Surescripts is ending its service relationship with ReMy Health– a third-party professional that provided Amazon-acquired prescription shipment business PillPack with info about clients’ medications.

Company Expert Intelligence

Surescripts CEO Tom Skelton acknowledged in an e-mail to clients that an internal examination into ReMy’s practices showed up a “extremely little” quantity of doubtful activity. Nonetheless, Skelton stated Surescripts is severing ties with ReMy to keep the “stability of its network.”

This is a big blow to PillPack and will substantially restrict the online drug store’s capability to confirm users’ prescription info. The business will no longer have the ability to immediately confirm client prescription info– it will rather require to call each user to confirm their medications and does. And gathering that info from users might be tough for PillPack considering its clients are handling numerous prescriptions: PillPack users take 7 medications a day typically.

This is the most recent twist in a continuous legal legend heating up in between Surescripts and PillPack– and other health care incumbents attempting to fend off Amazon’s health care play.

  • April to June 2019: Courts bar previous CVS officer from taking a position at PillPack. CVS submitted a suit versus a previous officer at its drug store advantage management (PBM) arm CVS Caremark to avoid the person from using up a post at PillPack. The courts ultimately ruled in favor of CVS, obstructing the staff member from operating at PillPack for 18 months. It deserves keeping in mind that CVS is a partial owner of Surescripts, and CVS has officers on Surescripts’ board Furthermore, court files from the case exposed that PillPack has an interest in offering prescription drugs straight to health insurance and companies, which would put it in competitors not simply with retail drug stores, however likewise with business running in the $423 billion PBM market, which CVS Caremark held an excellent 30% share of in2018
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  • July 2019: Surescripts threatens to reject PillPack access to prescription info. PillPack was notified in early July that it would be losing gain access to to Surescripts’ chests of prescription info, sources informed CNBC. Surescripts handles 80% of all United States prescriptions, information that is vital for PillPack to be able to notify clients of health and wellness threats, prevent replicate scripts, and remain on top of refills. It makes good sense then why Amazon was apparently thinking about taking legal action against Surescripts when news of the possible information nothing initially appeared, provided there aren’t truly other alternatives for where PillPack can get the prescription information it requires to serve its clients.
  • July 2019: Surescripts revealed it would be turning its examination into ReMy Health’s presumably deceitful habits over to the FBI. Surescripts declares that ReMy accessed to prescription information under incorrect pretenses, declaring the info was going to health center suppliers when it was, in reality, being sent out to PillPack. For its part, PillPack stated that all ask for client medical info were made with total user approval.

Here’s what’s most likely to occur next in the Surescripts-PillPack disagreement and what it may indicate for Amazon’s health care play:

Amazon will likely make great on its reported risks of legal action and take legal action against Surescripts in an effort to bring back PillPack’s access to the prescription information it requires. Some have argued that Amazon might wish to prevent a legal fight with Surescripts over its information gain access to policies, as such an action might draw undesirable attention to Amazon’s own unethical efforts to lock out rivals from user info.

Nevertheless, provided the huge hazard a Surescripts blackout would posture to Amazon’s health care strategies, I (Zach) believe it’s a threat the business wants to take. And Amazon might have a firm leg to base on if it pursues legal action versus Surescripts’ information withholding: In April, Surescripts was taken legal action against by the Federal Trade Commission over declared “prohibited monopolization of e-prescription markets,” for example.

However whatever occurs next, these legal obstructions are definitely slowing Amazon and PillPack’s growth strategies– implying Amazon will wish to put these legal obstacles behind it quicker instead of later on if it wishes to optimize the possible return on its $750 million acquisition.

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