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The Rise and Fall of Express Scripts: Foreshadowing the Future Business Landscape?
- jccollins1s
- Apr 6
- 2 min read
At one point, Express Scripts stood as the largest pharmacy benefit manager (PBM) in the United States, managing benefits for over 100 million lives—nearly one-third of the U.S. population. The company achieved this scale primarily through aggressive acquisitions, consolidating the fragmented PBM market into a behemoth with significant negotiating power and market dominance.
But the very playbook that led to its dominance also set the stage for its decline.
📉 What Happened?
As regulators tightened oversight and blocked new PBM acquisitions, Express Scripts hit a wall—it could no longer rely on deal-making to drive the EPS growth Wall Street expected.
At the same time, vertically integrated players like CVS Health (Caremark) and UnitedHealth Group (OptumRx) were gaining ground, leveraging synergies between their insurance and PBM arms to boost margins and pricing power.
With nearly a third of the PBM market already under its control, Express Scripts struggled to sustain double-digit EPS growth. Despite strong internal efforts and modest organic gains, it wasn’t enough. The company slashed SG&A costs by roughly 30% year-over-year to stay profitable. Eventually, it was acquired by Cigna and absorbed into the Evernorth brand, with key divisions spun off or restructured.
This also begs a bigger question:
⚠️ Was This Simply a Case of Growing Too Fast, Too Soon?
Is the story of Express Scripts not just about regulation and market saturation—but also about the risks of unsustainable growth? In the race to acquire market share and appease investors, the company may have grown too fast to build the infrastructure needed to sustain long-term, organic performance. Once acquisition pathways were blocked, the strategy stalled.
🧠 A Warning for Late-Stage Capitalism?
This story prompts a broader question: Is this a foreshadowing of what happens in late-stage capitalism?
When companies can no longer grow organically—and acquisitions are restricted—how do they meet ever-increasing financial expectations? Do we see a continued cycle of consolidation followed by fragmentation, where startups with similar models but lower cost structures chip away at incumbents through pricing transparency and customer-centric offerings? Or do we enter a new phase altogether—where AI rewires the traditional business lifecycle and enables entirely new efficiencies or competitive structures?
🩺 At TotalMed Networks, We Help the Healthcare Industry Navigate What’s Next
The dynamics we saw with Express Scripts are already playing out across the broader healthcare landscape—not just for providers, but for payers, systems, and networks facing increasing pressure to perform under regulatory, operational, and financial constraints.
At TotalMed Networks, we partner with organizations across the healthcare spectrum to help them anticipate disruption and respond with clarity. Our services are designed to align stakeholders and strengthen long-term positioning:
✅ Revenue Cycle Optimization & Financial Performance Strategies
✅ Network Development & Contract Alignment
✅ Consulting Across Growth, Cost Containment, and System Design
Our goal is to help organizations think differently about sustainability—whether it’s by building smarter networks, improving cash flow, or aligning incentives across stakeholders.
🔗 Learn more at www.totalmednetworks.com
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