Aug 1 (Reuters) - Cigna ( CI ) reported a second-quarter

profit on Thursday that beat Wall Street estimates, helped by

strength in its pharmacy benefit management unit due to adding a

major new client.

In 2022, health insurer Centene ( CNC ) selected Cigna's ( CI )

unit Express Scripts to replace CVS's Caremark and

manage its annual pharmacy spend of around $40 billion.

Pharmacy benefits managers serve as intermediaries among

drug manufacturers, health insurance plans and pharmacies, and

help negotiate prescription drug prices and coverage.

Pharmacy benefit services revenue jumped 41% to $26.6

billion from $18.8 billion helping push Cigna's ( CI ) revenue

excluding a $53 million negative effect from investments to

$60.5 billion. Analysts had expected revenue of $58.3 billion,

according to LSEG data.

"We see this as a fairly solid quarter that should leave the

company with a reasonable set up into the back half of the

year," said JPMorgan analyst Lisa Gill.

Cigna ( CI ) said in June it had began distributing close copies of

Abbvie's ( ABBV ) arthritis drug Humira at no out-of-pocket cost

to patients using its specialty pharmacy Accredo.

The company estimated 100,000 patients using either Humira

or one of its biosimilars would save an average $3,500 per year

following the move.

"The biosimilar opportunity goes well beyond Humira. By 2030

we expect an additional $100 billion of annual specialty drug

spend in the US will be subject to biosimilar and generic

competition," said Chief Executive David Cordani on a conference

call.

The company also expects growth in its PBM business driven

by GLP-1 weight loss drugs from Eli Lilly ( LLY ) and Novo

Nordisk.

MEDICAL COSTS

For the quarter, the company's medical care ratio - the

percentage of premiums spent on medical care - came in at 82.3%

better than analysts expectations of 82.43%, according to LSEG

estimates.

Cigna's ( CI ) managed care revenue comes primarily from

administering employer-sponsored healthcare plans.

Health insurers have been contending with elevated medical

costs since late last year, as older adults catch up on delayed

procedures and lower-than-expected payments from the government

for managing healthcare for people aged 65 and older or with

disabilities, under the Medicare plans.

Compared to UnitedHealth ( UNH ) and Humana, Cigna ( CI )

has a much smaller presence in the Medicare Advantage (MA)

market and is in the process of selling its MA business to

Health Care Service Corp.

The company maintained its annual profit forecast of at

least $28.40 per share, and said it continues to expect a

medical care ratio between 81.7% and 82.5% for the year.

For 2024, analysts expect a profit of $28.51 per share and a

medical care ratio of 82.08%.

Cigna ( CI ) shares fell 1% at $345 before the bell.

It reported second quarter adjusted profit of $6.72 per

share, ahead of LSEG estimates of $6.41.