Amazon may sue Surescripts after the threat of cutting PillPack data

A little over a year after the purchase of the $ 753 million PillPack online pharmacy, Amazon is engaged in a fierce battle with a historic player in the pharmacy sector. According to sources, CNBC is working behind the scenes to prevent the company from accessing important patient data.

PillPack's pharmacy delivery service relies on his access to a specific list of his patients' medications. It can properly inform patients of health and safety risks, discover duplicate subscriptions, and help track the number of renewals. This complete data comes indirectly from Surescripts, an electronic prescription company owned by some of PillPack's potential competitors, including CVS and Express Scripts.

According to two people familiar with the matter, PillPack was informed this week that it will soon be no longer allowed to access this data through a third party entity, ReMy Health, which decision could seriously complicate its activities. Amazon is considering suing Surescripts for an end to these efforts, said the people, who asked not to be identified because their deliberations were confidential. One person told CNBC that PillPack had already sent a letter of termination and abstention to Surescripts.

This is the latest in a series of conflicts between Amazon and established pharmacy companies since its purchase of PillPack in June 2018 – a transaction that caused the collapse of pharmacy owner's shares. and pharmaceutical benefit managers. Last month, CVS filed a lawsuit against a former employee after he announced to the company that he would hold a position at PillPack. A judge prevented the employee from working for PillPack for 18 months.

Prescription drug spending in the United States is around $ 500 billion a year and the sector has long been controlled by a handful of key players who manage prices and access to medicines. Amazon's entry into the market poses a serious threat to the status quo by providing the e-commerce giant with relationships with health insurers and licenses to send orders to all states, with the exception of Hawaii.

The current imbroglio shows the entangled nature of the pharmacy network and the difficulty with which incumbent operators strive to maintain control of the data and to stem a competitive threat.

Surescripts handles about 80% of all US prescriptions. It is such a dominant force that in April, the Federal Trade Commission sued the company, alleging an "illegal monopolisation of the electronic prescription markets". Surescripts said last week that the FTC's complaint "was making important factual errors" about its business and the market, and filed a motion to dismiss the case.

PillPack does not contract directly with Surescripts for patient medication information, but goes through ReMy, which compiles the raw data from Surescripts, cleans them and delivers them to clients via an application programming interface.

Because PillPack does not have a contract with Surescripts, its communication was done with ReMy. This week, ReMy said it will stop working with PillPack in the next few days, people familiar with the subject said. Businesses started working together in 2017, people said.

"PillPack is collaborating productively with healthcare industry partners to help US users gain a better pharmacy experience," said Jacquelyn Miller, spokesperson for PillPack. "While we are not surprised when powerful incumbent operators are trying to undermine these efforts, we are confident that our collaborative approach to providing customers with more choice, more convenience and improved quality will ultimately prevail."

Surescripts said in a statement that he was committed to privacy and security and that his medication history "can say a lot about the health status of an individual , including the most sensitive state of health ".

"PillPack does not agree with Surescripts that in any way covers the use of this important protected health information," the statement said. Suresripts added that his portfolio did not include "any companies for which we are the source of the drug history for retail pharmacies".

Surescripts said its board of directors, made up of executives from CVS and Cigna, had only been made aware of the problem after a CNBC survey.

PillPack, in response, indicated that he had contracts in place to manage protected health information as an accredited pharmacy.

"The prescription history is only requested with the client's agreement, and is subject to the same data processing standards as all the health-related information of the patients being treated by PillPack," Miller said. . "In addition, PillPack is a covered entity, identical to a doctor's office, and is bound by all the laws on the protection of medical data."

Without access to Surescripts data, PillPack would lose the digital history of patients and should probably call each one of them over the phone to check the list of their various medications and illnesses. This is complicated because many of his patients consult several doctors and take many medications that it might be difficult to track. A spokesperson for PillPack told CNBC that on average, his clients were taking seven medications a day.

Such a process would be time consuming and risky for patients who may not remember everything, said Stephen Buck, co-founder of health technology company Courage Health and former leader of the health care chain. Supply of medicines. Buck did not have a direct knowledge of the situation.

"By preventing patients from obtaining their own data or by allowing pharmacies to obtain this data, health care becomes more expensive and sometimes dangerous when a pharmacy does not have complete patient histories. in terms of drugs, "said Buck.

This is not the first time that PillPack has to face historical operators.

Prior to its acquisition by Amazon, the company was involved in a dispute with Express Scripts related to a possible breach of contract. The problem was solved after Express Scripts decided not to cut PillPack off its network.

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