Competition Bureau launches investigation into Express Scripts Canada

Canada’s federal competition watchdog has launched an investigation into Express Scripts Canada (ESC), a company that provides processing services for insurance providers and pharmacies, after a pharmacists group accused the corporation of anti-competitive conduct.

The Mississauga-based company is the nation’s largest pharmacy benefit manager (PBM), which is a type of business that acts as a third-party intermediary between the pharmacy and the insurance provider. The service allows pharmacists to submit electronic claims on the patients’ behalf so they don’t have to deal directly with the insurer or pay out-of-pocket.

Express Scripts Canada also operates four mail-order pharmacies in Canada.

The company came under increased scrutiny last year after it imposed a non-optional service fee on pharmacies across the country. That decision drew the ire of the Canadian Pharmacists Association (CPhA) who in a complaint filed with the Competition Bureau, accused ESC of exploiting its dominant position in the PBM market to force “unfair” terms and agreements on pharmacies with “little room for negotiation.”

“By dictating terms to pharmacies, ESC effectively limits the choices and accessibility of health-care services for Canadians,” CPhA said in a statement. “This not only restricts competition, but also undermines the foundational principles of equity and access in the Canadian health-care system.”

ESC is a subsidiary of the U.S.-based Express Scripts, which is owned by the Cingna Group, a global for-profit health company.

On Friday, the Competition Bureau received a federal court order to advance its investigation, which will focus on allegations of patient steering and margin squeezing from retail pharmacies and competitors. The order will require ESC to provide records and other information to the Bureau, as well as oral testimony.

“There is no conclusion of wrongdoing at this time,” the agency explained in a press release.

The investigation was welcomed by the Canada Pharmacists Association, who called it “an important step toward greater accountability.”

“PBMs have operated unchecked for far too long,” CPhA Vice-President Joelle Walker said in a statement. “We filed this complaint on behalf of over 40,000 pharmacists in over 12,000 pharmacies across Canada who show up every day to deliver essential health care.”

“This is a clear signal that Canadian regulators are prepared to examine practices that may be harming competition and limiting access to care — and we’re proud to support that effort,” Walker added.

Express Scripts Canada did not respond to a request for comment.