Hi, good morning, everyone. Welcome to the Morgan Stanley Healthcare Conference. I'm Erin Wright, a Healthcare Services Analyst at Morgan Stanley. We're very happy to have with us a very timely conversation with Cigna today. We have the CEO and Chairman, or Chairman and CEO, David Cordani, with us today. Thank you very much, so much for taking the time with us. For some quick disclosures here, for important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. If you do have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'm going to hand it over to David for some opening remarks.
Sure. Thank you, Erin. Good morning, everyone. I appreciate you investing some of your time to talk about Cigna. I'll just make a few macro comments, and then we'll get into Erin's Q&A. First and foremost, framing our enterprise strategy more broadly. The Cigna enterprise strategy that has two large operating platforms, the Cigna Healthcare benefits platform and the Evernorth services platform, is a strategic portfolio of businesses that are designed to thrive, grow, and continue to deliver differentiated value in a dynamic marketplace, in an evolving dynamic marketplace. That's best underscored with our sustained track record of our EPS growth, which is aided by our top-line growth, obviously, where we've been able to grow in excess of 13% EPS CAGR over the last decade.
Demonstrating, the durability and ongoing innovation and evolution of our business model that serves corporations, obviously, through employers, health plans, governmental agencies, increasingly integrated delivery systems, and for certain lines of business, direct to consumers. Within that portfolio, I'll just tease out the three major, business units that drive our organization. First and foremost, our specialty and care business. That's 30% of the entire company. So in that, you can think about the specialty pharmacy as the largest driving subset of that portfolio. We have a proven track record to drive leadership, largely in the chronic space, but more broadly in the space, to deliver differentiated value to patients directly, overall affordability and clinical quality, for the benefit of those we serve. That is a large addressable market. That addressable market in aggregate is $400 billion.
It's growing at a high single-digit growth rate, and we expect to grow a bit above that because of the nature of our competitive capabilities. Ongoing innovation is important in that space. Underscoring that is the biosimilar trend and our disciplined approach to biosimilar trend. We took a unique approach to the market, and we're able to deliver Humira biosimilar that takes incentives all the way down to the consumer level, delivering a zero out-of-pocket for a consumer, saving on average of $3,500 a year. And today we announced a posture relative to Stelara, where, again, we'll be able to have an interchangeable biosimilar delivery, which benefits all stakeholders along the equation, including, importantly, the patient, saving, in this case, on average of $4,000 a year. Second business is our pharmacy benefit service business.
Our large, diversified pharmacy benefit service business that serves a variety of stakeholders, both employers, health plans, governmental agencies. In that business, core fundamentals are important. Ongoing innovation is also important, and just to touch the tip of the way there, you could take the GLP-1 space that everybody's familiar with. We were able to innovate and evolve a solution known as EncircleRx for the benefit of the clients we serve to provide access, care coordination, lifestyle management programs, and peace of mind around overall affordability. Already, that program has two million lives in it in terms of rapid adoption, and it's one of a kind in the marketplace. Then lastly, while specialty and care is 30% of the company, pharmacy benefit services is 30% of the company.
The other 40% of the company is our benefits portfolio and our Cigna Healthcare benefit portfolio, led by our employer-sponsored marketplace. In that business portfolio, we continue to be able to grow in a disciplined basis. We've been able to deliver over a decade of sustained growth, for example, in the Select Segment, small to medium-sized clients with different innovation and sophistication of services, and in the recent time frame, we've been able to continue to demonstrate good, predictable, overall MCR and cost delivery from an affordability standpoint, harnessing all our capabilities, so you put it all together, we remain on track to deliver on our long-term capital commitments and shareholder EPS growth commitment. Going forward, our EPS growth algorithm is 10%-14%, plus an attractive dividend.
And as I noted in my opening, initial comment, our goals are not aspirational goals we episodically talk to. We have a track record of achieving them, having delivered at or above our previous objective of 10%-13% over the last decade. We now have a 10%-14% growth algorithm outlook, plus that attractive dividend. Erin, I'll hand it back to you.
Okay, great. So in your second quarter call, you did highlight that utilization remained broadly in line with your expectations, and you did beat consensus MLR in the quarter. Can you talk about some of the nuances there, but also could you provide an update on what you're currently seeing from a utilization standpoint to address this kind of upfront, and what your expectations are for the H2 of the year?
Okay. In the context of this question, we'll come back to that third business, the benefits portfolio, and largely my comments are gonna come at it through an employer book of business or the commercial book of business. Stepping back, remind investors, we delivered strong results throughout the totality of 2023. We expected in 2023 some elevation in medical cost trend. We planned for it, we priced for it, we executed against that. We delivered a very attractive result in 2023. We expected the, if you will, elevated cost pressure to continue on in 2024 within our pricing and planning approach. Obviously, our clinical programs and contracting programs abate some of that, and we continue to deliver overall competitive costs.
Through the H1 of the year, by and large, the medical cost trend is in line with our expectations, and as we step into the third quarter, we see that continuing on.
Okay, and then in terms of your broader thoughts on the most recent quarter and also the second half and the other moving pieces and the key drivers, I'm sorry, what should we be thinking about as we're modeling out kind of the third quarter, fourth quarter here?
Yeah, the quarterly patterns obviously bounce around year- to- year and otherwise. Q3 is an interesting quarter, and Brian, our CFO, gave a little additional guidance on the second quarter call relative to our H2 of the year expectations and the pattern of those expectations. I think the two highlights I would ask you to think about, first, fundamentally, broadly speaking, in line with our expectations, Q3 has a bit more days in it than last year's Q3, so there's a little bit of a year-over-year. When you're looking at trend, you're dealing with year-over-year. Q4, we'd expect normal seasonality.
We have a comparator versus our Q4 of 2023, where we had an outsized favorability in our stop-loss results that are, as we said, our planning projections for 2024. We were very clear we expected that to be more in line with our broader expectations, so underlying patterns, similar seasonality tends to, because of the nature of the way the MLR works in high deductible plans, have an upward trajectory in the MLR. Then Q3 and Q4, the two nuances I called out, are either more days, Q3 of 2024 versus Q3 of 2023, and then Q4, moderation of stop loss, more in line with our expectations versus an outperformance to the positive in 2023.
And most of your commentary on the utilization dynamic was on the commercial side. I guess any commentary on the other subsegments in terms of MA?
So when you click it down in terms of within our portfolio, we have our MA portfolio that fits in our benefit portfolio. As investors know, that is on track to be sold and closed by the first quarter of 2025. I want to be very clear on the employer-sponsored. The Medicare MLR is in line with our expectations and the basic conversation that Brian delivered in Q1 and Q2, broadly speaking, in line with our expectations, and nothing unique to call out on the individual exchanges either.
Okay. Okay, just wanted to make sure that was clear.
Sure.
Let's switch gears a little bit to Evernorth, because I really want to talk about kind of specialty and care services, and we'll get back to kind of the health benefits business as well as PBM. But, I guess, how would you characterize the long-term growth prospects? You talked a little bit about it more broadly, but tying into sort of the biosimilar opportunity, biosimilar Humira, you mentioned Stelara as well. How significant, you know, of a driver is that for you, and how would you characterize the opportunity?
So maybe just a quick table setting, since we're now shifting into Evernorth. Evernorth, the services portfolio we have, it encompasses the first two businesses I articulated, the specialty and care and the pharmacy benefit services business. Just by way of reminder for investors, over the last five-plus years, we've taken that business from a pre-acquisition of Express Scripts growth from 2%-4%, to 3%-5%, to 4%-6%, to 5%-8% algorithms. And the base is significantly larger today. So some of the items we're gonna talk about here are inherent contributors to that, as we've continued to be able to grow now a much larger service platform. First and foremost is expanding distribution access. As I noted, Evernorth is a service business that is designed to be open architected.
The vast majority of Evernorth's revenue is outside market revenue, not correlated to the benefits business. That's on strategy for us. Corporations, standalone relationships, health plans. We're a larger servicer of other health plans in America. We see that partnership opportunity is continuing to grow, governmental relationships, and then increasingly integrated hospital delivery systems and multi-specialty provider groups that are taking risks, so think about distribution access in a large addressable market. The specialty business, Erin, where you came back to, is a meaningful contributor to that. The specialty market, as I noted, is a $400 billion market. It's growing at high single digit.
We have market leadership posture in many dimensions of how you evaluate that, whether it's in orphan drugs, limited distribution drugs, our clinical acumen, our data acumen, and our ability to manage overall patient care, handling of medications, and clinical outcomes is quite positive. We have a nurse, a colleague nurse, an employed nurse within a one-hour drive of 90% of all Americans to go into homes and facilitate infusions and care coordination plans, et cetera. So that continues to track very well. And then the biosimilar component is additive to this as we go forward. We've been quite disciplined. Our Humira strategy was quite clear. We did not deem it to be a knife switch.
We have had an evolutionary environment from early 2023 to where we sit here right now in mid- to the H2 of 2024, evolving and always maintaining choice, improving affordability, and improving additional services as more interchangeables come forward. Importantly, Erin, as well, we have a portfolio of capabilities, including our CuraScript distribution asset, which distributes and coordinates services for physicians and delivery system partners. Our Quallent pharmacy services asset, which comes into effect as we're dealing with biosimilars, especially, where we're able to have for Humira, all dosage levels, interchangeability, and be able to coordinate services. Obviously, we're pleased to continue that on with the Stelara position and beyond.
So significant growth, positive trajectory and track record, broad distribution, capabilities to multiple addressable markets, and clinical leadership in the case of specialty pharmaceuticals for both the existing model and the evolving model.
Okay, I wanna get back to Stelara and Humira in a second, but since you did mention CuraScript, and you recently also re-upped your contract this morning, or at least it was announced from Cencora, with your Evernorth business and the distribution relationship there. Can you describe a little bit of the detail, any sort of major changes in terms of that relationship? I know you were making an effort to take more of the specialty business in-house to getting closer to 50% from the 20% today that's insourced. You know, where does that stand today? What's embedded in this contract, and what sort of flexibility do you have in this contract now?
Sure. So, I'm not gonna publicly go through details of a contract, but let me give you a bit of color and insight. First, CuraScript. CuraScript is a part of the Evernorth portfolio. CuraScript is a pharmaceutical distribution asset that largely faces off against physicians, multi-specialty physician groups, and care delivery systems. It is well in excess of a $10 billion infrastructure of standalone revenue today and growing rapidly. That's in addition to the kinda insourcing relationship that exists between CuraScript and Accredo. So large-scale, significant asset that continues to grow well within our portfolio and an important part of the breadth of capabilities within Evernorth, especially underscoring our ability to partner with and work with physicians and delivery system partners in a different way.
Our relationship with Cencora is a long-term relationship. We're a partner-based organization. One of our strategic imperatives is we seek to be the undisputed partner of choice. We're pleased to have extended that relationship, and I would simply just highlight we have ample growth opportunity off of our Cencora capability, as well as ample flexibility within the structured relationship we have had and have extended, with Cencora today.
Okay. And then understanding the adoption of biosimilar Humira took time and was a ramping sort of process in terms of how it was embedded in formularies in your adoption kind of curve. How would you characterize that then for Stelara and other biosimilars? Do they follow a similar path, or what is some of the lessons learned in terms of how that's transpired?
Yeah. So, you know, when you step back, as we looked at the biosimilar opportunity, and we were quite bullish and excited because at the most macro level, our society needs the rapid evolution of biosimilars to create more affordability capacity for additional medications that are coming down the pipe: gene therapy, cell therapies, personalized medications, et cetera. There's significant value creation opportunity from a societal standpoint. In some cases, early biosimilars were not interchangeable. That creates more complexity than interchangeability. You have existing patients. You have new patients. So the ability to manage choice, lead with clinical quality, and have the overall value is mission critical, and our Humira strategy, I think, is a perfect underscoring of it.
As we carried it through 2023 , throughout chapters of additional choice, additional flexibility, et cetera, we now sit in an environment where we have a multi-supplier sourcing model, as opposed to a mono-supplier sourcing model. That's positive in a variety of ways. Supply chain continuity, all dosage levels, de-risking in a variety of ways. Incentive alignment, as I noted, having a $0 copay, saving model that exists. We took our interchangeable program forward, as articulated on our second quarter call, just before the end of the second quarter. As we sit here today, we're a bit in excess of 25% of eligibles adopting, which is a very positive outcome, given that it started in the late part of June in terms of that interchangeable path.
And we see very positive traction in terms of the way we're interacting and delivering choice and incentivized choice to the patient and coordinating with the physicians. Will that be the exact adoption rate with Stelara? We'll see. But we see the ability to manage these curves, and having additional curves now come with additional biosimilars over time being a very attractive, sustained opportunity for us.
Okay, and then can you, can you also expand upon kind of other areas of specialty that you see as kind of attractive to you, whether it's cell and gene therapy, and what the growth prospects are across that segment?
Yes. So again, when you come back today, as I noted, the size of the segment is significant. $400 billion addressable market, growing upper single digits, we believe will grow in the lower double digit because of our capabilities. You have core specialty capabilities, you have the limited distribution drugs, you have the biosimilar class of drugs, and then you have the unique gene therapies, where there's 21 in the marketplace today, there's just shy of a thousand in the pipeline. Our capabilities for everything from the unique handling aspects of some of the most complex drugs to the data coordination, to the clinical coordination for the benefit of the patient in coordination with the physician, and importantly, for some of the most complex medications, back to the pharmaceutical manufacturer, remains differentiated in the marketplace.
So we see attractive growth opportunity across all of the above and both continue to invest in innovation, infrastructure, and resources within our specialty capabilities.
And do you see value in bolstering your specialty infusion capabilities at the moment? And you did mention this as an area potentially-
Yeah
-from an acquisition standpoint or inorganic growth opportunities just across specialty in general, but-
Yeah.
-yeah. What are the opportunities, or how would you characterize it?
So I'll kinda hold on the inorganic side of the equation for a moment. Maybe we'll talk about that a little bit more broadly. Not a negative message, but I don't wanna say that specialty is the only space that's of interest to us. Back to. If you think about infusions, you can think about chronic and acute, right? The marketplace has multiple segments. We have leadership position relative to the chronic capabilities. Breadth of drugs, clinical coordination, supply chain management, care delivery infrastructure, employed clinicians, one hour drive of 90% of all Americans, et cetera. Acute, we continue to expand our acute capabilities. We see that as a continued ability to grow. I noted, in terms of Evernorth's addressable market being, physicians, multi-specialty physician groups, and integrated delivery systems, that's where the acute piece of the equation exists.
Our CuraScript asset plays there in conjunction with our broader specialty capabilities, as well as some of our additional assets. So, we'll continue to move forward with our leadership in chronic, and then we'll seek opportunities in the acute space to further expand our reach and impact. It may have inorganic contribution. We are driving that today largely organically and complementing it inorganically.
Okay, okay. And then let's shift gears to the PBM, if that works, and just any sort of update on the selling season and how that is shaping up.
So, if you go back and look at the scale of our pharmacy benefit services infrastructure, we've continued to, knock on wood, successfully grow that from day one of acquiring Express Scripts, demonstrating we could deliver strong, continued value through service execution, affordability, clinical quality, and then new innovations on a go-forward basis. And the aggregate size of throughput of that business today is about 2x of what it was day one of the acquisition, if you just measure the throughput of that business. Our retention outlook for 2025, pause, because I got to remember what year I'm in when we talk about the growth algorithm.
Our retention outlook is quite strong, as we sit here today, and new business opportunities continue, and obviously, that comes off the back of a tremendous growth year in 2024 . So, strong service delivery, overall affordability. Importantly, the continued innovations we're able to bring forward through our SafeGuardRx programs, through our value-based care programs, through our EncircleRx programs, through our Embark programs, et cetera, continue to resonate in the market. So, we see another positive year ahead.
Okay, and then PBM regulation obviously has been something that we've dealt with over the years, in terms of scrutiny of the model, but I think there's a lot of misconceptions of the model as well, in terms of the value that you provide and the savings that you achieve for your customers. And so where do you see that coming, in the near term, in terms of regulation that could come into the fold either this year or next year, and how kind of policy and regulatory dynamics are evolving in your view?
Sure. There's no doubt that our industry has been, is, and will continue to operate in an active legislative and regulatory environment. It's the nature of our industry, and the pharmacy benefit services exist within the context of that. So, we accept that. That's a part of being a well-governed organization. Our responsibility is to be actively engaged in that regulatory process and cycle, and be able to be actively engaged on a fact-based principle orientation, not on a partisan orientation. A piece of our belief state around that is ensuring that any regulation or legislation that evolves continues to maintain choice, because the marketplace embraces choice. We've continued to evolve our model. We embrace transparency. We embrace continued evolution of products, programs, and services. We have full pass-through programs. We have point-of-service rebate adjudication programs.
We have a variety of choice. We'll expand transparency further. We do not see any one, regulatory environment as a derailer of our business model. Important, we have to continue to innovate, and drive broadening of capabilities and value creations for the benefit of those we serve, be it the federal government, state government, employers, other health plans, and integrated delivery systems, and we've proven that so long as we do that, our business model continues to grow and yield value on a go-forward basis, so an active environment, there's no doubt about it. We're embracing and engaging in the environment very directly, fact-based, but maintaining choice, for the benefit of the benefit decision makers remains mission critical here.
And then some of the changes in the retail pharmacy models that are out there, I guess, could you outline your understanding of some of your peers' kind of proposed retail reimbursement models and how you view that from a PBM perspective, and how that plays a role in terms of your relationship with retail pharmacies?
Yes. So the retail pharmacy dynamic in America is quite interesting in terms of, if you step back just for a moment, the US has an imbalance in terms of the retail access footprint. In some cases, there's not enough access, in some rural geographies, in some urbanly dense geographies, if you looked at it in a fresh set of eyes, there's an oversaturation of access. So when you have the conversation relative to here, clients are looking for the right balanced access profile for their employees or members or otherwise, and an overall value equation.
The value equation has a clinical equation, which we see, don't often talk about in terms of fill coordination, has a clinical dimension that comes across from a safety standpoint, it has an information protection standpoint, and has an overall value standpoint. Now, to the core of your question, we manage a variety of network or access provisions for the benefit of those we serve and have and will continue to do so. We'll engage in evolution of business models to be able to get that right access and affordability. We've rolled out our own cost-plus network as a choice for clients. There's exploration of that today, not heavy adoption of it today, but exploration in a choice-based environment, because we believe in affording more choice in a consultative way, and that environment continues to move forward.
Putting a circle around this, no matter who the client is, an employer, a health plan, a governmental agency, they're all looking for more value. They're looking for more value because of the overall pressure that exists in the ecosystem. So we'll continue to innovate our own solutions, partner with others, bring more precision to access profiles, and provide choice of access provisions on a go-forward basis.
Okay, and can we talk a little bit about GLP-1 adoption coverage overall? I think, you know, above the 50% mark, but, you know, how do you get coverage even beyond that? How is traction for EncircleRx? It may be still somewhat early, but some of the financial guarantee programs that you have with that, with employers, I guess, how do you think about the economics for you, as well as broader kind of adoption of GLP-1?
So with the GLP-1 space, first I step back for a moment. About a week and a half ago, I was for a couple of days in one of our markets, which is a normal part of how we operate, in terms of spending a lot of time in the markets. One of my visits was a couple hour breakfast meeting with about 15 clients. Another was a lunch meeting with about 15 brokers. Several were with delivery system partners. This topic is front of mind for everybody. So not just investors, it's front of mind for everybody. Because on one hand, it presents an example of pharmacological innovation that brings new services, new programs, life benefiting services.
On the other hand, it hits just what we talk about, an affordability challenge and how to get the right matching to come forward. Today, in Evernorth, about 50% of clients are offering GLP-1s in some way, shape, or form, in addition to diabetes management programs. The percentage in the Cigna Healthcare benefits portfolio is lower because the average client size in the Cigna Healthcare portfolio is smaller than it is in Evernorth. Evernorth serves the biggest of the big, versus Cigna Healthcare servicing a variety of sizes of clients. Two, the trajectory has continued to tick up. It hasn't knife-switched up, so it continues to grow in single-digit percentages, not in tens of percentage points going forward. Three, the interest in and engagement in what I referenced briefly before, our EncircleRx program, is through the roof.
Because clients are looking for how do you balance expanding access, but in a more sustainable way, for outside of or in addition to diabetes. And what the EncircleRx program does is it wraps a population, it aligns incentives, it coordinates lifestyle management and care delivery programs with access to the medications in an incentivized approach. And then we have guarantees. They're fee-based guarantees that wrap around it, 'cause we're aligned in the program along with the employer, as well as with their employee. And as I mentioned, we already have just in excess of 2.2 million lives in that program. So continued evolution in the space, but as you're monitoring, you're seeing a little choppiness in the space. One large state, not our client, had it fully accessed, then dropped it based on affordability.
On a final note, like any innovation curve, you're seeing more manufacturers bring more solutions to market. That's a net positive from an affordability standpoint as well.
Okay, I wanna switch gears to the health benefits segment, and particularly on the commercial product and the mix there. But based on the conversations with your commercial clients, I guess, how do you see the employment market now, at the moment? What are you assuming in terms of what continues throughout 2024 ? Membership growth, I guess, in 2024 , impacted by some of the, you know, ASO contracts, the dynamics. But can you remind us of the long-term growth profile across the commercial business for you and the key drivers for Cigna, particularly in that select segment as well?
Sure. So big picture in the employer commercial business, so I pause to make sure we're slicing the segment correctly. We see this as a sustained mid-single-digit growth business for us. We at times have grown at a faster rate. That's essentially about a 1% secular tailwind, plus inflation or rate execution, plus net share taking. We've expanded our profile in terms of markets that we have high concentration of intensity of go-to-market resources and overall competitiveness of our offering, about 2x from 2019 to today. So we look at this market in terms of not at a state level, not at a city level. We look at it at an SMSA level.
You slice it down, in terms of continue to drive precision to the overall market. With that approach, we've been a net share taker, and we've grown this asset very nicely over time. Through intense focus, consultative, benefit, decisions that we help our clients deliver, a heavy orientation relative to integration of programs, specifically medical, pharmacy, and behavioral, and the overall medical cost trend and value we're able to deliver relative to that. That shows up best in Erin's comment, relative to the Select Segment. Think about those as largely employers with 500 or 100-500 employees, therefore, 200-1,000 covered lives. Fully integrated offering only. It doesn't get sliced up. Greater than 50% of those are ASO with stop loss, less than 50% of those are guaranteed costs.
We like ASO with stop loss 'cause it's fully transparent. We sit with our clients every month, and you're able to modify designs of the benefits on a micro basis throughout the course of the year. Communication strategies, incentive strategies, clinical programs, et cetera, and it results in a very positive outcome. That algorithm and that resource base continues to perform very well. And importantly, we have a dedicated subunit in our organization that focuses only on that segment, so we don't cross-pollinate because there's a specialization that exists there. So we see continued positive growth in this marketplace, led by that segment over time.
Okay, and then just switching to the exchanges, I guess, how are you thinking about the growth trajectory there, long-term margin profile for the exchange business, as well as likelihood of enhanced subsidies remaining intact, I guess, in, you know, beyond 2025 , and that potential impact to long-term growth?
Working up to five-part questions-
Sorry.
-from three-part questions.
We're running out of time, so.
Exchanges for our company have continued to be a complementary part of our business, not a lead part of the business. What I mean by that is, you go all the way back to the initiation of the exchanges. Because we weren't a small employer player, we didn't have to enter the exchanges to protect the book. We chose to enter them selectively in five states to learn, and we expected the market to be smaller than projected, choppy, and lose money in aggregate for the space. It did, 2014, 2015, 2016. We stayed, we learned, and we slowly expanded our market profile over time, picking markets and submarkets within states. The last year was a little bit of a choppy year for us. We had two states that had out-of-market growth and out-of-market performance.
We rectified that, stepping into two thousand and twenty-four. We shrunk those states, improved the overall profitability, and broadly speaking, our exchange business is performing in line with our expectations for 2024 . We continue to dynamically manage the portfolio, looking market by market, based on our value-based care relationships we have with our provider partners, to determine what markets make sense to position ourselves in, what submarkets make sense for us to position ourselves in, and how we do it in an aligned basis with our care delivery partners in those MSAs that we participate in. Obviously, a lot of focus on the subsidy extension. Stay tuned for more. There's a lot of effort and energy around that. Clearly, the enhanced subsidies expanded the market. It's indisputable. You can look at the data.
So one might project that, absent or sunsetting of that would have a rebasing of the marketplace, in terms of the volumes that we take through. That will not be a big, driver for us, given the size and shape and scope of this. That doesn't mean we're immune to it, if the market changes, but it is not a large driver of our enterprise portfolio.
Okay, and then I want to spend the last few minutes here talking about M&A, capital deployment. Obviously, that's been a key focus for investors here as we think about kind of the Cigna story from, you know, buybacks to potential M&A and larger transactions as well. Where is the focus, and where does your commitment lie today from a capital deployment standpoint?
Yeah. Important topic. So, to address this topic, you have to go back for a moment and say you have to generate the operating cash flow and the free cash flow available for deployment. Important just for a moment to ground in that. Our business portfolio is designed to have a high conversion rate of our operating earnings to deployable cash flow. Our service-based infrastructure, as an illustration of that, enables a significant conversion of operating earnings to deployable cash. Our track record has demonstrated that we are good stewards of operating cash flow. We don't let operating cash flow sit idle, and we put that cash flow to work. First and foremost, we have a commitment to a sustained, attractive dividend. We deploy back into the organization a CapEx portfolio for ongoing R&D on a more sustained basis.
The residual part of our operating cash flow gets pushed back to our shareholders in one of two ways, either strategically attractive, accretive M&A or share repurchase. We've been pretty disciplined over the recent past in terms of share repurchase. We noted, as we were entering this year, we expected to repurchase at least $5 billion of our stock in the first half of fiscal year 2024. We accomplished that, and returned the $5 billion. If you track us back to 2023 and prior to that, we have a very disciplined track record of share repurchase. On a go-forward basis, we see M&A as nice to have, not a must-have. We see M&A as having to pass first strategic hurdles and then categories.
Strategic hurdles, obviously, it needs to be complementary to our strategy. Second, it needs to be financially attractive with line of sight to an accretion model, that we are pleased with, which means durability of and the ability to gather with tangible nature, the value creators you hypothesize are in a potential acquisition, and importantly, the ability to get it across the finish line, i.e., close it. Assets we would contemplate would either extend our reach, or extend our capabilities. We talked about, earlier, an example of an area that would extend our capabilities in our Accredo business, more specifically in our specialty portfolio.
So discipline around cash generation, discipline around the capital deployment, biased in our past track record toward share repurchase, given the asset portfolio of the company, maintain a very attractive growth outlook and cash flow generative outlook, and we'll be disciplined from an M&A standpoint.
Okay, great. Thank you so much. I appreciate the time today. Unfortunately, that's all we have time for.
Thanks for being with you.
Thanks.
Appreciate your time today.