FTC, Surescripts Settle Illegal Monopoly Complaint

The settlement comes after a federal court determined that Surescripts holds a 95% 'supershare' for e-prescribing services.

The Federal Trade Commission announced Thursday that it has reached a settlement with Surescripts that bans the health information technology provider from illegal monopolistic business practices and demanding non-compete agreements with employees.

The FTC sued Surescripts in 2019, alleging that the Arlington, VA-based company used "illegal vertical and horizontal restraints" to maintain e-prescribing monopolies over routing and eligibility markets.

The settlement, which was approved by the Commission on a 3-0 vote, comes after a U.S. District Court ruling in Washington, D.C. that determined that Surescripts holds a 95% "supershare" of monopoly power in e-prescribing services.   

Surescripts CEO Frank Harvey welcomed the settlement, which included no fines, but claims that the FTC's case "relied on significant factual errors about Surescripts' business and mischaracterizations about the economic realities of the e-prescribing market."

FTC Bureau of Competition Director Holly Vedova says in a media release that "the proposed order is a victory in creating a fair and competitive playing field in the e-prescription drug market."

"In large part because of Surescripts' conduct, virtually everyone today who has a prescription filled electronically does so via the Surescripts networks."

"The proposed order would eliminate the anticompetitive restraints Surescripts has imposed on its customers since 2010 and would create conditions that allow competition to flourish for the benefit of anyone who gets a prescription filled at a pharmacy," Vedova says.

The FTC alleged in its complaint that Surescripts intentionally kept e-prescription routing and eligibility customers on both sides of each market from "multihoming" competing platforms, and using strongarmed "anticompetitive exclusivity agreements, threats, and other exclusionary tactics to achieve its goal."

A federal court this past March granted the FTC's motion for partial summary judgment and referred the suit to mediation.  

Surescripts Responds

Surescripts on Thursday issued the following statement from CEO Frank Harvey::

"Surescripts is proud to have pioneered electronic prescribing that has brought enormous value to patients and care providers alike. For more than two decades, Surescripts has delivered innovations that increase patient safety, lower costs and ensure quality care," Harvey says.

"We're pleased that this agreement brings an end to the FTC's litigation, formalizing changes to our business practices that we started several years ago, including the elimination of loyalty provisions in contracts. We are committed to continuous innovation and remain focused on serving our customers who make up the Surescripts Network Alliance and ultimately the patients they serve."

"The FTC's case relied on significant factual errors about Surescripts' business and mischaracterizations about the economic realities of the e-prescribing market," Harvey says. "Since 2009, Surescripts has reduced average E-Prescribing transaction fees by 77%, and since 2016, Surescripts has improved the accuracy of electronic prescriptions more than 200%.

"As a trusted health information network, Surescripts helps doctors, pharmacists and other healthcare providers communicate with each other as a team, sharing information to increase patient safety, lower costs and ensure quality care. We look forward to continuing to simplify health intelligence sharing and bring even greater innovation and experience to the healthcare industry."

Settlement Details

The FTC's proposed order has a 20-year term that would ban Surescripts from exclusionary conduct and expands the prohibitions beyond routing and eligibility to include Surescripts' medication history services and the company's on-demand formulary services.

The proposed order would prohibit Surescripts from:

• Entering, maintaining, or enforcing contracts that impose a majority share requirement on its routing and eligibility customers, including through all-unit discounting.
   
• Implementing other problematic provisions it has used in the past to prevent or limit the ability of customers to do business with Surescripts' competitors.
   
• Stopping customers from promoting competitors' services; preventing and limiting customers' ability to communicate with competitors; and requiring that customers provide Surescripts a right of first refusal.
   
• Entering into, maintaining, or enforcing agreements that prevent rivals from competing with Surescripts in routing and eligibility.
   
• Discriminating against or threatening customers who refuse to agree to a majority share requirement.
   
• Enforcing non-compete agreements that would prevent employees from working for a competing e-prescriber.