CIGNA Corporation (NYSE:CI) has lost 14% of its value since agreeing to buy ExpressScripts Holding Co (NASDAQ:ESRX) on March 8.

The run may be ending, as the shares lost just o$2 per share in the March 19 stock market carnage, but overall shareholders have lost about $6 billion. ExpressScripts, meanwhile, is down about 10%.

It’s not all about the price Cigna is paying, which along with debt came to $67 billion.  It’s the very idea that buying the biggest middleman in prescriptions is worth it for one of the smaller insurers, now that all its competitors have their own Pharmacy Benefit Managers (PBMs).

Thus Cigna CEO David Cordani was forced to go on TV to support the deal, calling it a “broadening of capabilities” that will “lower health care costs,” that will be “accretive to shareholders.” He also pointed out that the company would be well positioned to become the “partner of choice” for Amazon.com, Inc. (NASDAQ:AMZN) if it enters the healthcare market.

A Skeptical Market

The market seems to agree with the analysis I wrote March 9. Cigna is simply late to the party  and is paying the price.

While companies like Valeant Pharmaceuticals Intl Inc (NYSE:VRX) were able to abuse PBMs like ExpressScripts by using a “dispensing pharmacy” that existed solely for the purposes of getting Valeant paid, the real purpose of a PBM is to hold down drug costs through formularies and hard bargaining.

Scandals like that of Valeant were possible because of “rebates,” a strategy that still exists, paying the channel to take the drugs.  All that’s happening now is that these rebates are being called “programs” and being sent down the channel, directly to consumers.

The end of the rebates scheme means that a PBM’s market is now defined entirely by its deal flow. And for ExpressScripts, deal flow has not been increasing because health insurers are taking the business in-house, copying the strategy UnitedHealth Group Inc (NYSE:UNH) deployed after it bought Catamaran in 2015.

Investors are now rightly asking how ExpressScripts is going to maintain its market-leading deal flow when tied to a market-lagging health insurer. Saying Cigna is going to pull its orders from UnitedHealth’s Catamaran doesn’t add up.

Cordani’s claim that Amazon might tie up with his group was also made with scant evidence. But there are reporters and analysts suggesting that Amazon might buy Cigna.

Waiting for the Dust to Settle for Cigna

Amazon or (more likely) Berkshire Hathaway Inc. (NYSE:BRK.A) could eventually buy the Cigna-ExpressScripts combination, but that would only happen after the deal’s true value has become clear. Right now, the combined value is said to be over $100 billion, when the $67 billion being paid out is added to Cigna’s $41 billion market cap.

That’s unlikely to be the true price.

A health insurer tied to a PBM may deliver savings in the channel, linking drug companies to wholesalers, but there are bigger, and better, savings to be had at the point of sale, at the pharmacies and in front-line care.

While CVS Health Corp. (NYSE:CVS) and Aetna Inc. (NYSE:AET) are both down from where they were when they announced their own tie-up on December 3, that’s partly due to Administration pushback.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN.