US health insurer Cigna Corp on Thursday named company veteran Eric Palmer as president and chief executive officer of its Evernorth health services unit that primarily houses its pharmacy benefit management business.
The appointment comes as the health services unit, which was rebranded last September to Evernorth, has shown resilient growth in the last few quarters.
The company’s shares were up 1.1% at $204.15 in mid-day trading.
Palmer, who has been with Cigna for 23 years and most recently served as the chief operating office of Evernorth, will start in his new role from January.
Tim Wentworth, the current CEO of Evernorth, will retire by the end of this year, the company said.
The health insurer also announced several other leadership changes to help accelerate growth across its business portfolio.
Health insurers are facing several challenges due to the COVID-19 pandemic, including direct costs related to testing, treatment and vaccinations, as well as higher disenrollment in employer-sponsored plans caused by its economic impact.
Evernorth includes pharmacy solutions, care coordination and delivery, pharmacy benefit management, and intelligence businesses.
The pharmacy benefit management business Cigna acquired through the 2018 buyout of Express Scripts is part of the unit, as well as the company’s specialty pharmacy business Accredo.
Pharmacy benefit managers (PBMs) serve as intermediaries between drug manufacturers, health insurance plans and pharmacies to negotiate prescription drug prices.
(Reporting by Mrinalika Roy in Bengaluru; Editing by Sriraj Kalluvila)