Company: CI
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001739940-25-000021
Chunk: 293

Company: Cigna Group
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 2
Chunk 293
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 In addition to the types of drugs, the mix of generic or biosimilar claims also impacts our results. Generally, a higher mix of generic and biosimilar drugs reduces revenues and increases income from operations, as generic and biosimilar drugs are typically priced lower than the branded drug counterparts, providing positive impacts on our clients, our customers and us. 

•Pharmaceutical manufacturer inflation also impacts our pricing because most of our contracts provide that we bill clients and pay pharmacies based on a generally recognized price index for pharmaceuticals. Therefore, the rate of inflation for prescription drugs and our efforts to manage this inflation for our clients continue to be significant drivers of our revenues and cost of revenues in the current environment.

•Our client contract pricing is impacted by our ongoing ability to negotiate favorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing, and manufacturer rebates (also referred to as affordability improvements). Through these affordability services, we seek to improve the effectiveness of our combined and standalone solutions, for our clients, by continuously innovating, improving affordability and implementing drug purchasing contract initiatives. Our continued affordability improvements further reduce drug costs for our customers and clients, and we share in the value delivered, which generally results in a favorable impact on our income from operations.

Key factors that impact Specialty and Care Services:

•Customer and client growth, both organic and new business, in our Specialty and Care Services business generally results in increased revenues and income from operations. This includes client movement in our specialty, specialty distribution services, virtual care, physical primary care, benefits management and behavioral health services as we expand our businesses and build upon our cross-enterprise leverage.

Results of Operations

Financial SummaryThree Months EndedMarch 31,(Dollars in millions)20252024ChangeAdjusted revenues (1)$53,681 $46,226 16 %Pre-tax adjusted income from operations (1)$1,434 $1,360 5 %Pre-tax margin (1)(2)2.7 %2.9 %(20)bpsSG&A expense ratio (3)1.9 %2.1 %(20)bps

(1)See Note 17 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively. 

(2)Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.

(3)SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 17 to the