Canada’s largest pharmacy benefit manager is being investigated by federal anti-trust regulators over concerns about anti-competitive practices.
The Competition Bureau, in a Federal Court affidavit, is examining whether Express Scripts Canada Services (ESC) of Mississauga, Ont., holds a dominant market position and engages in unfair business tactics.
“The inquiry seeks to determine whether ESC is dominant in a market and whether it is engaging in a practice of anti-competitive acts,” the affidavit stated. ESC operates mail-order pharmacies in British Columbia, Manitoba, Ontario, and New Brunswick while managing prescription claims for insurers across the country.
Pharmacy benefit managers like ESC process electronic billing for prescriptions, allowing patients to pay only the portion not covered by insurance.
“Electronic billing has become commonplace in the market, so much so that patients have come to expect it at their pharmacy,” Competition Bureau lawyers wrote in the affidavit.
The Bureau’s investigation, which began on November 14, follows a similar probe launched by the U.S. Federal Trade Commission in 2023. ESC, a subsidiary of U.S.-based Cigna Group, describes itself as “a leading health benefits manager in Canada.”
Cigna reported US$247.1 billion in revenue last year.
Regulators are examining two key allegations against ESC: patient steering, in which agreements push patients toward ESC-affiliated pharmacies instead of their preferred pharmacy, and margin squeezing, which increases service fees for pharmacies while imposing costly audits that impact competitors’ profitability.
“When patients get steered to an Express Scripts Canada pharmacy, unaffiliated pharmacies are allegedly harmed,” the affidavit stated. “They lose market share and revenues.”
Competition Bureau lawyers have asked a federal judge to compel ESC to disclose confidential business records as part of the ongoing investigation.
The allegations remain unproven.