Dive Brief:
- Healthcare IT giant Surescripts is looking for a buyer, according to a Tuesday report from Business Insider.
- The electronic prescribing company has hired healthcare investment bank TripleTree to explore a sale — potentially to a private equity firm, according to the Business Insider report, citing sources familiar.
- A private equity deal is logical, as a sale to a strategic player — like a payer with its own pharmacy benefit manager — could raise antitrust concerns, one expert told Healthcare Dive.
Dive Insight:
Surescripts offers technology that electronically sends prescription information from providers to pharmacies and details medication histories, as well as products for checking patients’ prescription coverage.
The company, which is owned by CVS Health, Cigna-owned PBM Express Scripts and two pharmacist trade groups, processed 2.5 billion electronic prescriptions in 2023, according to the company. It’s a profitable company with a national reach, according to Business Insider. Surescripts and TripleTree didn’t respond to requests for comment.
PE firms could be possible buyers because of Surescripts’ ownership structure, maintaining neutrality between its pharmacy and PBM ownership interests, a former executive told Business Insider. PE buyers also likely have the funds needed, the executive said.
PE firms have shown increased interest in the healthcare sector too, even among rising scrutiny from researchers and the federal government.
However, a PE buy could raise less scrutiny than a sale to a large payer, Tyler Giesting, director of consultancy West Monroe’s healthcare and life sciences practice, told Healthcare Dive over email.
“I would very much expect regulators to scrutinize a potential transaction involving Surescripts if the buyer were a large healthcare payer, particularly if that buyer operates their own PBM business,” he said. “Regulators have shown they will not hesitate to scrutinize such deals, as evidenced by other pending transactions such as UnitedHealth/Optum’s bid for Amedisys and, previously, the UnitedHealth/Change Healthcare transaction.”
The possible sale comes months after Surescripts settled allegations with the Federal Trade Commission that the company had monopolized two e-prescription drug markets.
In 2019, the FTC sued the IT vendor, accusing the firm of illegally maintaining monopolies in prescription routing and eligibility. Regulators alleged Surescripts had maintained a huge share in both markets using threats and loyalty agreements that charged higher prices to customers that didn’t exclusively use its services.
When the settlement was reached, the vendor said the case relied on factual errors about its business and mischaracterizations about the economics of the e-prescription market.
