PBM model is off to a strong start, with high retention and new business growth.

• Margin recovery in stop loss business expected to complete by 2027, following significant repricing.

Specialty business growth and innovation

• Specialty business now represents 35% of total income, up from 20%-25% four years ago, with a $500 billion addressable market growing at 7%-8% annually.

• Strong position in patient-administered specialty drugs; expanding into provider-administered segment through acquisitions and investments.

• Biosimilars like HUMIRA and STELARA have driven affordability and profitability; future opportunities include Prolia, EYLEA, and KEYTRUDA biosimilars.

• Specialty business expected to deliver 8%-11% annual growth, leveraging secular trends and company-specific capabilities.

• Oncology identified as an area for further strengthening, though overall platform is robust.