The Competition Bureau has secured a court order to compel Express Scripts Canada to provide records and testimony as part of an ongoing investigation into whether its business practices limit competition in the retail pharmacy sector.
The probe is examining concerns that Express Scripts Canada may be engaging in anti-competitive conduct, including steering patients toward pharmacies it owns or is affiliated with — potentially reducing consumer choice — and imposing fee structures and audit demands that could undermine competing pharmacies’ profitability.
Specifically, the Bureau is looking at the company’s use of Preferred Provider Networks, which may force or induce Canadians to fill prescriptions through Express Scripts Canada’s mail-order pharmacies, rather than their preferred local provider. It is also scrutinizing whether the company’s Pharmacy Benefit Manager (PBM) service fees and audit processes amount to “margin squeezing,” which could harm competitors by reducing their operating margins.
The conduct is being investigated under the restrictive trade provisions of the Competition Act, which prohibit abuse of dominance and agreements that hinder competition. There is no conclusion of wrongdoing at this time, the Bureau said.
Express Scripts Canada to provide records and testimony
The Federal Court order requires Express Scripts Canada to produce documents, written information, and oral testimony relevant to the investigation. The company operates four mail-order pharmacies across Canada, excluding Quebec, and processes prescription drug claims for insurers and pharmacists.
Express Scripts Canada is a subsidiary of U.S.-based Express Scripts, which is owned by the Cigna Group, a global health company.
Background on PBMs and preferred networks
Pharmacy Benefit Managers act as intermediaries between insurers, pharmacists, and plan sponsors by managing prescription drug benefits. Preferred Provider Network agreements aim to direct plan members to select pharmacies, typically in exchange for lower costs or simplified administration for insurers.
The Competition Bureau said it is committed to ensuring that Canadians have access to competitive options in the pharmacy sector and continues to monitor this market closely.
