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Cigna beat Wall Street estimate for second-quarter profit on Thursday, helped by strength in its pharmacy benefit management business. It is one of the last health insurers to report quarterly results for the sector, which has been bogged down by persistently high medical costs in government-backed plans. Cigna, however, is insulated from such cost pressures as it recently sold its Medicare business to Health Care Service Corp. It banks more on its pharmacy benefit management and commercial health insurance businesses. “Our performance in the second quarter reflects our disciplined execution and the strength of our business mix,” said CEO David Cordani. Revenue from its Evernorth healthcare services unit, which includes Cigna’s pharmacy benefit management business, rose 17% to $57.83 billion during the quarter. Pharmacy benefit managers help negotiate drug prices and coverage with manufacturers on behalf of employers and health plan clients. PBMs’ business practices, however, have drawn increasing scrutiny in recent years from U.S. lawmakers looking to lower drug prices, state attorneys generals and from the Federal Trade Commission, which released a report earlier this year accusing PBMs of inflating drug costs. Cigna’s adjusted profit of $7.20 per share topped analysts’ average estimate of $7.15 per share, according to data compiled by LSEG. The company maintained its annual adjusted profit forecast of at least $29.60 per share, while analysts expect $29.68 per share. For the quarter, it reported a medical care ratio the percentage of premiums spent on medical care of 83.2%, up from 82.3% a year earlier, but in line with analysts’ estimate. The company said the increase was due to higher stop-loss medical costs. Stop-loss insurance plans help protect health plan sponsors, typically an employer, when medical claims pass a pre-designated threshold. Sneha S K, Reuters
Category:
E-Commerce
President Donald Trump signed an executive order Wednesday to impose his threatened 50% tariffs on Brazil, setting a legal rationale that Brazil’s policies and criminal prosecution of former President Jair Bolsonaro constitute an economic emergency under a 1977 law.Trump had threatened the tariffs July 9 in a letter to President Luiz Inacio Lula da Silva. But the legal basis of that threat was an earlier executive order premised on trade imbalances being a threat to the U.S. economy. But America ran a $6.8 billion trade surplus last year with Brazil, according to the U.S. Census Bureau.A statement by the White House said Brazil’s judiciary had tried to coerce social media companies and block their users, though it did not name the companies involved, X and Rumble.Trump appears to identify with Bolsonaro, who attempted to overturn the results of his 2022 loss to Lula. Similarly, Trump was indicted in 2023 for his efforts to overturn the results of the 2020 U.S. presidential election.Lula left an event about animal rights early on Wednesday after Trump’s move, saying he needed to defend “the sovereignty of the Brazilian people in light of the measures announced by the President of the United States.”The order would apply an additional 40% tariff on the baseline 10% tariff already being levied by Trump. But not all goods imported from Brazil would face the 40% tariff: Civil aircraft and parts, aluminum, tin, wood pulp, energy products and fertilizers are among the products being excluded.The order said the tariffs would go into effect seven days after its signing on Wednesday.Also Wednesday, Trump’s Treasury Department announced sanctions on Brazilian Supreme Court Justice Alexandre de Moraes over alleged suppression of freedom of expression and Bolsonaro’s ongoing trial.De Moraes oversees the criminal case against Bolsonaro, who is accused of masterminding a plot to stay in power despite his 2022 defeat.On July 18, the State Department announced visa restrictions on Brazilian judicial officials, including de Moraes. Josh Boak, Associated Press
Category:
E-Commerce
President Donald Trump has been getting his way on trade, strong-arming the European Union, Japan and other partners to accept once unthinkably high taxes on their exports to the United States.But his radical overhaul of American trade policy, in which he’s bypassed Congress to slam big tariffs on most of the world’s economies, has not gone unchallenged. He’s facing at least seven lawsuits charging that he’s overstepped his authority. The plaintiffs want his biggest, boldest tariffs thrown out.And they won Round One.In May, a three-judge panel of the U.S. Court of International Trade, a specialized federal court in New York, ruled that Trump exceeded his powers when he declared a national emergency to plaster taxes tariffs on imports from almost every country in the world. In reaching its decision, the court combined two challenges one by five businesses and one by 12 U.S. states into a single case.Now it goes on to Round Two.On Thursday, the 11 judges on the U.S. Court of Appeals for the Federal Circuit in Washington, which typically specializes in patent law, are scheduled to hear oral arguments from the Trump administration and from the states and businesses that want his sweeping import taxes struck down.That court earlier allowed the federal government to continue collecting Trump’s tariffs as the case works its way through the judicial system.The issues are so weighty involving the president’s power to bypass Congress and impose taxes with huge economic consequences in the United States and abroad that the case is widely expected to reach the U.S. Supreme Court, regardless of what the appeals court decides.Trump is an unabashed fan of tariffs. He sees the import taxes as an all-purpose economic tool that can bring manufacturing back to the United States, protect American industries, raise revenue to pay for the massive tax cuts in his “One Big Beautiful Bill,” pressure countries into bending to his will, even end wars.The U.S. Constitution gives the power to impose taxes including tariffs to Congress. But lawmakers have gradually relinquished power over trade policy to the White House. And Trump has made the most of the power vacuum, raising the average U.S. tariff to more than 18%, highest since 1934, according to the Budget Lab at Yale University.At issue in the pending court case is Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs without seeking congressional approval or conducting investigations first. Instead, he asserted the authority to declare a national emergency that justified his import taxes.In February, he cited the illegal flow of drugs and immigrants across the U.S. border to slap tariffs on Canada, China and Mexico. Then on April 2 “Liberation Day,” Trump called it he invoked IEEPA to announce “reciprocal” tariffs of up to 50% on countries with which the United States ran trade deficits and a 10% “baseline” tariff on almost everybody else. The emergency he cited was America’s long-running trade deficit.Trump later suspended the reciprocal tariffs, but they remain a threat: They could be imposed again Friday on countries that do not pre-empt them by reaching trade agreements with the United States or that receive letters from Trump setting their tariff rates himself.The plaintiffs argue that the emergency power laws does not authorize the use of tariffs. They also note that the trade deficit hardly meets the definition of an “unusual and extraordinary” threat that would justify declaring an emergency under the law. The United States, after all, has run trade deficits in which it buys more from foreign countries than it sells them for 49 straight years and in good times and bad.The Trump administration argues that courts approved President Richard Nixon’s emergency use of tariffs in a 1971 economic crisis. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language used in IEEPA.In May, the trade court rejected the argument, ruling that Trump’s Liberation Day tariffs “exceed any authority granted to the President” under the emergency powers law.“The president doesn’t get to use open-ended grants of authority to do what he wants,” said Reilly Stephens, senior counsel at the Liberty Justice Center, a libertarian legal group that is representing businesses suing the Trump administration over the tariffs.In the case of the drug trafficking and immigration tariffs on Canada, China and Mexico, the trade court ruled that the levies did not meet IEEPA’s requirement that they “deal with” the problem they were supposed to address.The court challenge does not cover other Trump tariffs, including levies on foreign steel, aluminum and autos that the president imposed after Commerce Department investigations concluded that those imports were threats to U.S. national security.Nor does it include tariffs that Trump imposed on China in his first term and President Joe Biden kept after a government investigation concluded that the Chinese used unfair practices to give their own technology firms an edge over rivals from the United States and other Western countries. Paul Wiseman, AP Economics Writer
Category:
E-Commerce
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