Why Cigna Group Stock Dived Today

Monday wasn't a very good day for health insurers, and if a day's not good for health insurers you can bet Cigna Group (NYSE: CI) stock took it on the chin.

The blow came from the highest levels of government, spooking investors and driving down the stock prices of numerous healthcare-institution stocks. Cigna's share price eroded by more than 5%, on a day when the S&P 500 index rose by over 3.2%.

A talking-down from Trump

Big Healthcare as an industry was hit from two directions on Monday. The first blow came from President Trump, who in signing a new executive order denounced the pharmacy benefit managers (PBMs) that negotiate drug prices for insurers and other healthcare institutions.

Image source: Getty Images.

"We're going to totally cut out the famous middlemen," Trump said, referring to the PBMs. Prior to that remark, Trump's executive order mandated the pharmaceutical industry to lower its drug prices within 30 days.

Additionally, legislation drafted by the House of Representatives contains several measures that could change how the PBMs are compensated. Since both the House and the Senate are controlled by the Republican party, at the moment it seems likely that such a bill has a good chance of being passed into law.

Cigna operates one of the most impactful PBMs, Express Scripts. Other healthcare titans with PBMs under their wing also traded down on Monday, particularly CVS Healthcare (CVS Caremark) and UnitedHealth Group (Optum Rx).

PBMs on the hot seat

Fairly or otherwise, PBMs have been sharply criticized by many healthcare reform advocates for driving up drug prices for Americans. They remain juicy targets for reformers, and it's likely their business will be curtailed one way or another no matter the ultimate fate of that House bill.

Still, a company like Cigna is large and sprawling even without its PBM, so I don't see a weakened Express Scripts dragging down its owner all that much.

Should you invest $1,000 in Cigna Group right now?

Before you buy stock in Cigna Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cigna Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $714,958!*

Now, it’s worth noting Stock Advisor’s total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends CVS Health and UnitedHealth Group. The Motley Fool has a disclosure policy.