Competition Bureau Canada announced that it obtained a Federal Court court order requiring Express Scripts Canada to provide records, written information, and oral testimony relevant to the agency’s investigation into the company’s business practices in the pharmacy sector.
The Competition Bureau said in its news release that it is investigating Express Scripts Canada’s conduct under the restrictive trade provisions of the Competition Act, 1985.
The Competition Bureau explained that these provisions seek to safeguard Canadian consumers and businesses against restrictive trade practices, including abuse of dominance and agreements or arrangements between businesses, that can potentially harm competition.
Specifically, the Competition Bureau said it is assessing the allegations of anti-competitive conduct on the part of Express Scripts Canada that can prevent or limit competition within the pharmacy retail market, including:
- patient steering via preferred provider networks (PPN) forcing or inducing Canadians to use pharmacies owned by Express Scripts Canada or associated with the company rather than their preferred pharmacy
- margin squeezing, which aims to narrow the margins of its retail pharmacy competitors by raising its pharmacy benefit manager (PBM) service fee and by imposing a costly and burdensome audit process
The Competition Bureau noted that there were no findings of wrongdoing at this point.
Express Scripts Canada is a subsidiary of US-based Express Scripts. Cigna Group, a US-based global health company, owns Express Scripts, the Competition Bureau’s news release said.
Express Scripts Canada offers prescription drug claim processing services and other services for insurance providers and pharmacists and operates four mail-order pharmacies across Canada except in Quebec, the Competition Bureau’s news release added.
The Competition Bureau’s news release explained that a PBM provides prescription drug claim processing services for insurance providers and pharmacists.
On the other hand, a PPN agreement identifies a specific insurance provider’s preferred pharmacies. The agreement requires or encourages insured individuals to fill prescriptions from a pharmacy operator within the insurance provider’s network, the Competition Bureau’s news release said.
The Competition Bureau, an independent law enforcement agency, seeks to promote competition in the pharmacy sector and, more generally, protect competition for the benefit of Canadian consumers and businesses.
The Competition Bureau’s news release noted that competition leads to increased innovation, decreased prices, and boosted economic growth.