Glenview, which has been an investor in Cigna for a decade, said it has nearly $1.3 billion stake in Cigna and Express Scripts, split almost evenly between the two companies.
The hedge fund said it purchased a significant stake in Express Scripts and increased its investment in Cigna following the $52 billion deal announcement in March.
"Contrary to the sensationalist rhetoric of those pushing personal agendas, PBMs combat drug price inflation and encourage better pharmaceutical adherence," Glenview said, adding the deal would strengthen Cigna's growth prospects.
PBMs have come under increasing scrutiny in the drug pricing debate, with the Trump administration proposing a rule that would scale back protections in place that allow rebates between drug manufacturers, insurers and PBMs.
Rebates have been cited as one of the reasons for escalating drug prices, but PBMs such as CVS Health have downplayed its importance to their business.
Express Scripts shares rose 3.4 percent to $81.57, while Cigna shares fell 1.8 percent to $186.06.
Icahn, who has a 0.56 percent stake in Cigna, on Tuesday made public his opposition to the health insurer's deal, citing regulatory hurdles and the growing threat from Amazon.
"Everyone wants drug prices lower — it is a bipartisan issue. I have little doubt that legislation will ultimately be passed to do away with rebates," Icahn said in a letter on Thursday.
The 82-year-old billionaire has also highlighted the rising threat of Amazon, which in June bought small online pharmacy PillPack, putting the world's biggest online retailer in direct competition with drugstore chains, drug distributors and PBMs.
Last week, Cigna said it was confident it would secure shareholder approval for the deal. The vote is set for Aug. 24.
The insurer also said on Tuesday it strongly disagrees with Icahn.
"Mr. Icahn has made clear through his recent and limited entry into Cigna stock and 'substantial' short position in Express Scripts that his motives are not aligned with Cigna's shareholders and he has no interest in creating value for shareholders (other than himself)."
(Reporting by Ankur Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta and Arun Koyyur)
By Ankur Banerjee