Brian Evanko: Gary, it’s Brian. So certainly, your point is well taken in terms of large price increases can have impacts on the customer volumes in disproportionate ways. We have to see how this cycle plays out in terms of the elasticity of the customer growth relative to those pricing actions. To David’s comments earlier on our tailwinds, this is one of several tailwinds that we have. So I would encourage you not to over-index on the customer volumes in terms of our ability to deliver against the $28 of earnings per share. Just if you think about the context of this, it’s a $5 billion block of business. Target margins, that’s $250 million of profit. The midpoint of the 4% to 6% range. So if you think about the delta there, relative to the year-over-year, we’re talking about $100 millions of income growth at the enterprise level.
So I just — I would encourage you not to overindex on this one specific factor. But we’re confident we’re going to see the margin expansion. We’re confident we’ll see the income tailwind, and we’ll give you more updated guidance on the fourth quarter call.
Operator: Our next question comes from Nathan Rich with Goldman Sachs.
Nathan Rich: I wanted to follow up on the comments around GLP-1 through obesity, and the potential value of Evernorth can deliver for clients there. I guess, could you go into a little bit more detail on the nature of discussions you’re having with the drug manufacturers right now on pricing and getting that to a level that could expand access? And what role, maybe, the outcomes trials will play in those discussions in terms of potentially — from your kind of commercial customers, their desire to expand access to these therapies for their populations?
David Cordani: It’s David. Just a little framing. And consistent with prior conversations we’ve had. To date, within our benefits portfolio, you could think about 10% to 20% of our clients currently having adopted an optional buy-up or coverage for weight management outside of the already formulary positioning for diabetes for the drug class, number one. On the Evernorth side of the equation, as we’ve discussed before, the percentage is higher, and you can think about why the difference. The difference is within the Evernorth portfolio, the commercial employer landscape is larger employer size on average versus the diversity that exists on the Cigna Healthcare care side. And then within the health plan portfolio, enabling some aspect of it from an access.
So that gives you little stage setting of the fluidity of the current environment. Your question comes down to a fair amount of detail relative to pricing and working with the manufacturers. I’ll ask Eric to talk just more broadly, this is an area where, as we discussed in our prepared remarks, where the broad capabilities of our Evernorth portfolio significantly thrive in terms of data clinical aspects, clinical coordination, relationship with pharmaceutical manufacturers and importantly, relationship with practicing physicians to get the best coordinated care. So Eric, could I ask you to expand on that a little bit?
Eric Palmer: Great. So with respect to this, Stepping back, I would have you think about the impact here that will need to unfold, will be around improving affordability. As has been said and reported across a variety of different channels, these therapies are effective, but they’re also very expensive. We would expect that over time, we’ll be well positioned to harness the power of competition to improve the affordability to bring the cost down. That’s an important element. But then in addition to that, we’re positioned to wrap and support these patients with additional services, clinical services, the right approach, the right targeting to ensure the maximum effectiveness here. So I don’t know that it’s constructive to talk about any of the kind of ongoing dialogue with manufacturers.
But rest assured, that we are very engaged with the variety of pharma manufacturers in this space, looking at ways to expand access and improve affordability, just like Express Scripts is a long history of doing, as new innovations have come to the market and the pharmacy space, and we’ll continue to be a leader there.
Operator: Our next question comes from Dave Windley with Jefferies.
David Windley: Mostly a clarification. On the government utilization, maybe particularly Medicare Advantage, it sounds like it was in line with your expectations. But I wondered if you could comment if you are seeing elevated — in the elevated outpatient that gets called out by others in the space, and that was just, again, in line with your expectations. And then in terms of managing utilization inside of service. You mentioned good success in managing side of service and Pathwell. Is Pathwell the primary vehicle by which you’re doing that? And what is the kind of customer adoption or the penetration, I guess, of Pathwell in your side of surface utilization management?
Brian Evanko: Dave, it’s Brian. So on your first question on the MA utilization patterns, as I mentioned earlier, when we stepped into 2023, we expected more normalized utilization levels across all of our different product lines, and the claims experience is broadly in line with that. And within the MA book specifically, throughout the entire year, we’ve seen elevated utilization in both outpatient and professional services in particular. But again, within the context of what we had forecasted and planned for. So the third quarter, our government lines ran broadly in line with where we expected them to. And as I said earlier, our U.S. commercial business really drove the favorability. So again, the MA patterns were broadly a continuation of what we saw in the first half of the year, and our 2023 guidance and 2024 bids anticipate that these dynamics will continue as opposed to assuming any meaningful amount of cost abatement occurs.
On your second question on site of service, I did call out the Pathwell specialty example. But you should think of that as one of the many arrows that we have in the quiver, if you will. So the work we’ve been doing over the past several years has largely been moving inpatient to outpatient. We’ve been moving things from emergency rooms to urgent care, moving things from physician offices to virtual. So Pathwell Specialty is another example of the evolution of our CytoCare program. So I wouldn’t view that as the silver bullet here by any means, but it’s an incremental contributor to the strategy we had in place for several years now.
Operator: Our last question comes from Lance Wilkes with Bernstein.
