The Federal Trade Commission has filed a proposed order settling charges that e-prescribing giant Surescripts used anticompetitive business practices to monopolize two e-prescription drug markets.
The order follows on the heels of a prior federal court ruling which concluded that Surescripts had a near-complete monopoly on e-prescribing services, having built up a controlling a 95% “supershare” of the e-prescribing market.
The FTC originally targeted Surescripts in April of 2019, alleging in its suit that the company had engaged in illegal tactics which allowed it to establish and maintain monopolies of two e-prescribing markets, routing, and eligibility.
In its suit, the agency asserted that Surescripts had intentionally put strategies in place to keep e-prescribing customers in the two markets locked into using Surescripts rather than competing platforms.
According to the FTC, Surescripts kept customers in place by using a number of aggressive approaches, including anti-competitive exclusivity agreements and threats.
The proposed order calls for a 20-year term during which Surescripts would be forbidden from engaging in the anticompetitive activities the FTC alleged were taking place. This will include not only having Surescripts taking steps to pull back from its control of routing and eligibility, but alter its behavior in the medication history services and on-demand formulary services niches.
The proposed order includes the following demands aimed at unwinding practices that helped Surescripts capture such a large share of key markets.
For example, under the proposed order, Surescripts will not be allowed to enter into, maintain, or enforce contracts that impose a majority share requirement (such as exclusivity or loyalty agreements) on its routing and eligibility customers.
The e-prescriber would also be blocked from discriminating against or threatening customers who wouldn’t agree to a majority share requirement.
The e-prescribing giant would also be barred from putting other problematic contract provisions. According to the FTC, Surescripts put these provisions in place to prevent or limit customers’ ability to work with its competitors.
The order would also forbid Surescripts from preventing customers from promoting competitors’ services and preventing or limiting customers’ ability to communicate with competitors.
In addition, the order would free up vendors in the medication history and on-demand formulary services market from anticompetitive practices Surescripts might try to put in place.
Not only that, the order would bar Surescripts from entering into or enforcing any employee non-compete agreement with current and former employees that would prevent the employees from working for a competing e-prescribing service provider.
In a public statement responding to the news of its FTC settlement, Surescripts argued that the FTC’s case had relied on “significant factual errors” about Surescripts’ business and mischaracterizations about the financial realities of the e-prescribing business.
The company also noted, by way of pushing back against the FTC allegations, that since 2009, it had reduced average e-prescribing transaction fees by 77% and that since 2016, it had improved accuracy of e-prescriptions by more than 200%, company leaders said.
