Mounting battle between Amazon's PillPack and Surescripts over access to patient data

When tech giant Amazon acquired online pharmacy PillPack last year, it was considered a shot at the traditional drug supply chain. 

Now, it seems, incumbent players in the pharmacy industry are pushing back.

PillPack says it will soon be cut off from patient medication history data, a move that would complicate its business model. In a statement to FierceHealthcare, Jacquelyn Miller, a PillPack spokeswoman, confirmed a dispute with other industry players but did not specifically name the other companies.

"PillPack is productively working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience," Miller said. "While we’re not surprised when powerful incumbents try to undermine these efforts, we are confident that our collaborative approach to bring customers more choice, more convenience, and improved quality will ultimately prevail."

RELATED: Amazon’s acquisition of online pharmacy PillPack spooks retail drugstores

CNBC reported Friday, citing sources at PillPack, that the company was informed last week it will no longer have access to patient medication data that come indirectly from electronic prescribing company Surescripts via a third-party company. Surescripts is owned by competitors CVS Health and pharmacy benefit manager (PBM) Express Scripts.

PillPack is considering legal action against Surescripts and other drug supply chain players, CNBC reported, citing its sources at PillPack who did not want to be identified because the deliberations are confidential. The company has already sent a cease-and-desist letter to Surescripts, according to CNBC.

Miller would not confirm to FierceHealthcare whether PillPack sent a cease-and-desist letter.

The dispute between Amazon and Surescripts comes as the e-prescribing company is under scrutiny from the Federal Trade Commission (FTC). The FTC sued Surescripts in April and alleges that the company is "illegally monopolizing the e-prescribing market."

Surescripts manages about 80% of U.S. prescriptions, according to the company's data.

The FTC alleges in its complaint that Surescripts has maintained at least a 95% share over many years.

Surescripts filed a motion to dismiss the FTC's charges in federal court July 15, arguing that the FTC’s complaint makes significant factual errors. Surescripts also said in its court filing that the federal court lacks jurisdiction for the case and claims that the FTC is seeking to stretch the boundaries of its regulatory mandate.

Genevieve Morris, a former top federal health IT official, tweeted Friday that Amazon's complaints about Surescripts have been heard before.

"What's fascinating is that HIEs have been complaining for years about paying Surescripts for medication history. Will be interesting to see what happens when a for-profit behemoth is making the complaint versus the non-profit, public good HIEs," Morris aid.

In a statement to FierceHealthcare, Paul Uhrig, Surescripts’ Chief Administrative, Legal and Privacy Officer said medication history information is protected health information and is intended to be used by physicians in caring for patients. 

"Surescripts does not provide this data to retail pharmacies, regardless of whether they are traditional or web-based. While we’re not at liberty to speak to the specifics of any one contract, we can say that we do not contract with any entity to serve as a source of medication history to pharmacies," Uhrig said in the statement.

Noting that medication history information is extremely sensitive in nature, Surescripts' spokesman said the company takes its role as a "trusted national health information network very seriously." 

"Because maintaining a trusted network is core to our purpose, patient safety, privacy, and security are at the top of our agenda," he said.

RELATED: FTC sues Surescripts, charges company with illegally monopolizing e-prescribing market

Before its acquisition by Amazon, PillPack had a contract dispute with Express Scripts in 2016 that threatened the online pharmacy's access to thousands of customers. That dispute was eventually resolved when the PBM agreed not to cut PillPack off from its network.

According to CNBC, PillPack doesn’t contract directly with Surescripts for patient medication information but goes through a third-party company, ReMy Health, which compiles the raw data and cleans the information up. ReMy Health did not respond to a request for comment.

Michael Abrams, co-founder and managing partner at Numerof & Associates, told FierceHealthcare that the move by industry incumbents to cut PillPack off from patient medication history data is a "direct shot" at what makes PillPack distinctive.

"One of PillPack's key selling factors is its personalization. It interfaces with insurance companies then pre-packs and sort medications for customers, identifies medication interactions and duplications and offers refills. A move to deny PillPack's access to that comprehensive data set is a direct threat to its business model," Abrams said.

The move to deny PillPack access to patient data may "slow Amazon down," but it's unlikely to be a "decisive blow" from competitors CVS Health and Express Scripts, Abrams said. 

The tech giant is still in a position to fundamentally change prescribing for patients, Abrams said.

"The industry is looking to non-traditional players like Amazon to break the mold and shake things up. Despite the criticism that one could level against Amazon, it does have a track record of doing that—delivering better service and lower cost for a broad segment of consumers," he said.