The Federal Trade Commission (FTC) and Surescripts have reached a settlement over the regulator’s claims that the health tech company was excluding competitors from certain e-prescribing markets and enforcing non-compete agreements among employees, according to Thursday releases from both parties.
The FTC had filed its complaint in April 2019, kicking off years of legal contests that culminated in a March 2023 order from the court granting the commission’s motion for partial summary judgment and referring the dispute to mediation.
The commission’s complaint alleged that Surescripts had employed "illegal vertical and horizontal restraints in order to maintain its monopolies over two e-prescribing markets: routing and eligibility." It did so via a combination of anticompetitive exclusivity agreements, threats and other exclusionary tactics, the regulator alleged, while taking steps to increase costs.
The FTC’s release highlighted a “favorable federal court ruling that found that Surescripts possess monopoly power in e-prescribing services with a 95% ‘supershare.’”
The regulator noted that the court’s opinion “made important clarifications of the law, including on the establishment of monopoly power through market share and barriers to entry” that could affect future antitrust cases.
“The FTC will not hesitate to take action in enforcing the antitrust laws to protect health care consumers,” Holly Vedova, director of the FTC’s Bureau of Competition, said in a release. “The proposed order is a victory in creating a fair and competitive playing field in the e-prescription drug market.
Surescripts’ announcement, meanwhile, highlighted the settlement’s lack of monetary penalties as well as the FTC’s “significant factual errors about Surescripts’ business and mischaracterizations about the economic realities of the e-prescribing market.”
“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,” CEO Frank Harvey said in a release. “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 proposed order agreed to by the parties and filed Wednesday would run for 20 years and prohibit Surescripts from the various exclusionary conduct alleged in the case, both within the routing and eligibility markets as well as across Surescripts’ medication history services and on-demand formulary services.
It would also bar Surescripts “from entering into or enforcing any employee non-compete agreement with current and former employees that would prevent those employees from working for a competing e-prescribing service provider,” the FTC said.
Commissioners voted 3-0 to authorize the proposed order, which still requires approval from the court.
The FTC’s original complaint noted that Surescripts’ routing and eligibility transactions saw “explosive growth” from 70 million in 2008 to more than 1.7 billion in 2017, which it attributed to its anticompetitive tactics.
Surescripts, in its settlement announcement, pushed back with claims that its platform and services have reduced the average e-prescribing transaction fee by 77% since 2009. Electronic prescription accuracy has also improved by 20% since 2016, it said.
“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,” Harvey said in the release. “We look forward to continuing to simplify health intelligence sharing and bring even greater innovation and experience to the healthcare industry.”
The settlement is a feather in the cap of the FTC, which has recently ramped up its efforts to tackle antitrust concerns across several corners of the healthcare industry. Those challenges haven’t always panned out, as was the case earlier this year when the regulator dropped its litigation to block UnitedHealth Groups’ acquisition of Change Healthcare.