Key takeaways:
- Canada’s Competition Bureau has launched an investigation into Express Scripts, Cigna’s pharmacy benefit management (PBM) subsidiary.
- The probe aims to examine Express Scripts’ alleged anti-competitive business practices in the pharmacy sector.
- The investigation comes amid growing scrutiny and concerns over the role of PBMs in driving up prescription drug costs.
Detailed Analysis
Canada’s Competition Bureau has obtained a court order to advance an investigation into Express Scripts Canada, a company that provides prescription drug management services. The probe, announced on Friday, aims to examine Express Scripts’ alleged anti-competitive business practices in the pharmacy sector.
Express Scripts, acquired by health insurer Cigna in 2018 for $54 billion, is the largest pharmacy benefit manager (PBM) in the United States. PBMs act as intermediaries between drug manufacturers, health insurance providers, and pharmacies, negotiating prices and managing prescription drug plans for employers and insurers.
The move by Canadian regulators comes amid growing scrutiny and concerns over the role of PBMs in driving up prescription drug costs. Critics argue that the lack of transparency in the PBM industry has contributed to the rising prices of medications, as PBMs take a cut from every transaction and have an incentive to favor higher-cost drugs.
In the United States, express Scripts and other major PBMs such as CVS Caremark and OptumRx have faced multiple lawsuits and investigations over alleged anti-competitive practices. These include accusations of overcharging health plans, favoring more expensive drugs in exchange for kickbacks from pharmaceutical companies, and steering patients to higher-cost pharmacies.1
While the details of the Canadian investigation have not been disclosed, it is likely that regulators are examining similar concerns about Express Scripts’ business practices and their impact on competition and drug prices in the Canadian market.
Conclusion
The investigation by Canada’s Competition Bureau underscores the growing regulatory scrutiny faced by PBMs worldwide. As these intermediaries play an increasingly influential role in the pharmaceutical supply chain, their lack of transparency and potential conflicts of interest have raised concerns about their impact on drug affordability and access.
For retail investors, the probe could have significant implications for Cigna and the broader healthcare sector. A finding of anti-competitive practices could lead to fines, changes in business practices, and increased oversight, potentially impacting Cigna’s bottom line and the future of the PBM model. Investors will be closely watching the developments of this investigation and any subsequent regulatory actions.
References
1 Canada launches probe into Cigna’s Express Scripts. Reuters. Retrieved April 11, 2025.
2 Canada launches probe into Cigna’s Express Scripts. Yahoo Finance. Retrieved April 11, 2025.
3 Competition Bureau advances an investigation into Express Scripts …. Government of Canada. Retrieved April 11, 2025.
4 Canada launches antitrust probe into Cigna’s Express Scripts unit. MarketScreener. Retrieved April 11, 2025.
5 Competition Bureau advances an investigation into Express Scripts …. Yahoo Finance. Retrieved April 11, 2025.
6 Canada launches antitrust probe into Cigna’s Express Scripts unit. MarketScreener. Retrieved April 11, 2025.
7 Prescription drug middleman under federal investigation. Western Standard News. Retrieved April 11, 2025.
8 Exclusive: HSBC explores private credit push, sources say. Reuters. Retrieved April 11, 2025.
9 European Commission plans emergency measures to combat bird flu in Poland. SRN News. Retrieved April 11, 2025.
10 Express Scripts. Wikipedia. Retrieved April 11, 2025.
