Competition Bureau Secures Court Order to Investigate Express Scripts Canada
In a significant move to address concerns over anti-competitive practices in Canada’s pharmacy sector, the Competition Bureau has obtained a Federal Court order to investigate Express Scripts Canada (ESC). This step, taken in April 2025, compels ESC to provide records, written information, and oral testimony as part of the ongoing probe.
ESC, a subsidiary of the global health company Cigna Group, operates as a major player in prescription drug claim processing and mail-order pharmacy services. Its network spans four mail-order pharmacies across Canada, excluding Quebec. The Bureau’s investigation focuses on two key allegations: “patient steering” and “margin squeezing.”
Patient Steering and Margin Squeezing: Understanding the Allegations
The first allegation centers on “patient steering,” where ESC may be using its “Preferred Provider Networks” to direct patients to its own pharmacies or affiliated providers. This practice could limit consumer choice and unfairly consolidate market power within ESC’s network.
The second allegation involves “margin squeezing,” where ESC may be restricting the profitability of rival pharmacies. This could occur through increased service fees for pharmacy benefit management or by imposing costly and burdensome audit processes on competitors.
A Call for Accountability in the Pharmacy Sector
The investigation, conducted under the restrictive trade provisions of Canada’s Competition Act, aims to assess whether ESC’s practices constitute an abuse of dominance or anti-competitive agreements. The Bureau emphasizes that no wrongdoing has been concluded at this stage, with the probe focused on gathering facts and ensuring compliance with the law.
The Canadian Pharmacists Association (CPhA), representing over 40,000 pharmacists nationwide, filed the original complaint against ESC in February 2024. The association has long raised concerns about the growing influence of pharmacy benefit managers (PBMs) like ESC, which they argue have operated with limited oversight.
“PBMs have operated unchecked for far too long, and this investigation marks an important step toward greater accountability,” said Joelle Walker, Vice President of Public and Professional Affairs at CPhA. “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.”
With the court order in place, ESC is now required to cooperate fully with the investigation, providing all relevant documentation and testimony. The outcome of this probe could have far-reaching implications for the pharmacy sector, potentially shaping the regulatory landscape for healthcare services across Canada.
Express Scripts Canada Investigation: A Deeper Dive
The Competition Bureau’s investigation into Express Scripts Canada (ESC) marks a significant step in addressing anti-competitive practices within Canada’s pharmacy sector. As a subsidiary of the global health giant Cigna Group, ESC’s influence extends across four mail-order pharmacies nationwide, excluding Quebec, processing prescription drug claims and providing services to insurers and pharmacists.
Understanding the Mechanisms of Patient Steering and Margin Squeezing
Central to the investigation are allegations of “patient steering” and “margin squeezing.” Patient steering involves ESC potentially using its Preferred Provider Networks to direct patients to its affiliated pharmacies, limiting consumer choice and consolidating market power. This practice could undermine competition by funneling patients away from independent pharmacies, thereby reducing their market share and viability.
Margin squeezing, on the other hand, involves ESC allegedly restricting rival pharmacies’ profitability. This could be achieved through increased service fees for pharmacy benefit management or by imposing costly and burdensome audit processes. Such tactics could create barriers for competitors, making it difficult for them to operate profitably and sustain their businesses.
Legal Framework and Implications
The investigation is conducted under the restrictive trade provisions of the Competition Act, which aim to prevent abuse of dominance and anti-competitive agreements. These provisions are crucial in ensuring a fair market, where no single entity can exert undue influence to the detriment of others. The Bureau’s probe will assess whether ESC’s practices violate these laws, potentially leading to significant legal consequences if wrongdoing is found.
The Role of the Canadian Pharmacists Association
The Canadian Pharmacists Association (CPhA), representing over 40,000 pharmacists, filed the complaint against ESC, highlighting concerns about the unchecked power of pharmacy benefit managers. Their involvement underscores the broader implications of this investigation for pharmacists and patients nationwide, emphasizing the need for transparency and fairness in the sector.
Next Steps and Potential Outcomes
With the court order in place, ESC is compelled to cooperate fully, providing all necessary documentation and testimony. The investigation’s outcome could reshape the regulatory landscape, influencing how pharmacy benefit managers operate and interact with competitors. This probe not only addresses potential wrongdoings but also sets a precedent for future oversight in the healthcare sector.
As the investigation unfolds, stakeholders across Canada’s pharmacy sector will closely watch the developments, recognizing the potential for this case to bring about meaningful change in promoting competition and consumer choice.
Conclusion
The Competition Bureau’s investigation into Express Scripts Canada (ESC) is a pivotal moment in addressing anti-competitive practices within Canada’s pharmacy sector. The allegations of patient steering and margin squeezing raise significant concerns about market fairness and consumer choice. As the investigation progresses, the potential outcomes could reshape the regulatory landscape for pharmacy benefit managers, ensuring a more competitive and equitable environment for all stakeholders. The involvement of the Canadian Pharmacists Association underscores the broader implications for pharmacists and patients nationwide, highlighting the need for transparency and accountability in the healthcare sector.
Frequently Asked Questions (FAQs)
What is the Competition Bureau investigating Express Scripts Canada for?
The Competition Bureau is investigating Express Scripts Canada (ESC) for alleged anti-competitive practices, specifically patient steering and margin squeezing, which may harm competition in the pharmacy sector.
What is patient steering?
Patient steering refers to the practice of directing patients to specific pharmacies, often affiliated with the company, potentially limiting consumer choice and consolidating market power.
What is margin squeezing?
Margin squeezing involves practices that restrict rival pharmacies’ profitability, such as increased service fees or burdensome audit processes, creating barriers for competitors.
What is the role of the Competition Act in this investigation?
The Competition Act’s restrictive trade provisions aim to prevent abuse of dominance and anti-competitive agreements, ensuring a fair market where no single entity can exert undue influence.
Who filed the complaint against Express Scripts Canada?
The Canadian Pharmacists Association (CPhA), representing over 40,000 pharmacists, filed the complaint, highlighting concerns about the unchecked power of pharmacy benefit managers.
What are the potential outcomes of the investigation?
The investigation could lead to legal consequences for ESC if wrongdoing is found, reshape the regulatory landscape, and set a precedent for future oversight in the healthcare sector.
How does this investigation affect patients and pharmacists?
The investigation aims to promote competition and consumer choice, which could lead to better services and fairness for patients and pharmacists across Canada.
