- The Federal Trade Commission said Wednesday it is suing Surescripts, accusing the health IT vendor of acting illegally to maintain monopolies in electronic prescription markets for routing orders from providers to pharmacies and for determining patient eligibility for coverage of the drugs.
- The commission alleges Surescripts, owned by Express Scripts, CVS Health and two big trade groups, used exclusivity agreements and threats to stop customers from using other e-prescribing platforms and maintain at least a 95% share in both markets for a decade, according to a complaint filed in the United States District Court for the District of Columbia.
- In its latest annual report, released this week, Surescripts said it processed 1.77 billion transactions last year, a nearly 30% increase from the year before, and touted connections to "virtually all" EHR vendors, pharmacy benefit managers, pharmacies and clinicians. In a statement provided to Healthcare Dive, Surescripts CEO Tom Skelton said the company is cooperating with the investigation and has "operated fairly" for more than 18 years.
The case touches on some of the biggest players in pharmacy management. Surescripts is now owned by pharmacy retail giant CVS (which recently acquired Aetna and runs the PBM Caremark), Express Scripts, the National Community Pharmacists Association and the National Association of Chain Drug Stores. Express Scripts, recently acquired by Cigna, holds the largest Surescripts stake at 33%.
Skelton said Surescripts is removing loyalty provisions in its contracts. "This step addresses one of the FTC's chief concerns while reflecting the current dynamics of the healthcare industry and the state of electronic prescribing today," he said.
FTC said in a press release Wednesday the lawsuit "is the latest example of the agency's commitment to stopping anticompetitive tactics in the health care industry that harm consumers and raise the cost of care for Americans." It touted recent cases against Teva Pharmaceuticals, Impax Laboratories and AbbVie.
In its complaint, FTC describes a cutthroat approach from Surescripts to eliminate threats from rivals, dating back to the early 2000s. Over that period, use of e-prescribing has surged, spurred on by incentives from the federal government. Patients and providers like the convenience of forgoing paper prescriptions and extra trips to obtain medication.
FTC said it is asking the court to force Surescripts to stop its monopolistic activities and "provide monetary redress" to consumers. "Surescripts's illegal contracts denied customers and, ultimately, patients, the benefits of competition — including lower prices, increased output, thriving innovation, higher quality, and more customer choice," Bureau of Competition Director Bruce Hoffman said in the press release.
Surescripts links EHRs with pharmacies on one side and PBMs on the other. The complaint details some methods Surescripts allegedly used to freeze out potential competitors.
The company obtained a noncompete promise from up-and-coming rival RelayHealth, a subsidiary of McKesson, in 2003. It then maintained and strengthened the noncompete agreement in contract renewals in 2010 and 2015.
Surescripts used similar tactics to lock up EHR vendor Allscripts, which lamented it had no choice but to agree to the stiff requirements to have access to the PBMs and pharmacies connected to Surescripts, according to the complaint.
Surescripts also avoided competition from rival health IT company Emdeon by raising costs for its customers to use additional platforms, known as multihome.