Good morning. Welcome to The Cigna Group's 2026 Investor Day. I'm Ralph Giacobbe, Senior Vice President of Investor Relations, and on behalf of our leadership team, we want to thank you for joining us today. We're excited to share how we've deliberately shaped our portfolio to position The Cigna Group where healthcare is growing and where we can create the greatest value. Today, you'll hear about our Lead to One vision, driving greater personalization for all our members, but the greatest impact on those with complex conditions, where we have a unique and differentiated set of assets and capabilities. We'll delve into our three largest businesses, Evernorth Specialty and Care Services, Cigna Healthcare, and Evernorth Pharmacy Benefit Services, and how we'll drive profitable growth and add value across the system.
You'll hear about how our advances in data, technology, and AI, together with our clinical capabilities, enable us to deliver more personalized services, better outcomes, and greater affordability for patients and clients. We'll discuss how the strength of our businesses, together with our operational execution and disciplined capital deployment, supports our attractive long-term operating earnings growth and shareholder value creation. We look forward to your engagement throughout the day. Now, before we begin, I would note that today's presentation is being webcast live, and a full set of presentation slides are posted on our investor relations website. Also want to remind you that we will be referring to non-GAAP measures and making forward-looking statements. Relevant definitions, reconciliations, and disclaimers are available in the presentation slides. Actual results may differ materially. With that out of the way, let's get started.
Please welcome Brian Evanko.
Thanks, Ralph. Morning, everyone. Thanks for joining us for The Cigna Group's 2026 Investor Day. I'm Brian Evanko, President and CEO of the company. While this is my first Investor Day as CEO, I have been with The Cigna Group for close to 30 years. We have a lot to talk about today. We look forward to taking you through some of the great things we're doing to create value in the market, as well as for our shareholders. We're going to talk today about the strong foundation of The Cigna Group, the clear strategy that we've developed for success in the future, as well as our proven ability to execute. We look forward to today's dialogue with all of you. I'm going to hit on a few key areas here in my opening remarks.
First, our track record of evolving the company through different periods of environmental change. Secondly, the portfolio we have deliberately constructed to deliver results today, as well as grow into the future. Third, the capabilities that we have built up over a period of time that are differentiated and increasingly difficult for others to replicate. Finally, the way we execute with discipline, both operationally and financially, and how all that translates into a long-term shareholder value proposition. Let us start by talking about our track record over the past decade. The last 10 years has been characterized by what I would describe as extreme environmental disruption. We had a global pandemic, hopefully the only one in our lifetime. Affordability has reached crisis levels of healthcare. Significant changes from a policy standpoint. Think all the government-sponsored healthcare disruption.
Changes from a regulatory standpoint on both the medical side and the prescription drug side. Over all of that, The Cigna Group has made deliberate decisions on where we can create the most value in the market. We started a decade ago as predominantly a health plan focused on serving employers. In 2018, we made the decision to combine with Express Scripts, which gave us instantly a leading health services platform with both Express Scripts, our PBM, as well as Accredo, our specialty pharmacy. Subsequent to that, we made strategic choices to divest certain businesses that were non-core, such as our group life and disability or our international supplemental operations, and we made a decision to divest businesses where we did not feel like we had a competitive advantage, such as our Medicare operations last year.
Along the way, we added other capabilities, specifically to intensify our focus around complex care needs. Think some of the investments we made in specialty pharmacy capabilities over the past two to three years. This just demonstrates a track record of disciplined portfolio management to make sure the company can succeed and thrive over the long term. What resulted from this is a larger company, but a more focused company. We have actually transformed the company from 10 years ago, being a relatively small health benefits-focused company, to today, one that has the benefit of three strong growth platforms. Our specialty pharmacy capability in Evernorth, our broader pharma services platform within Evernorth and Express Scripts, and Cigna Healthcare, squarely focused on serving employers. All of these businesses have an emphasis on complex care, and that is where spending in the healthcare system is increasingly concentrating.
We have increased exposure to where there is attractive long-term secular trends. Simultaneously, we have reduced exposure to those areas we do not feel we have a competitive advantage. All of this demonstrates a consistent track record through periods of extreme change. You would have seen this morning we reaffirmed our 2026 financial outlook for all key metrics. We are tracking to deliver 14% compounded EPS growth over the last 10 years, despite an extremely disrupted external environment from the pandemic, economic shocks, significant changes in government-sponsored healthcare programs, and affordability pressures. That consistency comes from the durability of the company, our willingness to adapt, as well as the way we execute with discipline. Throughout that time period, many others in our sector had substantial financial resets and considerably more variability in their performance.
Our disciplined execution and the deliberate choices we made about our portfolio have guided us since our last Investor Day. It was about two and a half years ago, we were last together for a The Cigna Group Investor Day. Since that time period, we have navigated a very dynamic environment, and through that, our Specialty and Care business now represents 37% of the company's total earnings, up from just 30% two years ago. In Cigna Healthcare, our Select segment, which represents employers with 500 and fewer lives, we have grown the customer base by 12% since our last Investor Day. That is well ahead of the industry average. We have continued to return a substantial amount of capital to shareholders.
Additionally, we have been able to navigate some significant policy and regulatory changes. A good example of this, last year, we introduced our revolutionary new Signature model in Pharmacy Benefit Services. Rebate-free, the only company that has introduced that, fully transparent, fee-based, simple, guarantees patients the lowest possible out-of-pocket. This model will fully scale starting in 2028, and it is where the industry is headed. We are proud to take a leadership position by stepping away from the competition with our Signature offering. We also were able to grow our EPS every year since our last Investor Day, which is a differentiated result relative to our sector. Our portfolio has continued to shape itself around specialty pharmacy, broader pharma services, and employer-sponsored healthcare. As CEO, there are a few areas in particular that I am focused on to ensure the long-term sustainability of the company.
One is driving customer personalization with a particular emphasis on those who have the most complex healthcare needs. A second area is how we use data, individual context with our customers, clinical capabilities, advanced analytics, and AI to drive that personalization. Finally, we will continue to invest in our people and in our culture. All those things will ensure the long-term success of The Cigna Group. We have a strong foundation to build from. We have breadth across three strong growth platforms, balance, and all of this supported by scale. Today, Cigna Healthcare represents about 40% of the company's earnings.
Evernorth, our health services platform, represents about 60%, of which 37% is Specialty and Care Services. We have multiple earnings engines for growth, and they are mutually reinforced through clinical data, customer relationships, and distribution that are cross-enterprise in nature. These deep relationships give us the ability to operate at scale. In fact, today, we have some 22,000 employer relationships.
Additionally, we have industry-leading access to limited distribution drugs in our Accredo Specialty Pharmacy, with 330 and counting. This strong foundation across The Cigna Group positions us well for the future needs of the healthcare system. Right now, I would assert that the environment for healthcare is at an inflection point, and the current trajectory is unsustainable. Challenges are not just affordability, but also rising consumer expectations. We are seeing healthcare costs grow faster than inflation, faster than wages, faster than the economy. The average hospital stay is up 280% since 2000. While new prescription drugs have brought cures to many patients and significant innovative benefits, that comes at a cost, with newly approved prescription drugs over the past several years being in the $200,000-$400,000 basis on a median list price.
Additionally, consumer expectations continue to increase. Relative to other parts of their life, people want healthcare to feel convenient. They want it to feel transparent. They want it to feel personalized. They want it to feel easy. The silver lining in all of this is that the explosion of data, the advancements of technology, AI, advanced analytics now make things possible that were not possible five years ago or 10 years ago relative to meeting those increasing consumer needs. Additionally, chronic and complex spending now represents the majority of healthcare costs, and it is where costs are growing the fastest. All these trends, all these market forces have shaped The Cigna Group's forward-looking strategy. This is an important slide because it gives you a little bit of a background for what the rest of the day will go deeper on.
Lead to One is our single unifying vision that drives all 60,000+ of The Cigna Group colleagues. The essence of Lead to One is driving personalization at scale. Personalization at scale for all the customers we serve, all the patients that we serve, all of those we are privileged to serve. This includes supporting those who are currently healthy all the way through to those with the most clinically complex healthcare needs. When we achieve this and we deliver personalization at scale, it will result in better affordability as well as improved customer experiences for those dealing with the healthcare system. This vision is enabled by three things. One is our strategic growth framework.
You are going to hear from a number of our leaders today who are going to use our strategic growth framework to bring this to life in terms of how each of our businesses we execute against this. Secondly, one team. All of our colleagues around the world are oriented around serving our customers holistically, serving each patient as a complete person. Finally, Accelerate to One, which is our newly announced multi-year set of modernization and productivity initiatives. Ann will cover this in more detail when she talks about our financial update later today. Our Lead to One vision is driving personalization at scale, and it helps all customers across the entire clinical continuum. For healthy individuals, we strive to provide the right preventive action at the right time. For those at risk, identify early warning signs before they become downstream problems.
For those who currently have chronic conditions, it might be helping them stay adherent to their drug treatment protocols. For those with the most complex care needs, coordinating across multiple providers. They may see primary care physicians and specialists, or clinical coordination across the medical plan, the pharmacy plan, and the behavioral health. All of these integrated needs are important for the most clinically complex populations. Our Lead to One vision aspires to serve every customer across the entire clinical continuum. But the largest potential impact on both cost and health outcomes is for those patients who have the most clinically complex needs. This is another important page because it provides some more context when we talk about complex care, which is the basis for many of the things we will discuss today. It is indisputable. Complex conditions are shaping the future of healthcare.
Currently, just 8% of all patients have complex care needs, but it represents 55% of the total healthcare spending. Coordination is critically important for each and every one of these patients. Costs are increasingly concentrated in these complex conditions. Additionally, drug spend is becoming a greater and greater share of total healthcare spending. We are seeing complex drug innovation continuing to grow, with most of the drugs in the drug development pipeline right now being high-cost specialty medications. This is where our portfolio, our expertise, and our infrastructure has been built to deliver value into the market. Our intentionally built portfolio leads to a high percentage of the healthcare spending that we impact being concentrated in complex care.
When I say complex, here I am talking about individuals who may take a specialty medication. They may see multiple providers, a primary care physician as well as specialists, and they may require clinical coordination across their medical plan, their pharmacy plan, their behavioral health plan. A good example of this is the photo on the screen there of Kelly. Kelly has alpha-1 antitrypsin deficiency, which is a genetic disorder that can lead to lung and liver damage.
Each of our businesses impact those with complex healthcare needs. Specialty and Care, 100% of what we do is complex healthcare. Every single one of the patients we serve has a complex healthcare need. In our Cigna Healthcare business, about 55% of all the spending we impact is associated with complex healthcare needs, particularly important for those who become high-cost claimants. Our industry leadership position in stop loss makes this especially important for us when employers seek to provide budgetary protection against large claims.
In our Pharmacy Benefit Services, about 70% of all of the spending that we impact is associated with complex healthcare needs. Typically, these are the high-cost branded drugs, which represent a minority of the prescriptions, but a high percentage of the spending. We are able to negotiate very attractive discounts from the drug manufacturers on these high-cost branded drugs and wrap that with clinical programs to ensure that patients stay adherent to their treatment regimen. All of this allows us to drive affordability and personalization at scale, and we are well-positioned for growth across all of these business units. Each of our three growth platforms operate in large addressable markets today, and they have attractive income growth outlooks through 2030. Again, when Ann gives you the financial update later, she will take you through the building blocks of these income growth projections through 2030.
You will note that our Specialty and Care platform represents the highest percentage growth rate from now through 2030, and we anticipate income growth in each of the three growth platforms. Importantly, the value that we create is both within each of the businesses, but also is mutually reinforced by cross-enterprise capabilities. We deliver all of these results every single day through our strategic growth framework. Throughout the day, we will bring our Lead to One vision to life through this strategic growth framework. There are three pillars here, three elements of it. The first is delivering core growth. Here you can think about the strong foundation and the deliberately shaped portfolio that we have built over a period of many years. Secondly, how we leverage distinct capabilities, the complex care assets that we have built up over decades, and the clinical expertise matched with the advanced analytics and AI.
And finally, how we execute with discipline, both operational excellence, but also financial discipline from the standpoint of capital stewardship. I am going to spend a few minutes on each element of this strategic growth framework to go a little deeper. We deliver core growth in a number of ways today. One, we deepen our services to meet consumer needs. A good example of that would be The Cigna Healthcare AI-powered virtual assistant that we introduced, or the new specialty offerings that we put into the market the last couple of years. The second way is through transforming to meet evolving market needs. I talked earlier about our Pharmacy Benefit Services Signature model. You will hear more about that from Adam later this morning.
We also introduced in July our new Pharmacy Forward innovation in Specialty and Care, which is reducing the time to therapy in half by taking out many of the manual touchpoints using the power of our clinical expertise with modern technology. A third way we deliver core growth is through expanding our distribution channels. A great example of this is in CuraScript SD, which is our specialty distribution business. Already $25 billion of revenue today, been growing double digits for many years in a row. Matt Perlberg will take you through a little more of the details on that later. And then finally, we continue to expand to new buyer groups. A great example of this is Accredo, which is our industry-leading specialty pharmacy. Increasingly, it is being included in unaffiliated PBM and payer networks because we have great drug access and great patient experiences.
Multiple avenues here for delivering core growth. Next, I am going to go a little deeper on what we have used our unique capabilities to deliver value in the market in a differentiated basis, and these are increasingly difficult for others to replicate. On this page, I have just selected a handful of unique capabilities. These are all specific to a complex care orientation. The differentiation that you see on the page has been built over a period of many years. For specialty pharmacy, we have a network of clean rooms that is extremely difficult to replicate. Industry-leading access to limited distribution drugs, over 330 today. And our specialty distribution capabilities, which are particularly impactful for provider-administered specialty drugs. In Cigna Healthcare, we have expertise in high-cost claimants, which is very important given the growth in high-cost claims across the health plan business.
And for Pharmacy Benefit Services, the ability to negotiate very attractive unit costs on high-cost brand drugs and wrap that with clinical programs such as SafeGuardRx to ensure that patients stay adherent. All these capabilities end up driving better outcomes and value creation into the market. I am going to go a little deeper on the expertise that we have developed in complex care to make sure there is good understanding of this. Our strategy allows us a better understanding of the underlying drivers of complex care, because in healthcare, complexity is very rarely driven by one factor. Typically, patients have multiple coexisting conditions, or they are taking specialty drugs and non-specialty drugs, or they are seeing a primary care physician and a specialist, or they require coordination across their medical, pharmacy, and behavioral health plans. We engage across the patient's entire healthcare journey.
We are able to address root causes and not just the visible symptoms. The ability to identify those signals, convert them to insights, and influence health outcomes is what is differentiated here. The key to all of this is taking the wealth of data we have and converting it through to personalized actions, and we do this through what we call our Health Intelligence Engine. When I say health intelligence, I am talking about taking the data we have, the clinical expertise, the individual context that we have on each of the customers and patients whom we serve, converting that to insights, and then personalized actions. This is a key enabler of our Lead to One vision, which is driving personalization at scale. We have a really broad data set. It spans medical, pharmacy, behavioral health, dental.
We are able to take that and generate new data with each customer interaction that we have, whether it is in a call center, whether it is each time they claim. Importantly, these differentiated assets that we have built up over a period of time play a key role in converting this through to execution. The result here, better health outcomes, improved affordability, better customer experiences with the healthcare system. Related to all of this is a thoughtful approach to how we address innovation and how we think about partnerships. Within The Cigna Group, we have built up an innovation ecosystem that is oriented around deliberate choices when we build, when we buy, and when we partner, all meant to drive value faster.
We approach innovation with discipline and pragmatism, and at the end of the day, when we decide to build or buy, it is because we see an advantage from a differentiation standpoint, or we believe there is value in ownership. Conversely, we partner where others can drive value faster or more cost-effectively. A good example of that right now is frontier AI models. We can partner with others who can do that more effectively than we can. We foster an environment inside The Cigna Group to test, integrate, and scale innovation. All the capabilities I just walked through the last several minutes are important. They create market opportunity. Disciplined execution is the key to bringing this to fruition. Our results demonstrate over a long period of time a disciplined track record of execution.
That includes operational excellence, which shows up in strong client retention, as well as strong customer experience relative to Net Promoter Scores and other measure of customer satisfaction. We are working across the organization to simplify, streamline decision-making, and improve efficiency. Today, we are announcing a $3 billion multi-year efficiency and modernization set of initiatives. And again, Ann will unpack this a little bit further later. We also continue to generate very strong cash flow, which gives us strategic flexibility. We employ a capital-light model. We continue to reinvest in ourselves first and foremost, but have enough free cash flow that we have a multifaceted approach to capital deployment. This execution orientation is only possible if we have great people and a strong culture. Our culture is oriented around long-term value creation, and as I said earlier, operating as one team.
One team serving customers holistically, serving patients holistically who we have the privilege to serve. There are a few principles that are important about our culture. We emphasize both purpose and performance. We emphasize serving customers, but also the communities where we live, work, and play. We focus on business unit expertise, but also an enterprise mindset. As CEO, I will be focused on continuing to strengthen this culture to accelerate our impact. A good example of where that focus will come through is in our Lead to One vision. How we can accelerate progress in delivering personalization at scale. A good example of this is how each of our 60,000+ colleagues embrace the power of data, clinical expertise, modern technology, and advanced analytics and AI to convert our Lead to One vision to reality.
We are investing in a learning and development journey for all the colleagues across The Cigna Group to ensure we are prepared to execute against our Lead to One vision. Additionally, we continue to give back to the community. I am proud to say we had 114,000 volunteer hours just last year. Today, we are announcing a new $10.5 million commitment to support patients who have complex healthcare needs and their caregivers. Our culture emphasizes accountability, innovation, collaboration, and importantly, a disciplined focus to execution. When you combine everything I just went through, deliberate portfolio shaping, differentiated capabilities, an orientation around execution discipline, and a strong culture, the financial proposition is clear. We are well-positioned over the long term for durable long-term EPS growth. Our portfolio is aligned to the trends that are reshaping healthcare.
We have and will continue to drive transformative change in the market, and we are confident in our ability to deliver 6% - 9% average annual income growth through 2030. Plus, our continued disciplined capital deployment, which will add 4%-5 % of EPS accretion annually. In total, we expect 10% - 14% average annual EPS growth through 2030, plus an attractive shareholder dividend that currently yields over 2%. Today you will hear from a number of our leaders about how we will execute against these specific goals. Our leadership team has been built for this journey. We have expertise across the healthcare system, from clinicians to relationship experts, to those who have deep expertise in the supply chains.
Our enterprise leadership team has over 14 years of experience at The Cigna Group on average, so we understand the company's strengths, we have institutional knowledge, and yet we also bring an outside-in set of diverse perspectives. Most importantly, our team is aligned around one strategy, one set of priorities, and has one orientation to execution. As I move to close, I would like to leave you with why we see The Cigna Group as being such a compelling long-term investment. We have positioned ourselves in the areas of healthcare where needs and spending are concentrated today and growing in the future. We have differentiated positioning in complex healthcare in particular. Our Lead to One vision is a clear, unifying destination for all of our employees to deliver personalization at scale for all the customers and all the patients we have the privilege to serve.
We have a deliberately shaped portfolio with strong business unit expertise, but also mutually reinforcing enterprise capabilities. We have a strong track record of executing both operationally and financially. We are also not relying on any one single market trend in the future, or one single future innovation to deliver against these results. All these capabilities taken together position us for durable growth and long-term shareholder value creation. Thanks for your time. I am going to turn it over now to the team who is going to bring this strategy to life for us. Matt?
Please welcome Matt Perlberg.
Morning, everybody. I am Matt Perlberg, President of Evernorth Pharmacy and Care Delivery, and EVP of Customer Innovation at The Cigna Group. It is great to be with you all. I have been with the company for about 13 years, and I have had the privilege of leading Pharmacy and Care Delivery for the past five years. This morning, I am going to talk to you all about the specialty market overall and why we are uniquely positioned to deliver sustained attractive growth. We are going to cover a lot of ground this morning, but there are four key things that I want you to take away from this presentation. First, specialty is a large, fast-growing market where we deliver personalized care to patients with complex conditions. Second, specialty is a growing contributor to the earnings of The Cigna Group. Third, we are the leaders in specialty.
We have differentiated assets and capabilities that are very difficult to replicate. Then lastly, we have considerable runway to expand our addressable market, particularly in the medical benefits space. To understand why we are so well-positioned, it is helpful to look at the breadth of our specialty ecosystem. We have a number of different businesses, and we serve a broad range of stakeholders, including over 1 million patients. Collectively, our businesses generate over $100 billion in annual revenue. We have a broad national footprint. We have leading access to medications. We have deep relationships across the healthcare ecosystem, and w e have a track record of delivering strong results. Over the last two years, since our last Investor Day, we delivered strong earnings growth at the high end of our range. We expanded access to generics and biosimilars. We expanded access to limited and exclusive distribution drugs.
We grew our footprint, and we have enhanced our capabilities. As a result of all of that, specialty now represents a greater portion of The Cigna Group's total earnings. Before I go much further, I want to take a step back, and I want to talk about what we mean when we talk about specialty and how specialty ties to our broader Lead to One vision. First worth noting, every specialty patient has a complex condition, and specialty drugs are those that are used to treat patients with those complex conditions, like MS, or hemophilia, or cancer. Very often these are infused or injectable medications. They will typically have strict storage and handling requirements. The specialty pharmacies who treat these patients do much more than just dispense drugs. At Accredo, our industry-leading specialty pharmacy, we deliver highly personalized patient care.
We have teams of clinicians, nurses, pharmacists, and more who deliver round-the-clock care for patients. This personalized care in specialty really matters. Let me give you an example. There is a condition that we treat within specialty called hereditary angioedema, or HAE. There is a picture on this slide of a single 30-day prescription for HAE. Take a look at that. A typical retail pharmacist, they could go their entire career and never see an HAE patient. Never. Our clinicians, they treat these patients every single day. The medications in specialty are also often quite costly. Specialty drugs can cost hundreds of thousands or even millions of dollars per patient. As a result, specialty is an important and fast-growing part of healthcare. Specialty drugs are now a roughly $480 billion market growing in the high single digits each year. Several factors are driving this growth.
First is a wave of complex drug innovation. The specialty pipeline remains quite strong. We expect about $100 billion in sales from new products launched by 2030. Second, we see growth in existing medications. Since 2000, specialty drugs have nearly doubled the number of conditions that they treat. Lastly, we continue to see growth in generics and biosimilars. Generics and biosimilars offer savings opportunities for patients as well as plan sponsors. We have already seen several large generic and biosimilar launches, Humira and Stelara to name a few, and yet we expect about $100 billion in annual spend to face new competition by 2030. Within the broader specialty space, patients can be treated under their pharmacy benefit or their medical benefit. We have strong and growing positions in each, and as I will touch on in a minute, that is a differentiator for us.
Let me first start with the pharmacy benefit. This is about 60% of the overall market. It is growing in the high single digits each year. It typically includes drugs which are self-injected in a patient's home or drugs covered under Medicare Part D, like Humira. We are leaders in this space. We serve about a quarter of the pharmacy benefit part of the market, primarily through our specialty pharmacy, Accredo. Accredo treats over 1 million patients with over 8 million specialty prescriptions annually. Accredo generates about $80 billion a year in revenue. Worth noting, of that $80 billion, about 40% comes from sources outside The Cigna Group, so outside Express Scripts, outside Cigna Healthcare. Patients, payers, providers, manufacturers, they choose us because of our differentiated capabilities, and I am going to talk about those in a minute. The other 40% of the market is the medical benefit space.
This space is growing in the low double digits. It typically includes drugs which are infused in a provider setting or drugs covered under Medicare Part B, like oncology infusions. We compete here by serving healthcare providers and helping those providers deliver specialty care. The largest of our businesses in this space is CuraScript, our specialty distributor. CuraScript serves over 12,000 healthcare providers. We deliver complex medications to physicians' offices, hospitals, health systems, and infusion centers. CuraScript generates about $25 billion a year in revenue. To put that $25 billion in perspective, if CuraScript was a standalone company, it would be a Fortune 200 company on its own. We also have several businesses that help hospitals and health systems treat specialty patients. Last year, we acquired CarepathRx. Carepath provides outpatient and home infusion services on behalf of hospitals and health systems, and we invested in Shields Health Solutions.
Shields is the leader in helping hospitals and health systems run their own specialty pharmacies. Stepping back and looking at the whole market, how do we access all of this growth? Our growth strategy is based on three key capabilities. What I am going to do next is I am going to talk about each of these capabilities. I will talk about how we differentiate today and how they drive our growth going forward. First, let me unpack our clinical and patient experience leadership. We have a clinical model in our specialty pharmacy, Accredo, that we have built and enhanced over decades. A hallmark of that model is that we organize patient care by disease state. We have 15 Therapeutic Resource Centers, or TRCs, where our clinical teams specialize by disease.
We have a TRC for blood disorders, we have one for neurological disorders, we have one for oncology, and several others. In many ways, our specialty pharmacy operates like 15 smaller pharmacies within a much larger ecosystem. This gives us the benefits of being large and small. We have deep levels of personalization, but we can deploy that personalization nationwide. We also have a leading clinical team. It includes over 1,000 specialized pharmacists. It includes dieticians, social workers, and it includes our team of more than 850 field-based infusion nurses. These are highly trained, specialized nurses. They are experts in their field. They deliver care in patients' homes, in provider settings, and they are out in their local communities. Nearly 90% of our patients live within one hour of one of our nurses. Unlike many others, we employ our nurses directly.
This gives us a much better and more coordinated level of patient care. It also helps our patients form relationships with their nurse that can, in some cases, literally last generations. If you are someone with one of these complex conditions, that level of personalized care from your caregiver really matters. The second key capability is our supply chain and operations advantage. First and foremost, we have leading cost of goods. Because of our capabilities, our reach, our expertise, we buy drugs and serve patients more efficiently than others. Full stop. In addition, we have leading distribution capabilities through CuraScript. Earlier, I mentioned that CuraScript is a $25 billion a year business. CuraScript has been growing at about 20% per year for the past five years, helping us reach even deeper into the supply chain. We also have leading operations capabilities.
We have over 30 care delivery sites, and we have four clean rooms. These are highly sterile environments where we safely mix and compound some of the most complex drugs. It can take years to build, license, and operationalize one of these clean rooms, not to mention all of the technical expertise to run one on a day-to-day basis. Most pharmacies do not have a clean room. Ones that do, maybe they will have one. We have four of them, and they are deployed across the country so that we can reach patients nationwide. But rather than just hear it from me, I would actually like to take you inside one of our clean rooms. And what I want you to do is pay attention to the level of personalized care that we can deliver for patients with the most complex conditions. Let us roll the video.
What we have built with our network of clean rooms is incredibly hard to replicate. These are complex medications that have to be prepared, maintained sterile, administered with expert physicians and nurses. And having a pharmacy, having the infrastructure across the country to be able to prepare these medications, it is absolutely critical. The average specialty pharmacy may have one clean room operation. They probably do not have any clean room operations. We have four, and we are building a fifth.
Building a clean room is a huge undertaking. It can take two to three years to complete that.
Standing up one of these operations is complicated. This requires technical expertise in mechanical engineering, HVAC, facility setup, workflow design.
The room itself is state-of-the-art from the standpoint of the filtration technology that we have in there.
The air that you and I are breathing right now, there could be upwards of millions of particles 0.5 microns or larger, and we frequently get as little as zero particles in that space. The finest piece of china placed down in front of you at a MICHELIN- star restaurant is probably nowhere near as clean as the floor in our compounding operation.
There is no room for error at all. Everything that we have to do has to be on point. It has to be meticulous. They go through extensive training to familiarize themselves with the sterile compounding.
These are absolutely life-saving medications.
We can essentially touch the lives of every patient in every neighborhood across the country.
That's why pharmaceutical manufacturers want to work with us. This is real, life-changing, impactful work that you can be proud of. You're doing good.
Thanks. As you can see, these clean rooms are pretty special, and they're one of the many ways that we personalize care for patients every single day. The final capability that I'll touch on is our leading access to medications. In the specialty space, manufacturers often choose one or a limited number of partners to treat patients on their products. Remember, these drugs are very complex. Manufacturers cannot risk choosing the wrong partner. They need a partner with best-in-class clinical capabilities. They need a partner with broad national reach, and they need a partner that can personalize care for each patient on each drug. We do this better than anyone. That's why at Accredo, we are the leader in access to limited distribution drugs. We have access to over 330 limited distribution drugs. This includes more than 30 products available exclusively at Accredo.
Just like Accredo is the leader in access to limited and exclusive distribution drugs, CuraScript is a leader as well. Manufacturers value that we are a one-stop partner. We can treat patients under the pharmacy or medical benefits space regardless of where they access their care. Each of these capabilities that I mentioned, they don't just operate on their own. They come together to create a flywheel that gives us a durable, competitive advantage. Let me give you an illustration as to how this works. The better clinical care we provide, the more access to drugs we win. The more access to drugs we win, the more patients we earn the right to serve.
The more patients we earn the right to serve, the better our supply chain and operations advantage, and we can use that advantage to return value to our customers, as well as invest in additional capabilities. That's the flywheel. That's why we've built a leadership position over multiple decades, and it's why we're confident we will continue to lead going forward. We are not standing still. We're continuing to innovate and execute for the future. There's three areas of innovation that I'm going to touch on. One is around technology, another is around our footprint, and another is around new solutions we're bringing to market. First, let me unpack technology. We recently brought to market a new AI-powered program that will help us deliver even better patient care. It's called Pharmacy Forward.
It will help us get patients started on therapy much faster, enhance the care our clinicians provide, and allow us to deliver even more personalized care. This is one part of our broader Health Intelligence Engine, and you're going to hear Katya talk about that a little bit later. Second, we are growing our footprint. We're building new sites. We're expanding existing sites. As you heard Dave mention in the video, we are even building a fifth clean room. This will create capacity for millions of new prescriptions and help us keep up with all the rising demand that we see. Lastly, we're bringing new solutions to market. I'll give you a couple of examples. One that we are really excited about. We are launching a channel expansion alongside CuraScript called Evernorth Wholesale Distribution.
Evernorth Wholesale Distribution will allow us to gain access to new medications and help us grow our business with new customers as well as existing customers. Second, we are bringing together pharmacy and medical benefit capabilities and improving options for patients. We recently brought to market a new pharmacy network whereby patients can choose whether to access care in their home through Accredo or a provider setting overseen by Shields. We have about 2 million lives currently enrolled in this network. By January 1st, we expect to expand that to about 6 million.
Lastly, we are creating new customized programs for manufacturers, and there's lots of different examples I could cite here. Rather than hear it from me, I'd actually like you to hear it from one of our manufacturer partners. This is a manufacturer that recently brought a new oncology product to market, and they chose Accredo as their exclusive specialty pharmacy. I want you to listen to them talk about why they chose Accredo and the differentiated capabilities that we have. Let's roll that video.
Hi, I'm Silvio Pacheco, Vice President of Market Access at UroGen Pharma. We're a small biotech dedicated to developing transformational products for patients that have uro-oncologic conditions. Accredo was so accommodating and built a customized program for us and what we look for in a partner that shares that equal sense of urgency, that commitment, and that passion to get these patients on treatment. Between the dosing regimen and the various temperature requirements associated with each of these products, a big component is the importance of having clean room and negative pressure room to ensure that we can compound these products in a safe and effective manner and be able to supply product across the entire U.S. And this is where Accredo comes into play. They have that technical expertise, and they've demonstrated that they can meet our quality commitments. Partnership's been phenomenal.
What you just heard from Silvio is one of the many ways that we personalize care for patients every single day. I know I covered a lot. Earlier, I said there were four things I wanted you to take away from this presentation. First, specialty is a large, fast-growing market where we deliver personalized care to patients with complex conditions. Second, specialty is a growing contributor to the earnings of The Cigna Group.
We will deliver 8%-12% long-term annual earnings growth, and by 2030, specialty will represent more than 40% of The Cigna Group's total earnings. Third, we are the leaders in specialty. We have differentiated assets and capabilities that are very difficult to replicate. Lastly, we have considerable runway to expand our addressable market, particularly in the medical benefit space. As part of this, we will add about $20 billion in new distribution revenue by 2030. We are the leaders in specialty today. We are well-positioned to lead going forward. Thank you all so much.
Please welcome Bryan Holgerson.
Good morning, everyone. I'm Bryan Holgerson. I'm the president of our Cigna Healthcare business in the U.S., and I also lead our efforts to improve health outcomes for The Cigna Group. I've spent more than 25 years at the company working with employers and delivery system partners. What I can tell you is the challenges that they're facing right now in the market around healthcare has never been more complicated. The health of the population continues to deteriorate. Pharma innovation is offering incredible breakthroughs, and at the same time, that combination is creating an affordability challenge that is not only real, but it's growing. We've seen very clearly that those concentration of costs are increasingly prevalent in individuals with complex conditions. That's where our health plan model, leveraging the unique assets of our company, is built to win.
Today, I'm going to focus on a few key areas that I'll outline here in just a moment. First, it's our differentiation. The combination of our health plan's improved affordability position, our strength in our integrated model with particular focus on complex care, and our expertise in risk transfer. Second is our market position. Select is our growth engine and how we can extend that growth up-market. Then third, we are investing in areas of differentiation. Through our execution, what you'll see is we are going to personalize at scale and we'll strengthen our risk management capabilities. That combination is going to be the fuel for our growth as we go forward. Let me back up just a little bit, and I'll start with the foundation for our business.
First, Cigna Healthcare is approximately 40% of the enterprise earnings, and we serve more than 18 million medical customers. These figures include our international health business, which is growing and comprises about 10% of Cigna Healthcare. Today, I'm going to focus on our U.S. employer business, where we serve over 20,000 unique employer relationships, and we serve them across three segments: national accounts, middle market, and Select. There are several drivers that support our growth across these businesses. First, we have deep employer relationships, and as I mentioned, an improved affordability position. Second, it's our integrated model. We bring together medical, pharmacy, and behavioral to create one connected view of the individual. This helps us identify needs earlier, it helps us engage customers more precisely, and ultimately, it helps us deliver better outcomes and lower costs for the employers that we serve.
Third, it's our continued growth in Select, where our integrated model, combined with our risk transfer expertise, allows us to create funding solutions that are unique to the needs of each individual employer that we serve, which is a big differentiator in the market. We see opportunity to bring those integrated capabilities further up-market. That foundation is what's enabled our success over the last two years since our last Investor Day. Since our last Investor Day, we've grown our U.S. employer base by 4%. We've gained share in middle market, and we've grown in Select, our targeted growth engine, by 12%. That growth has been supported by our improved affordability. As I mentioned, we've improved our unit cost position in 70% of markets nationally.
And at the same time, we focused on making care more connected and personalized for the individual that we serve, especially for individuals with complex care needs. So for example, we expanded our My Personal Champion program. This program is the high-touch support model that supports individuals with complex care needs. Now, all of these things combined demonstrates that our value proposition is resonating in the market. Now, backing up from this, the U.S. employer market remains large, and it is growing in line with healthcare costs, even as enrollment remains relatively stable. And we see through our value proposition an opportunity to continue to grow. So I already mentioned our unit cost position. We are now unit cost competitive in approximately 70% of the markets nationally. That is more than double where we were in 2019.
Ultimately, what that does is that allows us to compete in more markets where historically we have been under-penetrated. It is a catalyst for growth. Select is our growth engine, and it comprises nearly twice the earnings compared to its share of membership. We have 8% market share, and then we have significant runway for continued growth. Also in middle market, where we have 14% market share, we are growing. And in national accounts, a segment where we have 10% market share, we see opportunities to bring our capabilities further upmarket. So in summary, what we have is a scaled base, a stronger affordability position, and multiple clear paths for growth. Now, growing is ultimately dependent on the value that we bring to employers and to the customers that we serve.
And that starts with how we support individual customers across the healthcare continuum, from the healthy to those who have complex needs. Our Lead to One approach is about understanding the specifics of each individual person and personalizing care for those individuals so that we can help them improve their outcomes and ultimately lower cost. This is a better way of doing it, rather than treating each individual transaction as its own. For people with everyday health needs, capabilities like our AI-powered virtual assistant helps them more easily understand their care and get answers to questions quickly.
And if those needs emerge, we are able to identify opportunities, and again, engage them quickly. And for individuals with complex care needs, we leverage our clinical support expertise to personalize care and coordinate it. Now, the reason why this approach is really important is because of the challenges that customers, doctors, and by extension, employers are facing in the current healthcare system. So if you only remember one thing about the opportunity that we have and why we are investing where we are, remember this: fragmentation in our system across the healthcare system represents approximately one third of inefficient spending.
One third of inefficient spending. This is due to poor coordination, it is due to administrative complexity, and at the end of the day, it creates low-value care. So a person may see multiple providers, they may receive duplicative tests, and they may have to repeat the same information over and over again. What ends up happening is individuals get lost in the system. Outcomes suffer, and employers end up spending more for inefficient care. That challenge is even more pronounced for individuals with complex care. These are the individuals that spend the most time in the system and have the most cost.
The alternative is to bring all of those disconnected pieces and bring them together. This is why our integrated model, which leverages medical, pharmacy, and behavioral to create one connected view of the individual, enabling better coordination and better support, is so important. Through our Lead to One strategy, our goal is to create the next level of personalization to unlock even more value for the people that we serve. Today, Select is the clearest proof point of how we do this, and not only does it create value for the employers that we serve, it creates business value for us. All of our Select clients have integrated benefits, medical, pharmacy, and behavioral together. What it does is it creates a compounding advantage.
As we are able to use those benefits and the data and integration that comes from it, we are able to identify and engage customers sooner to impact their health, at the end of the day, improve their outcomes and lower cost. We see that happen every single day in our integrated model. For example, customers who are integrated, they connect with our clinical support 50% more often than customers who are not. These same customers also receive behavioral healthcare 35% more often, and they are using virtual care 63% more often. For employers, there is direct value. The direct value is lower cost. There is also indirect value. That value is a healthier workforce. There are also aligned incentives in the way that we work with them.
Through our unique funding solutions, employers share in the upside with us, and this is the value creation that has led to our significant growth since our last Investor Day, 12% growth in Select. In Select, we generate approximately twice the earnings compared to its share of membership. We are going to continue to grow Select. We expect to be at 10% market share by 2030. This is a net new customer growth of nearly 800,000 individuals. The opportunity to capitalize on our differentiation extends beyond Select. Upmarket, we have made really good progress adding pharmacy benefits to our medical relationships. Our next opportunity is to add medical benefits to where we have pharmacy relationships. This represents almost 10 million pharmacy-only lives across middle market and our national accounts, and this is not reflected in our current growth expectations, so it is additional upside for us.
How do we think we can do it? There are two things that set us apart. First, we are going to win on affordability and complex care. As the prevalence of individuals with complex care goes up and the cost goes up, our integrated model becomes even more important for the clients that we serve. Leveraging our pharmacy, specialty, and behavioral assets combined into one integrated view of a customer, that gives us a competitive advantage. Second is innovation in this area. You will see we are going to invest in new services and capabilities that are going to improve the customer experience and expand our clinical impact to create even more value. Here the opportunity is really straightforward. We have strong relationships today. We are going to leverage our differentiated capabilities, and we are going to invest more here to help individuals with complex needs.
Now, I am going to go a little bit deeper into the capabilities around this behind our differentiation. This is an important slide. It is important because it outlines the interconnected capabilities that we are investing in as we go forward. First, we are going to strengthen our integrated data foundation to build an even more connected view of the patients that we serve. Second, personalization at scale through a new customer and clinical support model that we call Health Sense, which is powered by our Health Intelligence Engine. Third, we are going to build on our leadership in risk transfer expertise. We are going to do this by using our personalized data and capabilities to not only improve outcomes and affordability, but also leverage it to strengthen our underwriting and our risk management performance.
While each of these capabilities is important on its own, it is really the combination that is going to create the fuel for growth as we go forward. Next, what I am going to do is I am going to break down each one of these so you guys can get more of a picture of each of the pieces. I am going to start with integrated data. The value of our integrated model shows up in the numbers. Across our book, integrated customers save significantly more dollars than our non-integrated customers, and that value rises with complexity. For an individual with cardio diabetes, it is $2,000 per member per year. For the average specialty condition, it is $8,000, and for a cancer patient, it is $28,000 per member per year. That is because there is no standard journey for an individual with a complex condition.
Every individual we serve with a complex condition, and even those that have the same diagnosis, can require different care treatments, different settings, and they may need different support. The best care plan is one that is individualized for the person. Our integrated data gives us a connected view across the healthcare journey, and combined with our capabilities in Pharmacy Benefit Services and Specialty and Behavioural, we can deliver a more personalized, coordinated care experience for an individual. Let me give you a couple examples. For a patient with cancer, we are able to leverage our site of care capabilities to make sure that high-cost infused drugs are not only delivered clinically appropriately, but in the best setting for cost efficiency. We can connect them to our Therapeutic Resource Centers that Matt described earlier.
Or for a patient with rheumatoid arthritis, we can help improve affordability by leveraging our biosimilar capabilities through Quallent. Similarly, we can ensure that these individuals are connected to our inflammatory Therapeutic Resource Center. Because we see more of the patient's journey, we can make the right connections to make sure they get the best outcomes at the lowest cost. The next opportunity that we have is to use these insights earlier and even more precisely. This is why we are investing even more in personalization at scale. As I mentioned earlier, fragmentation is a huge barrier. It is driving much of the waste that is in our system today. We see this as a huge opportunity. It is an opportunity for us to transform the market expectation of our impact. Through Lead to One, we are building on our integrated capabilities.
We're using AI to personalize support at scale. This is why we're introducing Health Sense. Health Sense is our next generation customer and clinical support model. It is going to deliver more personalized, proactive, and continuous support across an individual's healthcare journey. Powered by our Health Intelligence Engine and embedded across our Cigna Healthcare experience, it combines data, AI, and personalized clinical support to anticipate needs, guide actions, and connect an individual to the right clinical support at the right time. We expect the impact of this work to reduce healthcare inefficiencies by 10% by 2030. Katya and Dr. Flaster are going to go deeper on these capabilities in a few moments. When we combine this work with our risk transfer capabilities, it creates even more value for the employers that we serve, and by extension, creates more value for us.
Earlier identification and better engagement leads to better outcomes and lower cost. It helps us better predict and manage risk also. The question is: why does this matter? Well, it matters because we are the industry leaders in stop loss. Our expertise has allowed us to build the industry's best risk management engine. These capabilities support a broad range of funding solutions, from our fully insured to self-insured and flexible arrangements in between. That flexibility is particularly important in our growth engine, Select, where 68% of our clients are self-funded and the market's at 30%. For clients who choose self-funded or flexible arrangements, we help them manage the risk, and we have aligned incentives. When we create value for them, they have a lower cost, and we are able to participate directly in the value that we create.
Our risk transfer expertise is not only a competitive advantage for us, but we're also using it to strengthen the position through advancements in predictive analytics. We do this by drawing on hundreds of millions of claims and our clinical interventions that we have to create a more connected and fuller picture of an individual. This is what enables the identification and the intervention that I spoke about. It is also what is allowing us to sharpen our risk management and our underwriting skills. At the end of the day, execution is what's critical to us taking advantage of the opportunities that lie in front of us. There's three particular areas of focus around execution. The first is expanding our addressable market. By expanding our addressable market, this gives us further runway for growth. We will further improve our unit cost position by another 10% by 2030.
Second is innovation. We are investing in new solutions to bring to market that will personalize individuals' care at scale and help us make that impact. Again, Katya and Dr. Flaster are going to go deeper on these capabilities in just a little bit. Third, we are leveraging technology to improve our risk transfer capabilities. Not only will that fuel the identification, the engagement, and the clinical impact, as I mentioned, we're using it to sharpen our underwriting and our risk transfer skills. Let me leave you with what matters most. A few things. First, the combination of our improved affordability position, our integrated model, and our risk transfer capabilities create a competitive advantage for us to trade off.
Second, the employer relationships that we have, and specifically the momentum in Select, will help propel us, and we think there's opportunity to continue to do that up market. And third, the execution discipline that we'll bring, particularly in areas of differentiation, is going to matter. This will help us improve our addressable market. It's going to help us strengthen our risk management capabilities, and it's going to help us personalize at scale. This is why we're confident in the commitments that we've laid out. One, delivering earnings growth of 6%-9%. Two, expanding our Select market share to 10% by 2030. And third, reducing inefficient care through a focus on the complex by 10% by 2030. Thank you all.
Please welcome Adam Kautzner.
Good morning, everyone. My name is Adam Kautzner. I am President of Evernorth Care Management and Express Scripts. I'm also Executive Vice President of Customer Personalization for The Cigna Group, and I'm excited that all of you are here with us today as we talk about our Pharmacy Benefit Services business and where we are currently today and where we're going for the future. I'm going to cover three main components today throughout the presentation. One is how we remain an essential partner around managing the growth of drug spend. Two, how we continue to innovate and lead the industry, as evidenced by our Signature Pharmacy Benefit Services model that I'll go into deep later on. And lastly, how we will continue to deliver sustainable and durable earnings that are predictable for the long term. Today, we have a mature and stable Pharmacy Benefit Services business.
We have $140 billion annually, of which $2.6 billion is earned income before taxes. We service 117 million Americans, about one-third of the entire country's population. We'll process over 2 billion prescriptions this year, and we manage a pharmacy network of over 65,000 pharmacies across the country. It's this size and scale that we have that allows us to be able to deliver on unmatched cost of goods. It also allows us to be able to continue to innovate around market-leading solutions around complex care. And lastly, it provides us with the ability to go deep with our clients from a clinical and care perspective to deliver on safety and efficacy for them. Now, it's been a couple of years since we've all been together, and during that time we've been very busy.
We've delivered on strong new sales growth, which has manifested into 30%+ revenue CAGR during the period. We've also continued to go deeper with our clients and improve those relationships, as evidenced by our client retention levels of 95% or higher. We've continued to innovate in the spaces around disease-specific therapies for patients requiring those complex care needs. GLP-1s is one great example where we've had the broadest suite of solutions in the market, and we've been able to continue to move that market as it has evolved over that time period. Lastly, our new rebate-free Signature model, which is revolutionizing the industry, delivering change that has been not seen in decades within the space. Pharmacy Benefit Services today is a $500 billion business, of which 70% is for patients that have complex conditions. Those patients require specialized care.
This is also where pharmaceutical manufacturers are continuing to focus. 75% of their pipeline spend today is for those patients that are requiring those complex conditions. What that means is that over time, we're going to continue to spend more and more on fewer and fewer patients. This is where our vision around Lead to One continues to come in. The development of our Signature model, as well as us continuing to develop disease-specific solutions that provide best-in-class outcomes for our patients and for our investments within the technology space that you'll hear more about later today. One of those is our new leading industry component around our platform, which will set new industry standards for flexibility, speed, and quality. Those areas of focus are continuing to be extremely important as you look at the continued growth within the pharmacy space.
Just a decade ago, pharmacy only accounted for about 20% of total healthcare expenditures. Today, it's 30%, and in another decade, we project it to be over 40%. Much of that is because of the specialty space and that continued focus in that area. Specialty only accounted for about 12% of total healthcare expenditures a decade ago. Today, it's about 20%, and we project it to be about 30% in another decade. This is requiring real focus, where a Pharmacy Benefit Services company can't just adjudicate claims. They have to have a much deeper understanding of the client's needs and what's happening in the market and be a strategic partner for clients and patients alike. That's where we continue to step in, and we're able to continue to successfully bend that cost curve. It's also an area that we have quite a bit of experience in.
Because if you go back a couple of decades ago, generic drugs only accounted for about 40%-50% of all prescriptions. We went to work educating providers, clients, patients on the access and affordability benefits around generic prescriptions. What that has allowed us to be able to do is use that type of playbook, where today generics account for nine out of every 10 prescriptions, and use it within the specialty space around biosimilars. Biosimilars provide an opportunity of 60% or greater savings over an originator biologic. We're utilizing that type of success with the biosimilar medications. Humira, it was the largest drug in the world. We've been able, through our work, to ensure that 85% of our eligible patients are trying that biosimilar product. Stelara, another blockbuster medication. About 75% of patients are trying that biosimilar product.
It's that type of success that we're continuing to utilize as we work through a highly evolving market. Because for the first time in decades, we're actually seeing a decline in gross rebates. Whether that's most favored nation, Inflation Reduction Act effects, or biosimilars, we're seeing gross rebates come down. That's leading to more unpredictability for our clients because they retain all or nearly all of those rebates today, and they're looking for something that works and provides them with better predictability into the long term. In fact, as we polled our clients, many of them are seeking new, innovative components for the future, and our new rebate-free model looks to deliver on that for them. Where nearly 90% of our clients are seeking better transparency, more predictability, and being able to address the emerging concerns around fiduciary responsibilities. Signature addresses those concerns. The same thing for patients.
Nearly 80% of our patients that are polled have a pretty reasonable ask. We want to know what the cost of that drug is well before we go to the pharmacy counter. This is something we're able to deliver with our new model and our Price Assure functionality, where we're delivering on new upfront discounts that are negotiated on behalf of our patients, where they can see real meaningful savings at the pharmacy counter. Before I go deep on Signature, let me talk about three areas where we continue to excel in the market. Our product solution suite, our ability to bend the cost curve from an affordability perspective, and our safety, clinical, and quality components. On our product and solution set, we have the broadest breadth and depth of solutions in the market. We're able to understand what our specific clients' needs are for their unique patient populations.
By doing so, we're able to curate solutions that provide a customized effect for exactly what they're looking for within that solution set. From an affordability perspective, we continue to apply tried and true measures from a formulary development perspective that can bend that cost curve while maintaining high levels of member satisfaction. Lastly, on the clinical quality and safety components. On every single prescription, as I mentioned, we're going to do over 2 billion prescriptions this year. We perform 18,000 safety, quality, and benefit checks nearly instantaneously to ensure that every single patient is receiving the right drug in the right amount, where and when they need it. This is what our clients and patients count on, and we deliver it millions of times every single day.
How that comes to life in terms of specific client examples, this is a large employer that recently became part of our portfolio. This was an employer that business was doing really well. They had a relatively unmanaged plan, as you can see by the level of spend, about $360 per member per month. They knew that that was unsustainable, and they were looking for real solutions to bring that cost down. But at the same time, they needed to better understand what it would do from a member affordability perspective and member satisfaction. We spent time with them understanding their specific needs for their populations, and we deployed a multitude of solutions. Not one size fits all. We went deep. We understood what are all the different components that they needed, and we deployed those types of solutions.
We cut their costs in about half, and we were able to maintain true high levels of member satisfaction. It is that type of approach that is a personalized component where Evernorth continues to excel and deliver on the market compared to where others are. It is also that type of better understanding and innovative approach that we are applying to the market with our new Signature Pharmacy Benefit Services. We launched Signature back in October of last year, but there was a lot of work a year plus in advance because we knew given the unpredictability and change that was happening in the market, there had to be a better way. We started with the consumer, understanding and addressing their pain points from an affordability perspective, and then worked back to solve the rest of stakeholder needs across the market. We launched Signature in October of last year.
Subsequently, we proactively engaged with the Federal Trade Commission and reached a successful settlement. Earlier this year, Congress passed the Consolidated Appropriations Act. It is the most far-reaching industry change that we have seen in decades. Those two items create a federal clearing event for us across that landscape. We are now moving into an execution phase. As we have been educating the market, we are going to go live for Cigna Healthcare's fully insured book next year with Signature, and then the rest of the commercial market has the opportunity to then enroll in 2028. Keep in mind, during that time as well, with the CAA going into effect, the entire market is going to have to make changes around how they procure pharmacy benefits. That provides us a real opportunity given the evolving components that are happening within the market and our ability to affect that change.
Signature has four unique components. One is specifically for the consumer. It is real, meaningful discounts in a transparent way at the pharmacy counter that we negotiate upfront. They are not retroactive. They are not retrospective or estimated. They are real discounts as we continue to redefine how we negotiate within the supply chain with manufacturers. Second, transparency. Our clients demand additional transparency. Signature delivers on unprecedented additional transparency so they can track where every dollar goes within their pharmacy benefit. Third, how our fees are structured. No longer will our fees be tied to the cost of a drug. Instead, it will be a simple, flat administrative fee tied to the value that we provide to our clients. What that delivers, sustainable, durable earnings in a predictable fashion for the long term.
If you dig a little deeper in terms of what that means from a patient perspective, patients today that are taking high-cost branded drugs will see, on average, savings at the pharmacy counter if they are in a deductible phase or if they are in a high co-insurance environment, savings of about 30%. Upfront, predictable, meaningful savings. For our clients, since we are able to continue to negotiate through redefining the supply chain with minimal to no plan design changes, we can deliver cost neutrality to our clients.
This provides them with the high level of transparency, better member satisfaction and experience, and delivering on that cost neutrality component. That is what makes our model unique and why it will be successful for the long term. In fact, Milliman just released yesterday an independent study that confirms this component around the cost neutrality components and the benefits that that provides long term. Now, we have covered quite a bit of information already today, but what I want to be able to convey is how our components from an earnings perspective are also going to change. Let's go back to that client example that we looked at earlier, the large national employer.
Today, our earnings are composed of about 54% in a simple administrative fee, and about 46% of our earnings from that client are from small components that we retain from a supply chain perspective. Tomorrow, within the Signature model, 100% of our fee or earnings is going to be from a flat administrative fee within the additional opportunity to sell in the product and solution suite that we have around new disease-specific solutions and some opportunities around shared savings. What is important is in the middle.
Our earnings today on this client, they are a little bit higher than what our average target earnings are of about 4% at 4.5%. It is 4.5% today, it will be 4.5% tomorrow within the new Signature model. Transitioning to a more predictable and durable type of solution, but it provides us with that predictability through a new simple administrative fee. We have covered a lot of ground already today, and what I have been able to talk through with you all is the benefits that our new model provides in reshaping this industry. You are not going to just have to take my word for it today. We are lucky enough today to have two of our nation's industry experts around pharmacy consultant benefits, and they are going to join us up here on stage. Please welcome AJ and Alysha to the stage.
Good morning.
Good morning. All right. Alysha Fluno is National Pharmacy Practice Leader at Marsh. Alysha spends her days consulting with employers all different sizes across the market, and educating them about assessing different types of pharmacy benefits in this highly evolving market. AJ Ally is Principal and National Pharmacy Consultant at Milliman. AJ works across many different partners within the pharmacy landscape and employers, assessing the market, this highly evolving market, and how to ensure that employers can get the most out of their pharmacy benefits. With that, why do not we jump right in? Alysha, we will start with you.
Okay.
What is the biggest pharmacy benefit challenge that you are seeing with your clients today, and challenges that they are starting to have that they are trying to solve for today, and what, if anything, has changed over the last few years?
Sure. Adam, thank you very much for inviting us to be on stage. This is an honor and a privilege. Regarding employer clients, those are the clients that Marsh serves from a pharmacy perspective. There are three main things that are top of mind for employers today. The first is affordability. They have seen over the last decade plus, probably double-digit trends in pharmacy. The last couple of years, we have now added on some significant trend that is happening on the medical side as well.
So the affordability component is becoming real for our employer clients, and they are starting to question the sustainability of them being able to afford and continue to afford high-quality benefits for their members going forward. So affordability is in the forefront of employers' minds. The next is transparency. You hit a little bit on this, but the definition of transparency changes throughout the industry. I really think, in today's world and kind of moving forward, transparency is basically table stakes at this point. Employers want to know what they are spending and where their money is going on the drugs, and the benefits that they are spending.
So they want that revenue transparency. In addition, they also want better access to their own data, reporting, those types of things. The third component that is top of mind really is just fiduciary responsibility. You all have seen it before. Nobody wants to be that next headline in the newspaper from a fiduciary perspective. So employers are very keen on making sure that every selection that they make follows their fiduciary duties to their employees. So while they have all of these components that they are managing on a day in and day out basis, employers still need simplicity. Our pharmacy, our healthcare system is very complex. They are really looking for simplicity in the benefit and then predictability in the costs.
Thank you. That is very insightful. Appreciate that. AJ, I talked to this group today about some of the additional clarity that we have around the federal landscape today, our FTC settlements. I know others have had FTC settlements. The passage of the CAA and it going into effect in a couple of years in that effect, and then the emerging change now of more and more focus around fiduciary responsibilities. How are employers thinking about the fiduciary component, and how is that influencing their decision making as they assess these new aligned models?
Thank you, Adam, and good morning, everyone. I think as you think about the pharmacy supply chain right now, it is very fragmented, and it has created a lot of point solutions, whether it is direct to consumer, direct to employer, you name it. Why is that? Transparency, I think, is a table stake today, and what is happening with all the shift in regs, there is a shift in responsibility to the ERISA plan sponsors, the employers. Today, for example, and some of you in this room can relate to it, if you try to use your pharmacy benefit, a large percent of the time, patients have to navigate to figure out where to get the lowest cost option. Sometimes it is not in their pharmacy benefit. They have to go to some other point solution, like go to RxCuBe, et cetera.
Tomorrow, with some of the changes that are happening, the employer is going to have more for their share responsibility to take on this particular responsibility where, I think, going forward, if a PBM can offer an integrated benefit where the patient does not have to go navigate for drugs that are covered or uncovered, but it is available within the benefit, regardless of whether it is covered or not, and get the lowest cost option, that is going to be a differentiated model.
Second, I think, is the aligned incentives. I like that one slide you shared where you said for every $1 in margin, you create $11 of value to the plan sponsor. We have never seen that before. I have never seen that in my career, 25 years. I think that is going to be more something that plan sponsors are going to demand and be able to prove. Having aligned incentives for both managing trend, controlling spend, is going to be a big differentiator going forward.
Thank you. Alysha, as we talk more about the new transparent models, our Evernorth Signature model that we recently released, what's the general interest level from a client perspective in these new models?
I'm going to say clients are curious. They are interested in exploring new and different ways. There's been a lot of involvement over the last couple of years with some of the smaller, newer niche PBMs coming to market and bringing their PMPM models or trend guarantee models forward. We've seen some movement in the market. This is a pivotal time because now we have what we consider as being a large PBM kind of leaning into that type of a model. You're going to be able to do things that some of these smaller, different PBMs aren't able to do because of the assets within the enterprise that you can bring forward.
You bring a lot of scale and market presence that we have not seen before. I say employers are curious. I'm going to also expand it to say we are beyond that first mover phase. We're really in the fast followers now. I think bringing your new Signature model to market is perfect timing to kind of catch some of that wind that's been happening.
Right. I think that level of curiosity is where employers, clients of all different labor unions, health plans, there are different levels of that change curve. As the CAA goes into effect in a couple of years, how that change happens and where we have to meet those clients is going to be important. I know for us, even though Signature is our standard model, we're going to remain flexible in the market and have rebate models as well that are CAA compliant too, because we'll have to meet them in different areas as we transition over those next few years.
Yep. As AJ said just a minute ago, employers like the fact that the incentives of the PBM and the employer are aligned. In a PMPM model, it is in your best interest to drive to lowest net cost and to get members on the right care to eliminate some of the waste that is happening in the system today. Employers are excited about that.
AJ, to Alysha's point on different models now that are emerging, how would you compare and contrast the new models that are on the market?
That is a loaded question. The reality, though, the PBM models, the various transparency models, have been evolving in the last 10 years. But I think it is important to recognize what is new and what is not new. Models like pass-through pricing, cost-plus, acquisition cost-plus, point-of-sale rebates, those are not new. PMPM guarantees, where the PBM put a guarantee on the cap of spend for a plan sponsor, that is also not new. But I would have to admit, the rebate-free model, where the manufacturer passes the value at the point of sale of the pharmacy counter, that is new. In fact, you referenced the Milliman study. I was part of that. It was an independent study that we did, and we compared point-of-sale rebates to the rebate-free model because there is a confusion around the two in the market.
What we found was that the plan sponsor actually benefit from the time value of money. All of you in this room are expert in time value of money over me, myself. What was interesting was that this time value of money, the average plan sponsor, for example, a high deductible health plan, the time value of money was about $1.25 per member per month. That is real dollars. This assume all that remain the same. Drug spend remain the same, plan design remain the same, pricing remain the same. This is true, the time value of money, just by floating that cash float up front to create the value for both the plan sponsor and the member. It was assuming a 7.5% interest rate. For those who are interested in how we came up with that, you are welcome to read the report.
The plan sponsor basically are benefiting from this cash flow to where because they're paying less, if you think about how benefits are paid today, they're paying less earlier in the financial cycle. They benefit both the member and the patient, which is the patient and the plan sponsor. I think this was a big aha for me, because we have never, as consultants, measured time value of money in anything when we evaluate pharmacy benefit.
We talk about it, but we never measure it.
We talk about it, but we never measured it. But yeah, I think, the market is moving where it'll be interesting to see how these various transparency models, including the new one that Evernorth is launching, how it'll impact patients and plan sponsor going forward, and how it'll change the way benefits are going to be evaluated by consultants, and decisions are going to be made in terms of how business are placed. Because there will have to be a lot of changes in that whole process.
Right. In your study, although there is cost neutrality, then you pick up the time value money piece, which I think you quantified too.
Yes.
Which is meaningful for employers. Alysha,
Do you mind if I add to that-
Sure.
a little bit, though? I think there is more than just the rebate-free that is unique in the model that you are bringing forward to the market. As I said, we have seen PMPMs before, but for some of these niche PBMs that are in the market, what is different is the acquisition cost basis that you are bringing forward at the three different dispensing channels, if you will, right? Mail order and specialty to assets that your enterprise owns. That is something that other PBMs in the market, outside of really the big three, can not really bring to market because they do not own those same assets.
So you are going to have an advantage, I think, over some of those opportunities and other PBMs in the market because you can bring that scale in a different way. I also think it is unique the way that you are recontracting with retail pharmacies as well to provide better reimbursement for when members are at the pharmacy counter and picking up their medications. I think that that is a differentiator as well in the marketplace.
Agree. Then we are transitioning from rebate economics into transparent administrative fees and-
Yep.
how are employers, Alysha, reassessing what that will mean in terms of comparing and contrasting the different payment models?
Yep. I think we are all actually adjusting to this, not just the employers. I think it is fair to say that the economics for the business are changing. They are fundamentally changing from multiple different revenue streams, many of them hidden in the PBM industry, where we have not seen those revenue streams before. The revenue is changing from that to a more transparent, upfront, no undisclosed revenue model. In that type of a scenario, we need to be open to the fact that administrative fees are the only area where a PBM is actually making revenue. So those administrative fees are going to feel very different. You just heard Matt in his presentation earlier talking about the clean, sterile rooms, and they are adding a fifth one and all of that, and the cost that goes into just even being able to maintain and deliver medications to patients.
There is a cost to that business, and you guys have to run that business. Now instead of that being hidden behind claims and being afforded through different spread pricing models, that is now being pulled front in an admin fee, which will be fully disclosed. We need to be comfortable with the fact that these admin fees are going to be much higher than what we have seen in the market.
But as we are doing our work, as consultants are doing their work and kind of looking at total cost to administer a benefit, those admin fees will be neutralized by the offset of the good things that you are doing on a drug cost perspective, and the ability to bring rebates forward and provide more affordability that way. I am excited for some of this to come forward. But yes, it is a shift in mentality on the admin fees.
Thank you. All right, final question. Crystal ball time. Five years from now, as we look at the different models that are out there, what are some characteristics that you think the winning pharmacy benefit models will have when we get out to 2031? AJ, we'll start with you.
Okay. If I had to pick three characteristics, the first one would be around operational efficiency. So scale and size would matter, both in terms of delivering value as well as the administrative fee that comes with that. So operational efficiency, and then, of course, the application of AI to reduce the cost to administer the benefit. Very important. The second, I think is the most important one, is the ability to manage spend and trend across the pharmacy and medical benefit, especially for high-cost specialty drugs. That is going to be a key differentiator because you said it on your slide, today, pharmacy spend is around 30% of the healthcare dollar across pharmacy and medical benefit. It's going to go to north of 40% within 10 years. So the ability to manage drug spend, high-cost drug spend across both pharmacy and medical is going to be super important.
So trend management and clinical management are going to be a critical characteristic. The last one, I would say, is the ability for the PBM to create value. Now, what does that mean? Depending upon who the plan sponsor is, whether it's a health plan or an employer, value could mean financial value, it could mean member experience value, or clinical value, respectively. So I think the PBM who can create value based on the stakeholder they're serving, depends on who that client is going to be critical for success.
Yep.
Alysha?
I would say I agree with that wholeheartedly, AJ. And I would just add, what's old is new again, right? So 10 years ago, we were all worried about the cost and trends that hepatitis C medications were bringing into the market, and how could we sustain those costs. We got over it. Today, I can't believe we have had a pharmacy conversation and haven't said this yet, but right today, employers are really struggling with the cost around GLP-1 medications, and what that is doing to plan spend as well. We're going to get through that as well. When I look forward five years from now, what's in the pipeline, what's coming, it's these multimillion-dollar gene and cellular therapy drugs that right now we talk about them as a lightning strike, and don't worry, stop loss will take care of it.
It's not going to be that way in five years. These are going to be chronic maintenance medications that patients might be on longer term, or even more expensive multimillion-dollar therapies that hopefully are curative for patients. So we need to lean into, as AJ said, managing across the benefits, pharmacy and medical, but really starting to look forward to how do we do benefits differently going forward with an eye on those that are really high cost.
I want to thank both of you again for being here today and sharing your insights. I know this group, I'm sure, has found this really, really helpful as we embark on an exciting time in the pharmacy benefit space. So thank you.
Yep.
Thank you for inviting us. Thank you. Appreciate it.
All right. In closing today, around our Pharmacy Benefit Services business, we at Express Scripts continue to be an essential partner in managing the growth of drug spend for our clients in this highly evolving market. This is an area where through Evernorth, we continue to excel and lean in with our clients. Second, we are leading the market from an innovation perspective. You just heard that from two of our leading experts in the country as well. Through our Signature Pharmacy Benefit Services, we will continue to set new industry standards around transparency, accessibility, and customer affordability. What that will deliver is durable and sustainable earnings in a predictable way for the long term. It is based off of those statements that we can make three commitments to you here today. One, we will deliver up to 4% earnings growth year-over-year through 2030.
That earnings growth will ramp over time. We are in a highly dynamic market today as the rebate market is transitioning, and as we ramp through 2030 up to that 4% from an earnings perspective. Second, we will continue to have high client retention of 95% or higher while delivering on strong, profitable new sales growth. Three, by the end of 2028, we will have enrolled at least 50% of our members into Signature models. I want to thank you for your time today.
We are going to pause for a short break. Our next session will begin in 15 minutes.
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Please take your seats and silence all electronic devices. Our program is about to begin. Please welcome Katya Andresen.
Thank you, and welcome back. I am Katya Andresen, and I am the Chief Data, Digital, and AI Officer at The Cigna Group. I have spent my career working at the intersection of technology and experience in healthcare, but also in other industries, including consumer banking. One thing I have learned is that powerful technology eventually ends up in the hands of everyone. The real question is not what are we doing with technology, it is how are we leveraging technology, and now including AI, in ways that create measurable value. What you are going to hear from me today is an outcome story more than an AI story. Throughout the morning, you have heard how we are making healthcare more affordable and personalized, especially for those with complex needs. My role today is to explain how data and AI support those outcomes. We will cover three things today.
First, how we are already creating measurable value now across our businesses and for our customers. Second, I will talk about how our Health Intelligence Engine accelerates that value in a way that compounds. Third, I will talk about where we are focused because we have durable advantage, and where we partner to move faster or more efficiently. Let us start with our approach to creating value now. We do not start with a question of what to do with AI. We always start with the question, what meaningful problem in our businesses or in healthcare writ large can be solved in ways it could not be solved before because of advances in AI? We reimagine whole domains of our work through that perspective. We measure impact, and we only scale what works. That disciplined approach has yielded significant value for both efficiency and experience.
All the while, every step of the way, we are reusing capabilities and we are amassing a body of intelligence that is growing larger. That means each subsequent solution is cheaper, faster, more precise, and more effective. I want to show you some examples of that. In Cigna Healthcare, we are using AI to answer customer questions quickly in a personalized way in digital channels. This means people do not have to pick up the phone and call us. That has resulted in a 20% decrease in phone calls per customer over the last couple of years. In MDLIVE, which is Evernorth's virtual care provider, we are using AI for clinical documentation. That has taken the time that clinicians have to spend on note-taking down by up to 90%.
In Pharmacy Benefit Services, we are using AI in our specialty benefit review process, taking that down from 15 minutes to 21 seconds, which is 43 times faster. Now we are turning to the great opportunity Brian talked about in complex care, and I want to make that concrete. Let us think about someone with complex needs. They have multiple conditions, multiple therapies. They have multiple providers and benefits, and that creates a very scattered set of snapshots. A prescription over here, a clinical event over there, a claim somewhere else. How do we take that scattered picture and turn it into a picture that allows us to create meaningful outcomes for those people? Our answer is our Health Intelligence Engine. I want to describe how that works. There are sort of three groups of capabilities that are part of the engine. The first thing is what we know.
Think of this as capabilities around our integrated data across medical, pharmacy, specialty, behavioral health. Then there is what we can predict. That is our proprietary models, as well as our ability to identify the right personalized recommendation, leveraging our clinical expertise, which you will be hearing more about from Dr. Flaster. Third, there is leveraging what we know and what we predict to find out the right best thing for what we should do, and then taking that action. So what we know, what we predict, what we do. One more point I want to make here, which is what we learn. Because this is happening across millions and millions of customer touchpoints. That means that every time we learn something, we know more, and that makes our next solution more effective and powerful. We have been building these capabilities for years.
At The Cigna Group, across the enterprise, we have over 700 patents, and my team filed a machine learning patent back in 2014, long before we were all talking about AI all the time. Do not think of this as a new platform. It is not. What is new is what recent advances in AI, including agentic capabilities do for this model. It supercharges it. We know far more, we can predict with greater precision at greater scale, and we can do more, and we can learn faster than ever before. Here is what that means for our results, especially for those with complex needs. So first example. In Cigna Healthcare, we are able to significantly reduce inpatient and ER department visits that are avoidable. In specialty pharmacy, as you heard from Matt earlier, time to therapy is doubled. Twice as fast.
For a complex patient, getting on care faster means everything. In Cigna Healthcare, our virtual agents are solving over 70% of customer needs in digital channels and, very exciting, our care managers now can act with the precision and personalization that helps engaged customers have $2,000 a year less in medical costs. All of these are very powerful on their own as this engine becomes supercharged. What is equally powerful, I want to emphasize again, is the learning loop that this creates, and value is compounding in three ways for us. First, in business performance. Second, value is compounding in our delivery economics with every new solution. And third, growing commercial value, both for our existing offerings and the new offerings that are now possible. This is the most important slide you will see from me, so I want to make another really important point about it.
That is that the more complex the healthcare journey, the more valuable this thesis. Others may have AI, they do not have our context, and they do not have years of learning what works for whom under what circumstances. Moreover, having done all of that with built-in guardrails around models and agents and human accountability. We also know in the space it is important to move fast. We do not believe in building every capability ourselves. We invest where the advantages must be ours. Think of that as my list. What we know, what we predict, what we do, what we learn. We partner where technology companies that have specialized expertise can help us move much faster. A great example of that is our partnership with Sierra AI.
Sierra is a leader in conversational AI and agentic servicing, and they have helped us move very swiftly in our voice channels such that we can answer any customer inquiry in a natural conversation in the most personalized way based on our health intelligence that has ever been possible before. Today, we have invited the Co-Founder and CEO of Sierra to be with us today, Bret Taylor. A word about Bret. He has been behind some of the biggest technology innovations I am sure you are familiar with, including creating Google Maps. He was CTO of Facebook, Co-CEO of Salesforce, and now Chairman of the Board of OpenAI. I am delighted to welcome Bret to the stage. Bret, thank you so much for being with us today.
Thank you for having me, and thank you for our partnership.
Yes. I am going to jump right in about our partnership. I wondered if we could start out talking a little bit about, you work across a lot of industries. Healthcare is very special. What are you learning about healthcare, and what have you learned from the partnership that we have?
Well, I think healthcare probably, I think has the highest potential for a positive impact with this current generation of AI. You have probably forgotten more about healthcare than I will ever know, but we spend about 18% of our GDP on healthcare in this country. It is one of the few industries that has gotten less productive over the past decade. Whether if you look at the shortage of pharmacists, to registered nurses, to doctors, to the administrative costs, I think that there is so many applications for this technology that can go directly to the benefit of members, and I think that is what has always drawn me to Cigna, is you are focused on the member first. I think the thing that has been most exciting in our partnership has been the application of voice.
If you think about what it means to create digital experiences, in the dark ages of three years ago, that meant a website or a mobile app. With voice AI, we have essentially digitized the last remaining analog channel, which is the telephone, and the telephone is incredibly important in the healthcare industry, whether it is outbound calling to partners or inbound calling from members. It is remarkable how well this technology can work. You have mentioned some of our partnership, the Accredo AI agent is autonomously handling over 40% of calls. These are basically members. It is better, faster, and cheaper right now. Essentially, the benefits are to everybody, the member, to you, to the bottom line. I think, thinking of as Maslow's hierarchy of needs, first find shelter.
Let us take the billions of phone calls in the healthcare industry that could be automated and apply it there, and then I know a lot of our conversation will go to the longer horizon of this technology where we can really help to drive outcomes for Cigna members, particularly for these complex cases, which I think are people who are most vulnerable and most in need and can most benefit from this technology.
That's great. I share your enthusiasm for voice, obviously. I think it's incredibly important in healthcare. It is still early innings for voice in the AI space. I think it'd be really interesting to hear your perspective on where it's going, and then what that means for advantages for our partnership in the future.
Well, I think it was really captured by the slide you just presented, actually. I'll take a step back. As AI models become more capable, we've gone from reasoning about a single decision to thinking about how do you actually orchestrate a longer horizon engagement. If you think about a Cigna member, with complex care needs, it's a perfect example of this. It goes from how do you digitize a phone call to can you actually orchestrate a member journey to drive towards an outcome? Think things like prescription drug adherence or almost creating a digital health advocate for each member. If you think about the cost of the high end of the healthcare market where you can actually have concierge doctors and health advocates.
With AI, we can digitize that, and we can provide that exclusive service in a much broader way and actually drive outcomes that just weren't possible before. In particular, if you think about some of the complex care scenarios you're focused on, it's something that is only possible with AI to do in a cost-effective way. I think about outbound engagements, AI not just reaching out to you, but deciding to reach out to you, where everyone's journey is different. I think about automating some of the relationships with partners, if you think about the complex supply chain of healthcare. What I loved about the way you presented it, we have a saying at Sierra, which is, "Rent the intelligence, own the context." I think over time, AI will be broadly available in the healthcare industry.
You can't really differentiate on intelligence by itself, but what you can is have more context about your members and use that to make more intelligent decisions about how to engage with them and drive those outcomes. I think both because of your portfolio of companies and services and how far ahead you are on AI, I think you're going to start compounding some of that context advantage over time. Selfishly, as an AI person, I think we'll be able to see the impact of the technology faster with you than almost anyone else, which is such a privilege.
For us, too. I would like to follow up on something you just said. I agree, we are in a stage now where we can do inbound, we are doing outbound as well in certain parts of our business, but what really matters is that connected journey. We believe that is the place we really want to be ahead of the game, as you said. Can you talk a little bit about Sierra's plans around agentic harnesses or the ability to connect these journeys, no matter what modality someone is in or wherever they are in their journey?
Yeah, the spirit of renting intelligence only in the context is how important the context is. To some degree, that universal profile of me and who I am is the most valuable thing. No matter how advanced GPT-28 is, it will not know what you know about me as a member of Cigna. That context about me is actually the most important thing to derive value from this, what will become super intelligence, may already be super intelligence in the future. What is interesting about the essentially making AI agents your digital front door for that connected member journey is that every interaction I have with AI adds to that context. If you think about it, how many conversations over the phone, what do you log in the computer system?
Well now, if you are having a conversation with an agent, whether it is over the phone or a digital voice experience or a digital chat experience, all of those memories are actually a part of my unified profile. Essentially, the more you lean into AI as your digital front door, the deeper your context moat becomes. More importantly for a Cigna member, the more intelligence you will have about how to drive me towards that outcome, to help me in particular, I am way out of my depth here, but for some of the sort of complex therapies, just even the act of taking them correctly can really drive outcomes. To actually have as much context as possible to drive those outcomes, I think is an incredible opportunity.
I've obviously sort of biased in this assessment, but I think the more companies lean into AI as their digital front door, the more their AI will actually perform better. I think it's also why I think you all leaning in to move more quickly than many of your peers is so important because you're getting those lessons faster than anyone else.
Yeah. Thank you for really underlying the compounding value that we're seeing here, because this engine and the interactions with agents create more and more data, and that makes the whole thing more and more valuable and great for outcomes. Okay, speed round. Quick question for you. A skeptical investor might say, "Everyone has access to AI. No, really, where is the sustainable advantage?" You've talked about context, but can you put a finer point on that?
Yeah. If you think about it, I'll just give you an anecdote. I just added my 16-year-old daughter to our car insurance, which cost me an arm and a leg. In that conversation, I mentioned, jokingly, that I have a 15-year-old son and I'll be calling them next year, which is true. Because I'm in my line of work, I wondered, I bet that's not being recorded anywhere, and I just gave them an opportunity to reengage me and upsell me. I even gave them the date to reach out to me. I think that's an exact example of the type of context you get from, I'll say, the more unstructured conversations that come through these digital interactions. There's millions of these, and they're not inconsequential. I think calculating data in the abstract doesn't actually give it the value that it is.
And if you think about someone talking about the trouble they are having to go see a specialty provider, maybe trouble with a medication, maybe they alluded to something that is actually an important side effect of a medication, but they did not know it was important. All of those things are available when you have a digital front door that is an agent. I think the important thing that you will have by leaning into this faster than others is you are starting to develop that advantage sooner. Because it compounds, the earlier you start to develop those memories and that context, the more your advantage will compound relative to your peers. I really think this is, especially in healthcare, I think this is incredibly important. Also true of a property and casualty insurance company as well.
Well said.
Yeah.
Thank you, Bret, so much. As you said at the outset, I appreciate you being here, but above all, our partnership.
Thank you very much.
Thank you.
I appreciate it.
Thanks for being here. I am going to wrap here with three takeaways reinforcing what you heard from me today. First, we are creating meaningful value with AI now. Second, our Health Intelligence Engine is allowing us to compound that value. And third, we are building where we differentiate, and we are partnering to accelerate, as you just heard from Bret Taylor. Always with guardrails and safety and human accountability in mind. I started my talk today by saying that AI is just technology, and I will leave you with that point because that is what really matters. It is that context is how we achieve the vision you heard today. For us, that is health intelligence, which makes complex care more personalized, more effective, and more affordable. Thank you.
Please welcome Dr. Amy Flaster.
Thank you, Katya. Thanks everyone for being with us today. My name is Dr. Amy Flaster, and I am the Chief Medical Officer of The Cigna Group. In addition to serving as the CMO, however, I am also a practicing primary care physician. Every Friday morning, I go to my clinical office in Boston, where I take care of 350 adult patients. Every clinic session is different. I may be taking care of healthy patients seeking preventive care. I may be supporting people with chronic diseases. Often, I am supporting patients who have a new complex or specialty diagnosis as they begin to navigate their journey. It is this experience as a practicing doctor that gives me a first-hand view into how our healthcare system today is working for patients and providers, where it is working well, and where there continue to be gaps and fragmentation.
As you have heard throughout the morning from my colleagues, we are at an inflection point, and the healthcare marketplace is demanding more. More personalization, more affordability, and a more seamless experience. This is why I am so excited to share with you all today how our clinical capabilities uniquely position us to meet that demand and create differentiated value. To that end, there are three areas of clinical advantage that I am going to focus on today. The first is the breadth and depth of our clinical enterprise, with assets and capabilities that give us industry-leading scale and expertise to support complex patients.
The second is the power of integration of those assets with our data. That unlocks precision insights, which allows us to provide better clinical outcomes and affordability. Third, I am going to talk about how AI is creating a paradigm shift in clinical, allowing us to identify needs earlier, extend personalized support, and improve outcomes for our patients at scale. Let me take a step back and begin by grounding you in where we stand today. We have built one of the broadest and deepest clinical ecosystems in healthcare, spanning our assets and capabilities that are in medical, in pharmacy, in specialty, in behavioral health, and in our case management programs. Taken together, these capabilities allow us to support over 180 million customer interactions every year. We are fueled by the work and support and care provided by 5,500 clinicians.
These are doctors, nurses, pharmacists, and social workers that support our patients every day, including, as Matt mentioned, 850 field-based nurses that provide boots on the ground support. We have 24/7 availability of nurses and pharmacists to our members, and we conduct over 2 million visits a year through MDLIVE. It is this scale that has enabled us to develop differentiated expertise in complex patients. Let me share three examples to bring this to life. Our transplant case management program in Cigna Healthcare supports members that are going to receive a solid organ transplant. This is one of the most complex clinical journeys a person can undergo, and for the 6,000 members that are supported by this program each year and have our services wrapped around them, we see a reduction in the cost of care for each case of $87,000.
A second example, Matt Perlberg earlier spoke to you about our TRCs, our Therapeutic Resource Centers. You can think of these as specialty hubs of expertise, each focused on a different disease area. To highlight one, our rheumatoid arthritis and inflammatory TRC, when supporting patients and wrapping nursing and pharmacy supports around them, has been shown to reduce inpatient admissions by 22% and overall medical costs by 8% by virtue of being supported with the TRC compared to non-specialty care. A third one to highlight, earlier Adam talked about the depth of our clinical services in our PBS business. Our SafeGuardRx capability, which combines specialized clinical programs with value-based purchasing, has been shown to increase medication adherence by 14.5% for people with chronic diseases. Each of the programs and capabilities that I just described is impactful in its own right.
But where there is integration across our enterprise is where we can derive the most clinical value for patients. Oncology is one compelling example of how this comes together. By leveraging our existing early cancer identification and engagement capabilities, we are able to engage people with breast, colorectal, and lung cancer weeks and months earlier than we otherwise would be able to do. This earlier engagement is incredibly valuable, both clinically and financially. It gives us the opportunity to coordinate, support, and case manage these patients before fragmentation, avoidable utilization, and costs surface. The results you can see underscore this impact. When oncology patients are fully supported by our integrated model across our enterprise, we see a reduction of $28,000 per member per year in their cost of care.
To put a finer point on this, our earlier insights drive earlier action, and that earlier action drives better outcomes, both clinical and in terms of affordability. Now I am going to shift and talk a little bit about what comes next in our clinical model. I will say as CMO, as a practicing doc, and as a patient like all of you, this is where it starts to get really exciting. I have just walked you through what we have built. We have over a decade of building one of the most deep and broad clinical enterprises in the industry. But today, AI creates a paradigm-shifting opportunity in our clinical model. To take a step back for context around where clinical AI stands today, you can see a spectrum on the slide.
On the left side of the spectrum, you can think of using clinical AI for administrative and back-office functions for more efficiency. This has become table stakes. On the right side of the spectrum are organizations using AI to support autonomous care. This is things like triage, diagnosis, and even prescribing. This is still untested and very much early stage. Where we believe the greatest area of value capture exists is right in the middle of this spectrum, where we believe clinical AI can revolutionize patient support and navigation. This is where we are leaning in.
Powered by our Health Intelligence Engine that Katya just talked to you about, we are investing in the next generation of our clinical model, leveraging clinical AI to personalize care guidance and support for the most complex patients in service of Lead to One. To this end, last week, we were really excited to announce a collaboration between The Cigna Group and OpenAI, aimed at supercharging our work in clinical AI. We are combining The Cigna Group's strengths in caring for complex patients, our clinical programs and assets, and our proprietary data with OpenAI's frontier AI capabilities and their consumer focus to enhance the support that we can offer to patients with complex conditions.
We have decided to start with oncology. Our two initial use cases are already underway, both of which are or will be embedded in our existing Accredo and Cigna Healthcare offerings. In Accredo, a group of oncology nurses today are already using the Accredo Clinical Assistant tool, leveraging AI-enabled summaries of a patient's care journey before engaging the patient to improve personalization, quality of follow-up, efficiency, and experience. In Cigna Healthcare, HealthSense is the name of our next-generation personalized health experience. This tool allows us to support patients throughout their care journey and in between doctor's visits. It puts clinical expertise at the center and leverages data to identify needs earlier and connect patients to the right support.
Before I show you the tool, a hard line I want to emphasize. We use AI to augment, but never to replace clinical expertise. Our clinical judgment remains with our clinicians and is supported by our clinical AI governance, our quality and safety protocols, and our evidence-based medicine tools. With that said, I am now pleased to show you how HealthSense looks and feels, and how it is translating our clinical expertise, our integrated data, and our AI capabilities into a new and novel experience for patients dealing with the most complex conditions.
We will center this demo around Maya Jones. Maya is a Cigna Healthcare patient. She is a 59-year-old mother of two. She works full time. She is a caregiver for her aging parent. Maya recently received a life-changing diagnosis of colon cancer, and she is starting her first chemo cycle of capecitabine and oxaliplatin. Short form for that is CAPOX. Maya provided consent to use the HealthSense tool to help her through her journey. This tool, HealthSense, is able to use longitudinal insights and data about the patient, including her age, her gender, and information about her kidney function, to identify that she has a high likelihood of post-treatment side effects. So once Maya starts her chemo, HealthSense proactively reaches out and checks in on her before she identifies any needs. Let's take a look.
As Maya engages with HealthSense, either through ambient listening or directly through the chat function, the tool is accurately recording her concerns and symptoms, providing support, and using the information to build an evolving view of Maya's health journey, suggesting resources and education specific to her. Partway through her treatment journey, Maya is concerned about a symptom that she is experiencing. HealthSense identifies the need for additional support and offers Maya the option to connect with a Cigna nurse at no cost and in real-time, and provides the nurse with relevant context for Maya's care journey. Throughout Maya's chemo cycle, HealthSense is checking in with her regularly, providing personalized care and guidance to help Maya through this journey. Four months later, as treatment is wrapping up, HealthSense continues to serve as Maya's partner, guiding her each step of the way.
As you can see, clinical AI represents a significant paradigm shift that we can leverage to improve outcomes, enhance experience, and lower cost of care. We believe that we at The Cigna Group are uniquely positioned to realize that value at scale. As I wrap up, I would like to leave you with three takeaways. The first is that our clinical enterprise is built for patients with complex conditions, and we have the breadth and depth of capabilities to support them through their care journeys end to end.
The second is that our connected capabilities, data, and insights, and the integration between them allow us to drive better outcomes, greater value, and a lower cost of care. Third, as you saw, we are leveraging AI across our businesses to achieve earlier clinical interventions and provide more personalized support at scale. We are really excited about the next chapter of clinical at Cigna. Thank you.
Please welcome Ann Dennison.
Good morning. Thank you all for being here with us today. I am Ann Dennison, Chief Financial Officer of The Cigna Group, and I am excited to be here this morning to talk to you about our deliberately shaped portfolio of three scaled businesses that are going to drive value for consumers, clients, patients, and shareholders.
Over the next roughly 20 minutes or so, I am going to cover four key themes. One, how we are building on a proven track record of disciplined execution and differentiated growth. Two, how the pillars that you heard about today, our core growth opportunities and our distinct capabilities, are going to drive sustainable long-term growth. Three, how we are launching a $3 billion multi-year productivity and efficiency initiative, a savings initiative to reduce costs and also to be able to invest back in the business. And finally, how our strong cash flow and our disciplined approach to capital deployment is going to support profitable growth and returns. With that, this morning, we reaffirmed our full year 2026 adjusted EPS guidance of at least $30.45, along with some other metrics you can see on the right-hand side of the slides. Our excitement is built on a strong foundation.
With the $30.45 for 2026, at least $30.45, we will have achieved a 14% CAGR over the last decade. And within the last decade, we will have grown in every single year of the decade. That is truly unique and differentiated in our sector and peer set. We recognize that recent years have been dynamic and have been challenging, and we have work to do to get back into our long-term growth algorithm. But I want to point out what you can see on the right-hand side of this slide, which is from 2021 to 2026, we grew at the highest rate in our peer set with the lowest amount of volatility. This looks similar if you do it over a 10-year period. And I think what this demonstrates is the resilience of our portfolio, our ability to adapt, and how we are creating sustainable long-term value.
This performance has translated into very strong cash flow. From 2021 to 2025, so that five-year period, we generated $56 billion of cash flow from operations and from divestitures. We have consistently taken a disciplined approach to allocating that capital, balancing investments back in the business with returns to shareholders. And so over this period, over that same five-year period, we returned $36 billion or 64%, excuse me, of that cash to shareholders in the form of dividends and share repurchases. While at the same time, we continue to invest in the business in order to drive organic growth and enhance our strategic capabilities. As you heard from Brian Evanko this morning, we have deliberately shaped our portfolio of investments and businesses over the last near decade into three scaled growth businesses. Cigna Healthcare represents 40% of the overall enterprise earnings, while Evernorth is 60%.
But within Evernorth, Specialty and Care is now 37% of overall enterprise earnings versus two years ago, it was at 30%, and Pharmacy Benefit Services is 23% of overall enterprise earnings. Each business has distinct growth drivers and capabilities, and we have created a balanced portfolio that is going to drive sustainable long-term growth. Let us talk about why we believe that is true. Our portfolio of businesses is positioned where healthcare costs are concentrating. You heard this throughout the morning. You heard from Adam Kautzner how drug spend is becoming a bigger and bigger portion of healthcare spending. We are a market leader with scale, purchasing power, and the ability to drive unit costs lower and deliver for our clients in that business. You heard from Matt Perlberg on Specialty and Care, how specialty medications are becoming a bigger and bigger portion of overall drug spending.
We are a market leader in Specialty and Care with differentiated end-to-end capabilities that drive outcomes for patients, as you heard today, and better outcomes for our clients. You heard from Bryan Holgerson about how costs are concentrating in a relatively small number of patients with the most complex conditions, and how we as a business are designed to serve those patients through our integrated model and drive better outcomes and affordability for our clients. Altogether, the combination of our businesses, we are improving affordability, we are driving better outcomes, and importantly, we are driving sustainable long-term growth. This is why we are confident in our ability to deliver long-term annual adjusted EPS growth in the 10%-14% range through 2040. Our pillars of growth, our distinct capabilities, and our disciplined execution. I am going to walk you through how we are going to deliver on that commitment.
I will start with Evernorth. Evernorth again represents 60% of enterprise earnings. An increasing portion of this business is shifting towards Specialty and Care, which is our highest growth opportunity business. As a result, we are confident in reaffirming Evernorth's long-term earnings growth algorithm of 5%-8% through 2030. Let me break that down into the two businesses and talk a little bit about each of those. First, I will start with Specialty and Care. Again, 37% of overall enterprise earnings, higher growth business, large TAM, secular tailwinds, growing at high single digits. The TAM, you heard Matt talk about that earlier. Differentiated end-to-end capabilities. All of those things make us confident in reaffirming our 8%-12% growth algorithm on Specialty and Care.
If I break that down, 7%-9% of that is what we think about as core growth, and you can think of that as aligned to the secular tailwinds. The other 1%-3% of that is our differentiated capabilities, our opportunities to increase share, and to take more of the TAM, particularly in the medical benefits space. Now let us turn to Pharmacy Benefit Services. Pharmacy Benefit Services represents 23% of overall enterprise earnings. We are a market leader. We are driving innovation. We are driving affordability. The business and the industry is in transition given the evolving regulatory landscape. But we are on the front foot of that, innovating with our new Signature product. We do have some near-term headwinds, but we are confident in the outlook that we have of flat to 4% through 2030.
We are confident that we are creating a durable earnings profile that will be fee-based and predictable. Our updated margin for the Evernorth segment is 3%-3.5%, and I just want to point out that this update reflects the dynamics that we have been talking about around the three large clients in our renewals and extensions. That is what is reflected in the update as it relates to the Evernorth margins. To recap, we are confident in driving 5%-8% long-term growth across the Evernorth segment. I will move on to Cigna Healthcare. Shifting to Cigna Healthcare, 40% of our total enterprise earnings. We see substantial growth opportunities. You heard Bryan Holgerson talk through the dynamics there, the opportunities that are afforded to us through our integrated offerings. We see opportunities to grow in Select, but also to expand our positioning in middle markets and national.
Our integrated data, our personalized care capabilities, our risk management expertise all reduce inefficiency across the broader healthcare industry and help meet our client needs. With that, we expect average annual compounded earnings growth for Cigna Healthcare to be 6%-9% through 2030. If I break that down, 4%-6% of that is core growth, and again, you could think about that as growing in line with the market. The other 2%-3% of that is growth from our distinct capabilities. So our opportunities to increase our share in the Select segment, our opportunities to continue to recapture margin as it relates to stop loss, and then our international business. Our international business represents just over 10% of the overall Cigna Healthcare earnings number, and that business is growing in the high single digits.
For Cigna Healthcare, we expect long-term margins to be in the 10.5%-11.5% range. That is consistent with our prior target. Further bolstering our confidence in our ability to deliver on our growth outlook is our $3 billion multi-year modernization and productivity initiative. If you read any news articles that came out this morning that said that this was a spending initiative, this is a savings initiative. We intend to drive productivity and efficiency from 2026 through 2030 of $3 billion. The three areas we're going to focus on within this program are, one, automating our workflows. Finding opportunities to use AI or use technology or re-engineer workflows. So that's one category. The second category is around talent, so building a future-ready workforce for the most efficient and effective talent base. Then third is optimization of our supplier, partner, and vendor landscape.
As Katya noted earlier, technology and AI will accelerate these efforts. It will help improve productivity, lower our cost to serve, create operating leverage, and provide additional capacity for us to invest in growth opportunities. In a moment, I'm going to talk about how much growth we're expecting from capital deployment. Before I do that, I just want to spend a moment to talk about our capital deployment strategy and our philosophy. So I'll start with growth. We believe our best investment that we can make is in ourselves. We are committed to a sustainable dividend. We're at about a 20% ratio and a 2% yield currently. We believe share repurchases are a highly attractive use of capital given our current valuation, and we have a little over $6 billion remaining under authorization today.
We are strengthening our balance sheet, and we expect to be at our target of approximately 40% debt to cap by the end of this year, 2026. Then lastly, M&A. Bolt-ons remain our focus, but our criteria for M&A has not changed. Any M&A that we look at has to be strategically aligned and financially attractive. So what does strategically aligned mean? To us, that is, it has to expand our reach or enhance our capabilities. Financially attractive, for us, that means it needs to deliver EPS accretion that is durable and visible to us and a strong return on invested capital. Importantly, our portfolio is strong and M&A is not necessary for us to achieve the commitments we're making here today. But M&A can be an accelerant to our growth. As we look forward, we expect continued strong cash flow generation and growth from capital deployment.
We continue to expect 4 - 5 percentage points of average annual EPS growth from capital deployment. Over the 2026 - 2030 plan period, we expect to generate approximately $50 billion in cash flow from operations, and for context, that represents about 70% of our current market cap. As we think about allocating that capital, 20%-25% of that will go to investing back in the business to drive future opportunities, future growth. 20% of that will go towards supporting our dividend. The remaining 55%-60% gives us an enormous amount of strategic flexibility to think about share repurchases, debt repayment, and M&A. If I pull it all together for you, we have a clear path to 10%-14%. We expect durable operating earnings growth of 6%-9%, plus 4%-5% from disciplined capital deployment.
Our confidence is grounded in a portfolio that is aligned to attractive trends, differentiated capabilities, and our relentless focus on operations and execution. With this commitment, we have a clear path to deliver on an adjusted EPS floor of $45 per share by 2030. This is a simple depiction. This is everything at the low end of the growth ranges. I want to stress, $45 in 2030 is a floor, not our target and not our expectation. There are two important things I think that this slide highlights. One is that we are not relying on any one particular growth engine in order to achieve our objectives. Secondly, that we can meet this objective, the low end of the range, with our Pharmacy Benefit Services business staying flat through 2030. This gives us confidence that we will deliver at least $45 by 2030.
As I wrap up, I have a few key messages and then three commitments that I would like to leave you with. One is on the takeaway side, we are building on a proven track record of disciplined execution and differentiated growth. Two, the opportunities that you have heard today from our business leaders and across the board set us up for driving sustainable long-term growth. Three, we have launched a multi-year initiative to save $3 billion, some of which we will invest back in the business, but some of it we will take to the bottom line. Finally, our strong cash flow generation and our disciplined capital deployment will give us significant flexibility to strengthen our business and provide attractive returns to shareholders. Those strengths support a clear set of commitments, three commitments that I will leave you with.
10%-14% adjusted EPS CAGR through 2030, $3 billion of modernization and productivity improvements, and approximately $50 billion of cash flow from operations through 2030. Taken together, we are confident. We are confident in our strategy, confident in our ability to execute, and confident in the value that we can create for consumers, clients, patients, and shareholders. Thank you.
We're going to pause for a short break. Our next session will begin in 15 minutes.
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Please take your seats and silence all electronic devices. Our program is about to begin. Please welcome back Ralph Giacobbe.
Welcome back, everyone. I would actually like to invite our team back to the stage. We have a nice block of time here to get to your questions. You all already have had an opportunity to some degree during the breaks to ask some of us questions. Just a couple of things before we start Q&A. Obviously, raise your hands if you have a question, and wait for me to call on you. Also please wait for a mic. We do have mic runners throughout the room here. I would also ask yourself to limit yourself to one question so we can get to as many questions as possible today, and obviously we can come back around to the extent that we do have time. With that, who would like the first question? Let us go to Ann.
Thank you. Ann Hynes with Mizuho. Obviously AI is a big focus, and there is a fear over time that it could lead to job market losses and things like that. Given your healthcare segment is very levered to the commercial market, how do you view the diversity of your membership base as we all kind of go through this AI transition over the next decade?
Good morning, Ann. Good to see you. As it relates to the overall composition of The Cigna Group, one of the important principles for us was to have strong focus on where we have a differentiated right to win, which is what led us to the three growth platforms we talked about this morning. Our Specialty and Care business, our PBS business, both within Evernorth, and then Cigna Healthcare, which is the balance, the 40%. Those three growth platforms, importantly, we have a differentiated right to win in each of them, and you heard that through all of the presentations this morning. To your point, are there other addressable markets that we do not participate in today? Yes. Those have been deliberate focus choices for us. You heard from Bryan, we continue to have tremendous growth runway within the Select segment within the U.S. employer space.
We are not out of headroom in growing within our Cigna Healthcare business today. Relative to AI potential and job disruption, which was underneath your question a bit, thus far, if you look year- to- date the dis-enrollment within our Cigna Healthcare portfolio is lower in 2026 than it was in 2025. Despite some of the headline and media cycles around AI-driven job disruption, we are not seeing it. We are not seeing it at scale.
In fact, our membership is holding up to an even greater degree than it was in 2025 on that basis. Over the longer run, obviously, we always are looking at the portfolio through the portfolio shaping that I made reference to, and we will always evaluate the addressable markets we are in, the businesses we are in. But today, we're very focused on those three growth platforms where we feel we have a long-term right to win.
Thanks, Brian. Let's go to A.J. Hold on one second, A.J. Let's get you the mic.
When you think about the 10%-14% growth, I know there's a couple specific things. They may not be big enough to move the needle, but your exit of the public exchange markets going into next year, the eviCore review. Should we think of that as pretty even, the 10%-14%, or is there a step back next year because of some of those things? And also maybe the context on the $3 billion of initiatives that you're putting in place today. Is there some upfront spending that you have to do, or how will that be realized over time, and is that embedded in the 10%-14%, or should we think of that just give you more confidence in hitting those numbers, or should we think of that as potentially creating upside?
Morning, A.J. I'll start and then, Ann, if you want to pick up. There are multi parts to that question, so I'll do my best to get it all, A.J. As you heard from the team, very confident in our ability to deliver 10%-14% EPS growth through 2030 when you look at the multiple growth engines as well as the strong cash generation, which gives us multifaceted capital deployment to support that. Now, importantly, underneath that, to your point, the Accelerate to One series of modernization and productivity initiatives, that will generate $3 billion of cost savings for the enterprise by 2030. That'll be cumulative cost savings by 2030 as a result of all the things that Ann covered earlier. Streamlining decision making the best use of technology to drive our cost structure down.
A portion of that will get reinvested into the business, and a portion of that will support the long-term financial commitment of 10%-14%. That is how I would encourage you to think about the Accelerate to One program in the context of our algorithm. As it relates to 2027, specifically, consistent with our prior commentary, we continue to expect at least 10% EPS growth in 2027. That comes off our reaffirmed 2026 outlook. Anything else you would like to add?
I think you got it.
Okay.
Let us go to Jason.
Thanks. Jason Cassorla from Guggenheim. I just wanted to ask quickly on the $50 billion cash flow bridge over the next five years. Can you give us some of the puts and takes in context of the Signature model rollout, if that has any downward pressure on cash flow generation or if there is any incremental uptake of that, or how do we think about cash flow generation off the Signature model?
Yeah. Morning, Jason. I will start, and then Ann and Adam, if the two of you want to chime in on this question at all. We have a long tradition of generating strong cash flow, as Ann demonstrated, and that gives us the ability to deploy capital in a multifaceted way. We will always continue to reinvest in the business first and foremost. We will maintain a 20% payout ratio approximately on our dividend, and then we have the ability to deploy the balance to either share repurchase or strategic M&A. Strong cash generation will continue. We expect $50 billion over the next five years from 2026 to 2030, which incorporates the Signature specific dynamics. Would you like to expand on that a bit, Ann?
Sure. As Brian said, we have thought about Signature and the timing of the cash flows between manufacturers and our clients, and we talked a little bit about that earlier today. All of that is reflected in those estimates. The $50 billion represents our best view of the five-year plan and how Signature and the adoption rate and what that is going to mean from a cash flow dynamics perspective.
Great. Thanks.
Thanks.
Let us go to Lisa up front here.
Thanks very much. Lisa Gill at JPMorgan. Of course, I am going to ask a pharmacy question. As I think about the 0%-4% that you are talking about between now and 2030, I just really want to understand on each end. What gets you to zero? What gets you to the 400 basis points better? How do we think about the conversion to Signature? Is that part of it that initially you will not make as much dollar value?
If I look, Adam, for example, the numbers that you put up, $2.3 billion of operating profit, $2.1 billion of scripts. That comes out to $1.24 a script. Is that what you are looking to recapture in a Signature type of contract? How do I think about that, one? Then just secondly, we did not talk about 340B today. You and I talked a little bit about it over there, but I think there is a lot of questions in the market around changes around 340B and the impact on your pharmacy business.
Adam, maybe you can start on the Signature specific, and then Matt, you can pick up on the 340B aspect of the question.
Okay. Sure. Yeah. Thanks for the question, Lisa. From a Signature perspective, yes, we expect, given how the market is very dynamic right now, and it is evolving, and for the first time in a couple of decades, we are seeing a decline in the rebate model, and we are transitioning. We are leading through that transition from an industry perspective. We expect during this transition, as we move many clients from a rebate model to a rebate-free model, that during that transition, we are going to see the ramp over that time period of the growth.
As we transition more clients into the Signature model, we do expect, based off of the potential improved economics that we will see, you will see a more rebalancing, especially across the market, where many of our clients today, we may actually see some improved profitability, given the benefits that we went over of they are going to see real big benefits in terms of cost savings for their highest cost patients and neutrality for them. There is also some time value money components as well, as was mentioned in the panel. We expect, based off of that and our ability around different solution sets, that we will continue to be able to successfully provide selling into our clients because they do add a lot of value, that those components will create additional tailwinds, as will our ability as we are contracting and minimizing our risk.
From a predictability perspective that I talked about quite a bit today, that means there are clients today that we lose money on, right? We have taken some risk and in the future state, we will be in a much more predictable perspective, and we will be able to eliminate some of that downside risk, which should provide us with some additional upward opportunity throughout that change curve that we are working through over the next four or five years.
I am happy to pick up on the 340B. 340B, as you all know, has been a very long-standing program. I think it was created back in the early 1990s. It has been through a lot of different changes, legislative, regulatory, over those years. As it pertains to us, we participate as a contract pharmacy, but it is still a relatively small part of the business when you put it in the context of the overall The Cigna Group. You can think of, we, for example, do not have retail pharmacies or a big retail presence, and so it becomes a relatively small part of our business, manageable in the context of the overall enterprise, as well as contemplated in the 8%-12% that we talked about in Specialty and Care.
Yeah. Two quick wrap-up comments. I pointed to Matt because 340B contributions are reflected in our Specialty and Care segment, specifically to Matt's point, relatively small part of the overall franchise. To your question about the algorithm, Lisa, the 0%-4% for PBS, we are not assuming any market share gains. That, if we do take share, would give upside relative to what is in our projection.
Thanks, Brian. Let's go to Charles in the middle.
Thanks. I wanted to follow up on specialty and maybe a little bit on that 340B part, because you talked about creating this new pharmacy network, connecting Accredo with Shields. The way I understand in 340B, Shields is helping hospitals to participate in the 340B program. As restrictions from pharma is happening, 340B entities are trying to insource more of those scripts to themselves, not sending out to a contract pharmacy. If you are partnering, I would imagine that would be a headwind for Accredo as a contract pharmacy. Can you explain a little bit more how maybe this partnership changes that dynamic for you guys? Does this allow Accredo to still serve 340B entities and participate in that program to a greater extent than maybe just as a standalone contract pharmacy?
Then just in general on specialty, if I could, obviously you talked about all the LDDs you are part of. Maybe in broad strokes, what are the big therapeutic categories that are important for Accredo that really moves the needles? I know in other peers, people talk about oncology or other disease states. You mentioned MS, for example. What are the big ones that we should pay attention to and see pipeline of new drugs come in and say, "All right, this is a good tailwind for Accredo"? Thanks.
Sure. So a couple of different parts of the question. Let me first just pick up on the 340B point. So a couple of macro points that I would make. First, Accredo does participate as a contract pharmacy, but again, that is a relatively small part of the portfolio and manageable in the context of the current enterprise. That relationship does not change with respect to any pharmacy network that we are in, with Shields or otherwise. So that is the first point. The second point, we are really excited about the Shields investment, and the reason we are excited about the Shields investment is because of those partnerships with hospitals and health systems, and the fact that they are helping those hospitals and health systems run their specialty pharmacies. We do see that as an important growth vertical, particularly in that medical benefits space.
I would note, though, that the way that we've structured the Shields relationship, we think of it as like a preferred equity stake, but it's not dependent on the earnings of Shields. So to the extent that there's fluctuations in that doesn't actually manifest itself into our P&L. I would just call that out. We're excited about the pharmacy network, but I wouldn't call out anything specific to 340B with respect to that, nor any changes in the relationship there. As you go to limited distribution drugs, this is an area where we really shine. We are the leader in limited distribution drugs. We have access to over 330. That is more than anybody else. It includes over 30 products that are available exclusively at Accredo. In the limited distribution drug space, you tend to see that show up in the more rare drug space.
Drugs that tend to be smaller volume, they tend to be higher cost. I would look at, for example, the rare advanced therapies, gene therapies, where we've seen quite a bit of growth in the LDD space. Oncology also is a sizable place for Accredo, actually. I think it's our second largest therapeutic area, and it's an area where we see growth. You actually saw that in the video that we showed from Silvio.
That was a manufacturer partner who brought an oncology product to market, and they chose Accredo as their exclusive pharmacy. A lot of the capabilities that we have, our clinical expertise, as well as what we're building going forward with things like Pharmacy Forward, helping get patients started on therapy and keeping them on therapy is really important to manufacturers. As we continue to extend our leadership position in that's why we have the confidence we'll continue to be a leader in that space as well.
Great. Thanks, Matt. We'll go to Justin all the way in the back. Let's get some back questions there.
Thanks. Justin Lake from Wolfe Research. I wanted to follow up on Lisa's question around the PBM side of the business. You gave the example of the new contract in PBS at stable margins as contracts transition to a fee-based model, yet you also talked about the earnings trajectory commentary seemed to indicate that the next couple of years might be closer to the low end of that 0%-4% growth.
First, do I have that right? If this transition is not driving the lower margin, can you help us understand what is? For instance, you talked about the time value of money. I do not see much investment income running through the PBS business. Maybe you are talking about having to front the dollars, and maybe there is an interest expense cost there, but what drives you to the lower end, the zero over the next couple of years on the PBS side?
Adam, do you want to start? Ann, you can pick up on the time value piece.
Sure. As we have discussed this morning, there is first the transition of the business, and as we have indicated before, there are some smaller investments that are occurring as we work to transition the business, as we are overhauling the entire supply chain. So we are recontracting the entire pharmaceutical manufacturer components, and certainly from a pharmacy perspective as well. I characterize those negotiations on both sides going well. We are middle innings with pharmacies today. We are getting more and more pharmacies that are enrolling in our new cost-plus model. On the pharma side, we are having more of the larger manufacturers that we are gaining agreement on of how that is going to look future state, and much of where, from a manufacturer perspective, there is going to be an element of a lot of that value that is coming directly to those patients taking high-cost drugs.
That value is going to be provided from a manufacturer perspective in a more immediate term than it is today. There isn't an expectation that we're going to be supplementing that for a long term. Instead, it's going to be much more from a manufacturer perspective of providing much of that value up front. As we transition through that period, we should start to see some additional opportunities longer term.
We're also going to be extracting more value out of the market, and our admin fee tied to the value that we provide or more closely to the value that we provide future state means that admin fee, there should be an opportunity for us to continue to provide a higher overall admin fee as we're extracting more value out of manufacturers and providing the best trend management in the business. Those opportunities create a real opportunity for us to continue to ramp those earnings during that time period. Ann, anything to add?
I think you covered it well. The only thing I would hit on margin that you didn't touch is just to remind you of the dynamics. When we talk about the three large clients that we've renewed, that's all, for the most part, sitting within the PBMs part of the business. When you look at it, there's a margin differential there between even the target margin.
Justin, just to double-click on the timing of the 0%-4% emergence to your first part of your question. If you remember the slide Adam showed that showed industry rebates PMPM growing for many years and actually declining in 2026 and 2027. That puts some modest pressure on our legacy economics in the PBM prior to Signature models. Similarly, we're seeing GLP-1 growth slow down. Those types of things put modest downward pressure, but the strength of Cigna Healthcare, the strength of our specialty business, give us the 10%+ EPS growth for 2027, despite those dynamics. As Adam indicated, later in the decade, we'll start to see that growth rate increase.
Thank you. We'll go to Elizabeth right up front.
Hi, guys. Elizabeth Anderson from Evercore. Thanks so much for the question. One of the things you talked about today was the Evernorth wholesale business. Can you talk a little bit about what are your expectations there? Is that distributing for Accredo? Is that mostly focused on hospitals? Is it more open than that? More details on that would be very helpful. Thanks.
Absolutely. Broadly, we're really excited about CuraScript overall. This is a $25 billion business. It's been growing at about 20% per year for the past five years. Really strong performance. We expect about $20 billion in new distribution revenue by the end of the decade. I would call out Evernorth Wholesale as one of the things that drives that. There's other drivers, too. We see organic growth, for example. We see growth in serving our own pharmacies, Accredo, as well. We see growth in the hospital system channel with some of the capabilities that we've led, as well as Evernorth Wholesale. Evernorth Wholesale is really exciting because what it allows us to do is get access to new medications that historically we haven't had access to within CuraScript. That helps us grow business with existing customers.
We have existing customers that buy those drugs or would like to buy those drugs and can now have access to that through us. It'll give us access to new customers who may want to use CuraScript or Evernorth Wholesale, but historically haven't if we don't have the full line access to medications. This gives us another avenue to grow that business. I would point to it as one of a number of areas of growth and part of why we feel really confident in the $20 billion of additional distribution revenue by 2030.
Let's come over to this side. Let's go to Lance.
Okay.
Hold on, Lance. Let's wait for the mic here. Thank you.
Thanks. Just one quick follow-up on the Pharmacy Benefit Services section, and then really wanted to ask about specialty a little more. On the PBS side, though, as you talk about pressure maybe as you transition over to Signature and whatnot, could you help to give investors a little confidence in why this would be a floor for margins? I think one thing that might be interesting is obviously you run a huge self-insured employer business. You are familiar with component elements of what these costs and returns and margins are for comparable businesses. So how do you guys get comfortable with that? Then over on the specialty pharmacy side, if you could talk a little bit about in the growth in earnings that you see from the business, how much of that should we be thinking of as revenue as opposed to earnings growth?
What are biosimilars and generics doing so that we can think that through and how that impacts margin? Lastly on that, what other sort of capabilities or white space do you still need or you see opportunity? Obviously, distributor you just talked about, but are there things in rare and orphan? Are there particular conditions? Are there particular aspects of infusion or something like that present opportunity for you? Thanks.
Thank you for that one question, Lance.
Yeah. Thanks, Lance. There's a lot in there. Maybe I'll start. Adam, if you want to pile on the Pharmacy Benefit Services piece, and then Matt on the specialty component. To your point on margins, legacy models, Signature models, A, we will have the pen on the underwriting of the pricing, which is very important. Adam and Ann's teams are working together on that. Two, if you think about the value creators in terms of why clients work with us, they're the same in our legacy rebate driven models as they are in our Signature models, right? We deliver superior unit costs. We have great clinical programs that ensure medication adherence. We administer complex benefit designs. Same exact value creators in the legacy model as in the Signature model. We'll get paid differently.
You heard Alysha when she was up here on the panel with Adam talking about administrative fees will go higher, and employers are starting to understand and accept and embrace that. But we expect to target the same margin profile, legacy model, new model. Anything you'd add to that?
Only that it's recognized based off of where we're going to be able to lead the industry here, that clients need a strategic partner. In these times where they're seeing more unpredictability, they need a leader that's going to be able to shepherd them through those things. We are looked at today, bar none, as that leader. It's shown in the really high client retention rates that we're seeing in the mid-90s. It's also demonstrated in the really strong new sales growth that we continue to see that is profitable, that is hitting target margins to Brian's point on having control of the pen there. We're continuing to be able to lead from a thought leadership perspective.
Not only are we looked at today as being the right partner now, even with the unpredictability and uncertainty around some of the rebate components, which is putting a small amount of pressure on our earnings, but from a growth potential long term, we're looked at as the right partner because we are going to continue to deliver real value to those clients from a strategic perspective and be able to keep that cost curve in check for them.
Thanks.
And then to the second part of the question, if I think about just the earnings growth in specialty. First, we reaffirmed today 8%-12% long-term annual earnings growth. We are confident in that. We have actually, over the past two years, delivered at the high end of that range, and that is a combination of both the secular growth that we see as well as the specific capabilities that we have that differentiate us, that allow us to grow even beyond the secular growth that we see. There are a couple of things that are driving the overall market growth. If you step back, it is a $480 billion market. That market has been growing in the high single digits, and we expect that to continue. There are a couple of things driving that. One is just new drugs coming to market.
So this pipeline is very strong. I think north of 70% of the drugs that are approved by the FDA last year were specialty drugs, and we expect that growth will continue. We also see a lot of growth just in the existing medications. We are seeing, for example, doctors in some cases moving to specialty medications earlier in treatment as a frontline therapy, as opposed to, in some cases, after multiple attempts at a traditional medication. All of that leads to the secular growth in the space. Biosimilars, as you mentioned, they offer savings opportunities, so it tends to have a negative effect on revenue, but it expands earnings. Importantly, it is a savings opportunity for patients and plan sponsors. Because of our model of alignment with them, that actually helps fuel our growth as well. The strong biosimilar pipeline we see is another fuel for earnings growth.
We expect about $100 billion in annual spend to face new competition by 2030. You asked a part of the question on additional capabilities. Importantly, we do not feel like we need additional capabilities in order to achieve that 8%-12%. We are really confident in the capabilities we have both in the pharmacy and medical benefits space. Having said that, we do see the increased growth in the medical benefits space as a tailwind for us. The fact that we have CuraScript that has been growing the way it has been growing, the recent acquisition of Carepath, as well as the investment in Shields, we think that combination of capabilities across pharmacy and medical is a differentiator for us, all of which gives us the confidence in that 8%-12%.
Great. Thanks. Let us go to Kevin Fischbeck right in the middle.
Kevin Fischbeck from Bank of America. Just want to go to the PBM side of things. I think there's just a lot of concern about the timing of legislation and how it's going to impact profitability. I think there's always concern when it comes to PBMs that there's another shoe to drop. But it sounds like you're saying that 2026 is, 2027 maybe is kind of the bottom from a margin perspective, and you'll actually be accelerating even as the legislation starts to take effect and customers are increasingly buying these programs. Just if you haven't actually contracted yet, the amount of visibility that you have and that trajectory of improving margins over the next couple of years, and then when we think about that 0%-4% number, how much of that is just margin improvement versus revenue growth?
Doesn't sound like there's actually much revenue growth because right now you're making these investments in the transition, so margins are below average in 2026 versus where the target margin is, say, in 2030. I just want to understand kind of the math behind 0 to 4, what kind of revenue growth that assumes versus margins.
Appreciate all those questions, Kevin. I'll start, and Adam, you can jump in on this. On the latter part of your question, you should think of the Signature model will be a fee-based, from an analytical standpoint, a simple model to understand. It'll be easier for all of you to model, easier to understand what's happening relative to the conversion of customers to revenue and earnings once we're fully scaled. We're going through a migration period, as you know. 2028 is when it will start to scale. We'll have 50% of eligible lives in that by the end of 2028, and it'll grow thereafter. To your point, margins right now are somewhat depressed in our PBS business as we're making investments in Signature as well as some of those industry-wide dynamics that I referenced earlier.
We will see some level of margin expansion through the balance of the decade in that business. Now, Adam and his team are doing a tremendous amount of work to build out our Signature model. You shouldn't think of as we're starting from zero. There's actually quite a bit of discussion happening with manufacturers, discussions with potential clients, discussions with existing clients. Do you want to pick up on where we are from.
Sure. Yeah. Interest remains high as we've covered. 2028 is when Signature will go live. Cigna's fully insured block will go live next year within the Signature model. We already have clients that are looking for more transparent, simplified fee models, and so we're transitioning clients now into those types of models. There's the high interest within Signature. We are seeing where full pass-through models, a definite movement towards much higher administrative fees because it's offset by full transparency of the value that's going through. We remain confident in our ability to successfully transition clients, the 50% or more of our members, which will be transitioned by the end of 2028 into those types of models.
The market itself, you can feel it shifting. Where we were back in October of last year making an announcement, there was certainly a lot of skepticism around a rebate-free model. We have spent the year before preparing for it. We had the tracks laid as we worked through with manufacturers and with pharmacies, and that's all progressing. We are on track to be able to deliver it. Interest will remain high. We'll be able to transition. Keep in mind, there is clarity in the market today.
We have an FTC settlement, we have the CAA, which will go into effect in August of 2026. We know what those components are from a federal landscape perspective, and we're executing against those to give the assurances to our clients that they will have CAA compliance, and we'll see strong adoption because the whole market's going to have to make decisions at that point of, do they want to stay with the CAA-compliant legacy rebate model, which we will have available, or what our new standard is from a Signature perspective. Either way, we remain confident then that we'll be able to grow to the higher end of that 0% - 4% range as you get into those outer years.
Let's go to Michael Ha.
Hi, thank you. Michael Ha from Baird. I just wanted to double-click on Signature. When you describe margins as being preserved under Signature, does that also mean comparable earnings per member, assuming the same utilization and drug mix? Or should we distinguish between preserving margins versus preserving earnings dollars? To Brian's point about the rebate pool shrinking, for your legacy business, do you have contractual flexibilities around fees or other terms, within the contract period, to help preserve earnings, or do you really have to just wait till repricing in the new contract renewal?
You okay to start on that?
Sure. From a rebate perspective, to hit the back end of your question, we are managing our guarantees today, and they are in line with our expectations, and we do have adjustments where needed to be able to work with our clients to make those adjustments when market events do occur. We have been able to manage through that. It is manageable today. We expect it to continue to be manageable through Inflation Reduction Act types of components throughout the time period or MFN adjustments. That part is not a concern. From an overall earnings perspective, we do expect to have an earnings level that is consistent with where we are today for the future state and some new opportunities around the overall earnings.
I would not expect that you are going to see. You will actually see more predictability as we are able to mitigate more of the downside risk within Signature because we will have a predictable, stable level within the potential to grow off of that by selling in new solutions and products. Those products are priced based off of the value that we deliver. As we continue to deliver more value, and as costs continue to go up in terms of high-cost specialty drugs, that means we are going to continue to be able to deliver more value in the effective solutions that we put into place, which means we will be able to then be compensated at a higher amount for those, which should continue to then ramp. We will leverage value-based solutions as we do today.
They may look different than our SafeGuardRx portfolio that we've been really successful with, where we have over 60 million of our lives enrolled in those programs. That type of chassis is what we will utilize into the future. So those components don't go away. They'll just be leveraged in a different form and still be able to deliver on the durability of the earnings. Ann, anything to add?
Thanks, Adam. Can we go to Erin? Right up front here.
Great. Thanks. Erin Wright, Morgan Stanley. As you think about the medical benefit being the next leg of growth in specialty, I guess, do you see the need to own or partner more closely with an MSO or other provider-facing assets just to capture more of that opportunity at CuraScript or otherwise? Do you need to own that entity to fully recognize that? Also, as you think about private label biosimilars in Part B arena, are you limited on that front at all, or how can you participate there as well?
So probably worth noting, if you step back, we do see a lot of growth potential in that medical benefit space, and we have a leadership position in pharmacy today, but we have a collection of assets that we're really excited about, CuraScript being the largest, Carepath in our investment in Shields, and the combination of that, we feel will be able to deliver outsized growth in that medical benefit space. It's probably worth noting, we partner with providers quite a bit today. CuraScript serves about 12,000 providers, physicians offices, infusion centers, hospitals, and health systems. Our acquisition of Carepath, as well as the investment in Shields, gives us partnerships with many more hospitals and health systems as well. So we have a really, really good provider chassis today through partnership.
I would say we feel like we have the assets that we need in order to compete in that space, and we are really excited about that. We have already been delivering CuraScript for the last several years, 20% year-over-year growth. We expect about $20 billion in new distribution revenue, and we are really confident that that will help us grow in that space, as well as be part of the 8%-12%. As it pertains to private label biosimilars, I would say this is really one example where the collection of assets that we have across The Cigna Group is really impactful. So we have Cigna Healthcare, we have our pharmacy benefits business, we have our specialty pharmacy, and we also have our specialty distribution and provider businesses.
If you think about the collection of all of that as we start seeing now biosimilars, as you mentioned, in the medical benefit space, that is just another chassis that we have to help drive savings for patients, savings for providers, as well as help fuel our growth as well. So we are actually really excited and bullish about that opportunity, and it really comes down to that collection of assets that are pretty unique to The Cigna Group.
Let us see. We will go to Stephen Baxter all the way in the back there.
Hi, thank you. I was hoping you could speak a little bit about the competitive landscape in the PBM space. I think there is a perception that alternative PBMs have gained a lot of momentum over the past couple of years, and they are competing on fee structure, transparency, and also I think there is a perception that pricing is part of the reason that they are winning in the market. I guess the model change addresses transparency and fee structure, but I guess how would you describe how you expect the competitive dynamics with these alternative PBMs to play out?
Matt and Adam, you guys are popular today on our panel. We had our best selling season in 2027 in several years in PBM, which speaks to the robust nature of the value prop we are able to deliver against some of those alternative PBMs, as well as the larger, more scaled competitors. Adam, maybe you can pick up a little bit more on how you see the competitive landscape going forward.
Sure. It is a highly dynamic market today. As Brian mentioned, we have had the best selling season in quite some time, especially when you look, if you take out mega clients and you look at the breadth and depth of what we are selling across government programs, labor, and small middle market and even large market. Some of those wins are coming from some of the smaller PBMs as win backs, where they went expecting something new and did not get what they thought they were going to be delivered on. What clients are looking for, what wins today and what won tomorrow and will win in the future is still the consistency of can you address affordability, can you simplify the model from an accessibility perspective, and can you still deliver best-in-class transparency?
Our current model does those things exceptionally well, and we are offering best-in-class economics, given our size and scale and the 117 million Americans that we already serve today. We are leveraging that as we move forward with our new model as well, improving the level of transparency with our clients. They are looking for that strategic partner. What we have also done is we are really proud of our people, and we are bringing out the expertise of our people out into the market that work on these things every day.
We have got a leadership team with decades of experience. It is that type of knowledge across clinical, financial, and being able to truly create new innovative solutions that we are recognized as a continued leader in the market, and that is where we continue to shine. I remain confident on where we are today, regardless of who we are competing against and what we are going to be up against in the future as well. That is why we continue to see high client retention and profitable new sales growth.
Let's go to George.
Good morning. George Hill from DB. I wondered if we could talk a little bit more about the biosimilar rebate dynamic. You had mentioned, if I heard you correctly, that the lower rebates in biosimilars are putting pressure on clients, and there's some sensitivity in their decision-making process. I assume that the increased use of biosimilars is going to drive margin expansion in the specialty space, but I would also assume that clients are most concerned with lower drug costs, though I think many of us are sensitive to the rebate dynamic. I would just love it if you could just spend a little more time on what is the client sensitivity around the changes in rebates as biosimilars get adopted versus what happens on the brand side. And again, the margin contribution.
Sure. I'll start, George, and then Adam, if you want to talk about the client side, and Matt, if you have anything you want to sweep relative to the biosimilar contributions. As you think about our portfolio in Evernorth, branded drugs with rebates, so take Humira as a good example. The contribution of that financially would show up on our Pharmacy Benefit Services business that Adam oversees, right? The 23% of the company's earnings. When Humira biosimilars were available, we made a full court press toward moving as many patients as possible into the biosimilar with a $0 patient out-of-pocket, much lower net cost to the plan sponsor, whether that be an employer or a health plan. The contribution of the biosimilars ends up in the Specialty and Care segment.
If a previous HUMIRA script would have been in Adam's P&L, the biosimilar now ends up in Matt's P&L, right? And it's a good thing for the patient because they get a $0 out of pocket. It's a good thing for the employer or the health plan because they get a lower net price. So to your point, at the end of the day, the lowest net price is what rules the day, and that's been the orientation we've used around biosimilar adoption. Anything else on the client side?
Yeah. I think on the client side, clients, they have been used to growing rebates for the last couple of decades. With the largest drug in the world, Humira, going biosimilar, they are used to evaluating us in terms of different guarantees, and rebate guarantees are a primary driver of making decisions. Those rebate guarantees today are now flexible. What they are realizing is much better overall net cost savings. There is a win for clients. They have just got to evaluate it differently. That is what Alysha has to explain of, she was on the panel today, and of you are getting a net win here, but it is how do we make sure that an organization like us that has been really successful at transitioning more patients to biosimilars, how we are not penalized in evaluating us versus others from a competitor perspective.
This actually is moving the market into a much more positive direction, which is focused on true net cost and less on guarantees. We will be successful either way, but I think it is a much better place to go of you are saving patients money, you are saving clients money at the end of the day. That is the best thing, and we are extracting more money out of manufacturers in these types of new environments.
Thanks. Okay. Maybe we will take one more. Sarah?
Sarah James, Cantor. At the midpoint, there is about 170 basis points of the long-range projection that is driven by above-market growth. Hoping you can double-click on a couple of the assumptions underpinning that. The first 70 basis points are the 1%-3% from Specialty Care Services. What medical benefit share gain assumptions is that based on, and how did that fare in 2027 versus that baseline? Second, there is about 100 basis points to enterprise or 2%-3% to the segment in healthcare. Can you scale the buckets of how much of that is Select versus international and stop loss?
Sure. Thanks for the question, Sarah. I will start, and maybe Matt and Brian, we can do a tag team on the Specialty and the Cigna Healthcare assumptions. As you heard throughout the day, we talked about our three pillar growth framework of delivering core growth, leveraging distinct capabilities, executing with discipline. The above-market growth falls squarely where we are leveraging distinct capabilities. In the case of Specialty, it is all the things you heard from Matt, the network of clean rooms, industry-leading LDD access, great patient experiences, manufacturer relationships, et cetera. In the case of Cigna Healthcare, the affordability gains that Brian talked through will drive our ability, along with the funding agnostic model. Would you guys mind putting a little bit more of a finer point on that?
You definitely hit the highlights. I think, stepping back, the 8%-12%, we are reaffirming that long-term annual earnings growth today. But we have grown at the high end of that for the past several years, and that is because of the combination of capabilities that we talked about, the clinical expertise we have, the leading access to medications, as well as the supply chain advantage that we have. That includes capabilities across the Pharmacy Benefit space. It also includes capabilities across the medical benefit space. While we would see outsized growth in the medical benefit space, I would not just highlight that as the only area of reasons why we feel confident beyond the secular growth. It is really the combination of capabilities that we have across all of those that gives us that confidence.
Yeah, and as it relates to Cigna Healthcare, there is two pieces. You mentioned both of them, stop loss, and you mentioned Select. I will add one more. As it relates to stop loss, we commented that we have 100 basis points of margin recapture. The majority of that is in 2026. We are on path for that. There will be remainder that happens in 2027. Beyond that, the growth that we expect in 2027 is both in our middle market and in Select. Mentioned earlier the outsized earnings that Select drives. As we grow into Select in 2027, you will continue to see that carry over from a margin standpoint as well.
Okay. That concludes the Q&A session. I am going to ask our leadership team to step down, and we can move to Brian’s close. Again, appreciate everyone’s question and engagement there.
Thanks, Ralph, and thanks everybody. I really appreciate the detailed questions you just asked and the level of interest you demonstrated throughout the day today. Hopefully, you heard from our team the passion, the confidence, the level of engagement we have with one another, and the way both we deliver value to the market, but also the culture we have. Hopefully that was evident to you throughout the time this morning. Thanks for prioritizing this. We really do appreciate it. Just to recap a few key points. You heard my opening, and throughout the day, we talked about our Lead to One vision. This is our unifying enterprise vision for delivering personalization at scale for all the customers and patients we serve across all of our businesses, whether they are healthy today or whether they have complex healthcare needs.
The essence of Lead to One is personalization at scale. You heard about this vision being enabled by our strategic growth framework, delivering core growth, leveraging distinct capabilities, and executing with discipline. We talked about One Team, the fact that all of our employees are aligned around serving the customers and patients holistically that we have the privilege to serve. We talked about Accelerate to One, which is our $3 billion multi-year savings initiative through driving modernization and productivity across the organization, a portion of which will make our products and services more cost competitive in the market, and a portion of which will support our financial commitments over the longer run.
You also heard quite a bit of focus from us on complex healthcare needs, and we talked about how just 8% of patients have complex healthcare needs, yet that represents 55% of all the healthcare spending, and how our intentionally built portfolio across The Cigna Group leads to an even higher percentage of the spending we impact being associated with complex care. We discussed the leadership position that we have carved out over a period of years and decades, specifically in serving those individuals who have complex healthcare needs. That includes our Specialty and Care Services segment, which now represents 37% of the company's total income, up from just 30% at our last Investor Day. Taken all together, hopefully you would agree The Cigna Group is a compelling long-term investment.
We are positioned in the areas of healthcare where both needs and spending are concentrated today and are growing rapidly. We have competitive advantages specifically in serving those patients who have complex healthcare needs. Our Lead to One vision unifies all of our 60,000+ colleagues around serving customers and patients uniquely and driving personalization at scale. The deliberately shaped portfolio includes business unit expertise like you heard today from Bryan, Matt, and Adam, along with reinforcing enterprise capabilities, as you heard from Amy, Katya, and Ann. We have a track record of executing operational excellence as well as financial discipline with strong capital stewardship. All of these capabilities give us a long-term runway for durable growth and shareholder value creation. Thank you for your attention. I really enjoyed the interaction today, and I hope you all have a great afternoon. Thanks again.