Disruption and Opportunity in Prescription Data Networks: Analyzing the FY 2026 CMS/ONC Final Rule and Its Impact on Surescripts

Abstract

This essay examines the FY 2026 CMS/ONC final rule, particularly the sections impacting electronic prescribing, real-time prescription benefit (RTPB), and electronic prior authorization (ePA) standards. It:

• Dissects the rule's interoperability mandates and certification criteria

• Analyzes the implications for Surescripts' current market dominance in prescription routing, benefit verification, and prior authorization

• Identifies market entry points for new health tech players in e-prescription, RTPB, and ePA solutions

• Evaluates the potential for disintermediation of entrenched network monopolies

• Discusses investment strategies for leveraging emerging API-based ecosystems under TEFCA and FHIR mandates

Table of Contents

1. Introduction: The Interoperability Mandate Meets the Prescription Data Monopoly

2. The Prescription Data Economy and Surescripts' Strategic Position

3. Key Provisions in the FY 2026 Final Rule: E-Prescribing, RTPB, and ePA

4. The Competitive Implications for Surescripts' Network Model

5. API-Centric Market Entrants: Structural Shifts in Prescription Routing

6. Real-Time Prescription Benefit: From Closed Network Gatekeeping to Open API Competition

7. Electronic Prior Authorization: Automating the Last Paper Wall

8. TEFCA and Modular API Requirements: Building the New Railways for Drug Data Exchange

9. Entrepreneurial Opportunities in the Post-Surescripts Era

10. Strategic Considerations for Investors: Valuation Shifts and M&A Triggers

11. Risks, Regulatory Overhang, and the Pace of Adoption

12. Conclusion: Positioning for the Next Decade of Prescription Data Infrastructure

Disclaimer: The views expressed in this essay are my own and do not represent the views of my employer.

Introduction

In the early days of electronic prescribing in the United States, the technical and regulatory barriers to exchanging drug data between prescribers, pharmacies, and payers were high enough that the market naturally gravitated toward a single intermediary. Surescripts emerged as that intermediary by operating at the nexus of pharmacy benefit managers, retail pharmacies, and electronic health record vendors. By integrating tightly with PBM formulary systems and pharmacy dispensing software, it created a near-monopoly in the electronic prescription routing, benefit verification, and prior authorization space. For two decades, this position has been both lucrative and defensible due to a combination of network effects, proprietary transaction formats, and the lack of a regulatory mandate for open, API-driven interoperability. The FY 2026 CMS/ONC final rule marks a potential inflection point in that equilibrium.

The final rule incorporates provisions that, while broadly framed as advancing interoperability under the 21st Century Cures Act, have direct implications for the commercial prescription transaction market. First, the ONC Health IT Certification Program now requires certified technology to support electronic prescribing using the NCPDP SCRIPT standard version 2023011 and to implement a real-time prescription benefit API using NCPDP's RTPB standard version 13. These functionalities are not merely optional enhancements for vendors seeking certification; they are set to become part of the Base EHR definition by January 1, 2028. This effectively mandates that every certified EHR be capable of initiating these transactions through open APIs, with no requirement that they be mediated by a legacy network intermediary.

Second, the final rule finalizes new certification criteria for electronic prior authorization based on HL7 FHIR implementation guides, as well as modular API capabilities such as workflow triggers for decision support and subscription-based event notifications. These represent a complete shift in the technical substrate for high-friction, revenue-rich transactions like prior authorizations. Instead of routing through proprietary EDI networks and vendor-specific portals, payers will be required under the separate CMS Interoperability and Prior Authorization rule to expose FHIR-based APIs that certified health IT can consume directly.

For Surescripts, this presents a dual challenge. Its historical value proposition has been that it could normalize heterogeneous data formats, manage payer-specific connectivity, and maintain a single point of integration for EHR vendors. The FY 2026 rule and its companion CMS mandates erode this advantage by standardizing not just the payload format but the transport method, and by legally obligating payers to make the necessary endpoints available. In such an environment, the rationale for paying Surescripts' transaction fees comes under scrutiny, particularly for high-volume transactions like benefit checks and prior authorization requests.

The Prescription Data Economy and Surescripts' Strategic Position

To understand the magnitude of disruption these rules may create, it is essential to grasp the scale and structure of Surescripts' current business model. Surescripts operates what amounts to the nervous system of American prescription drug commerce, processing approximately 2.5 billion electronic prescriptions annually and maintaining a 95 percent market share in both prescription routing and eligibility verification services. This dominance has been maintained through what the Federal Trade Commission characterized as a deliberate strategy of exclusivity agreements, loyalty contracts, and barriers to multihoming that prevented customers from using competing platforms.

The company's revenue model is transaction-based, charging fees for each prescription routed, eligibility check performed, and prior authorization processed through its network. With estimated annual revenues between 100 million and 750 million dollars, depending on the source, Surescripts has monetized its position as the de facto infrastructure provider for prescription data exchange. The company processes transactions worth trillions of dollars in pharmaceutical commerce while extracting a modest but consistent toll on each interaction.

The economic moat around this business has historically been protected by several factors beyond network effects. First, the technical complexity of managing hundreds of different payer formularies, eligibility systems, and prior authorization workflows created genuine value for EHR vendors and pharmacies that preferred a single integration point. Second, the NCPDP standards required for e-prescribing, while theoretically open, were implemented through proprietary extensions and interpretations that made direct payer integration challenging. Third, the lack of regulatory pressure for standardized APIs meant that payers had little incentive to expose direct interfaces that would bypass Surescripts' network.

This business model came under legal scrutiny when the FTC filed suit against Surescripts in 2019, alleging illegal monopolization of electronic prescription markets. The case culminated in a 2023 settlement that prohibited the company from enforcing exclusivity agreements and loyalty provisions in its contracts. However, the settlement did not address the fundamental structural advantages that allowed Surescripts to maintain its dominant position. The FY 2026 rule may accomplish what the FTC settlement could not by creating regulatory requirements that eliminate the technical barriers to direct API integration.

The timing of these regulatory changes coincides with other pressures on Surescripts' business model. The company was acquired by TPG, a private equity firm, in October 2024, suggesting that its existing shareholders may have recognized the need for strategic repositioning ahead of regulatory disruption. Additionally, Surescripts has been exploring strategic partnerships and acquisitions, such as its purchase of ActiveRADAR, to expand beyond pure transaction processing into value-added analytics and decision support services.

Key Provisions in the FY 2026 Final Rule: E-Prescribing, RTPB, and ePA

The Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization final rule, published as part of the FY 2026 IPPS, establishes three critical certification criteria that will reshape prescription data exchange. These requirements represent the culmination of a multi-year effort by CMS and ONC to standardize and open prescription-related APIs, building on authorities granted under the 21st Century Cures Act and the Consolidated Appropriations Act of 2021.

The first key provision updates the electronic prescribing certification criterion to require support for NCPDP SCRIPT standard version 2023011, replacing the current version 2017071. This updated standard includes significant enhancements that extend beyond simple version upgrades. Version 2023011 introduces improved extensibility, support for Risk Evaluation and Mitigation Strategies transactions, dental procedure codes, patient gender and pronouns, patient conditions, redesigned product and drug groupings, and critically, support for three-way transactions among prescriber, facility, and pharmacy to enable electronic prescribing of controlled substances in long-term care settings. Perhaps most importantly for competitive dynamics, the standard includes pharmacy-initiated transfer of electronic controlled substance prescriptions and specific electronic prior authorization transactions that will be required.

The transition period for SCRIPT 2023011 extends from the effective date of the rule through January 1, 2028, after which exclusive use of the updated standard will be mandatory. This gives market participants approximately three and a half years to implement the new standard, but the interim period allows for parallel operation of both versions, potentially creating opportunities for new entrants to establish market presence before the full transition is complete.

The second critical provision establishes certification requirements for real-time prescription benefit functionality using NCPDP RTPB standard version 13. This requirement, which takes effect January 1, 2027, mandates that certified EHRs be capable of querying payer systems in real-time to retrieve patient-specific coverage, formulary status, cost-sharing requirements, and alternative medication options. The RTPB capability represents a fundamental shift from batch-oriented formulary updates to dynamic, patient-specific benefit determination at the point of prescribing.

The RTPB standard enables prescribers to see, in real-time, what a patient will pay out-of-pocket for a prescribed medication, whether the medication is covered under their formulary, what prior authorization requirements exist, and what lower-cost alternatives might be available. This functionality addresses a critical gap in prescription decision-making that has contributed to medication abandonment rates and suboptimal therapy choices. By requiring this capability in all certified EHRs, the rule effectively democratizes access to real-time benefit information that was previously available only through proprietary interfaces.

The third major provision introduces electronic prior authorization certification criteria based on HL7 FHIR R4 implementation guides. These criteria require certified health IT to support automated prior authorization workflows, including the ability to determine prior authorization requirements, submit requests, and receive decisions through standardized APIs. The FHIR-based approach represents a dramatic departure from the current ecosystem of proprietary portals, fax-based submissions, and custom integrations that characterize most prior authorization processes.

The electronic prior authorization requirements work in conjunction with the CMS Interoperability and Prior Authorization Final Rule, which mandates that payers implement FHIR APIs for prior authorization by January 1, 2027. Together, these rules create end-to-end API connectivity for prior authorization workflows, eliminating the technical necessity for intermediary networks to broker these high-value transactions.

Beyond these three primary certification criteria, the rule establishes several modular API requirements that support workflow integration and event-driven architecture. These include decision support hooks that can trigger prior authorization checks, prescription benefit queries, and formulary lookups based on prescribing context, as well as subscription-based notifications that can alert providers to changes in patient coverage or formulary status.

The Competitive Implications for Surescripts' Network Model

The regulatory changes embodied in the FY 2026 rule directly challenge the fundamental premises of Surescripts' network-mediated business model. Historically, Surescripts has justified its transaction fees by providing value as an integration hub that normalizes disparate data formats, manages complex connectivity requirements, and offers reliable, high-performance routing for mission-critical prescription transactions. The new standards and API requirements erode each of these value propositions in specific ways.

First, the mandated adoption of standardized NCPDP and FHIR formats reduces the need for format normalization and translation services. When both EHRs and payers are required to support the same standards with the same implementation requirements, the technical barriers to direct integration are significantly lowered. This is particularly important for RTPB transactions, where Surescripts has historically provided value by aggregating hundreds of different payer interfaces into a single API that EHR vendors could integrate once and use across all covered lives.

Second, the regulatory mandate for payer API availability eliminates one of Surescripts' key historical advantages: its relationships with payers and ability to negotiate access to their systems. When payers are required by federal regulation to provide FHIR APIs for prior authorization and RTPB functionality, new market entrants can access the same underlying data and services that Surescripts provides without needing to negotiate individual agreements or navigate proprietary interfaces.

Third, the shift to API-based architecture opens opportunities for cloud-native, microservices-oriented competitors that can offer superior performance, reliability, and user experience compared to Surescripts' legacy infrastructure. Companies that build from the ground up for API-first architecture may be able to provide lower latency, higher availability, and more sophisticated analytics than networks designed for EDI-era message passing.

The competitive threat is not merely theoretical. Several factors suggest that market disruption is likely to accelerate following the implementation of these rules. The private equity acquisition of Surescripts by TPG indicates that sophisticated investors recognize the need for strategic repositioning in anticipation of regulatory change. Private equity ownership often signals an intent to optimize operations, reduce costs, and potentially prepare for exit through strategic sale or further restructuring.

Additionally, the broader health tech investment landscape has seen significant capital deployment in prescription-related technologies, suggesting that investors and entrepreneurs are positioning for opportunities in this space. Companies like CoverMyMeds, which was acquired by McKesson for 1.4 billion dollars, and DrFirst, which has raised substantial venture funding, have demonstrated that there is both market demand and investor appetite for prescription workflow automation and prior authorization solutions.

The FTC settlement with Surescripts, while not directly addressing the technical architecture of prescription routing, has eliminated the legal barriers that previously prevented customers from multihoming or switching to alternative platforms. The removal of exclusivity agreements and loyalty provisions means that EHR vendors, pharmacies, and payers are free to explore competitive alternatives without fear of contractual repercussions or economic penalties.

However, Surescripts is not likely to passively cede market share. The company has several strategic options for defending and potentially expanding its position in an API-centric ecosystem. First, it can leverage its existing customer relationships and operational expertise to position itself as the highest-reliability, most comprehensive aggregator of the new standardized APIs. Even in a world where payers are required to provide FHIR endpoints, there may still be value in having a single integration point that handles error handling, retry logic, and performance optimization across hundreds of different payer systems.

Second, Surescripts can pivot toward value-added services that layer intelligence and analytics on top of the standardized data flows. The company's acquisition of ActiveRADAR, which provides therapeutic alternatives and clinical decision support, suggests a strategy of moving up the value chain from pure transaction processing to clinical intelligence and workflow optimization. In this model, Surescripts would compete less on network exclusivity and more on the quality of insights and automation it can provide to clinicians at the point of care.

Third, the company can explore vertical integration opportunities, potentially partnering with or acquiring EHR vendors, pharmacy chains, or PBMs to create tighter coupling between prescription data services and point-of-care workflows. Such a strategy would be consistent with broader consolidation trends in health IT and could help maintain relevance even as the underlying infrastructure becomes commoditized.

API-Centric Market Entrants: Structural Shifts in Prescription Routing

The standardization of prescription routing APIs creates structural opportunities for new market entrants that were previously impossible due to the technical and regulatory barriers protecting Surescripts' network. The NCPDP SCRIPT 2023011 standard, when implemented consistently across EHRs and pharmacy systems, enables direct routing of prescriptions without requiring intermediary networks. This opens several categories of potential competition that could reshape the prescription routing landscape.

The first category consists of cloud-native API platforms that can provide prescription routing services with superior performance characteristics compared to legacy networks. Companies building modern microservices architectures with global content delivery networks, auto-scaling infrastructure, and real-time monitoring can potentially offer lower latency, higher availability, and better error handling than networks designed for earlier generations of health IT infrastructure. These platforms could compete primarily on technical excellence, offering SLA guarantees and performance metrics that exceed what legacy providers can deliver.

The second category involves specialized routing services that focus on specific segments or use cases where Surescripts' one-size-fits-all approach may be suboptimal. For example, companies could build routing platforms optimized for specialty medications, controlled substances, veterinary prescriptions, or long-term care facilities. The SCRIPT 2023011 standard includes specific enhancements for these use cases, creating opportunities for niche players to provide superior functionality for targeted market segments.

The third category encompasses regional or network-specific routing providers that could serve particular geographic markets or health system networks more effectively than a national monopoly. Health systems with significant market presence in particular regions might find value in routing providers that understand local payer mix, pharmacy relationships, and regulatory requirements better than a national provider optimized for the lowest common denominator across all markets.

Perhaps most significantly, the API standardization enables EHR vendors to consider building prescription routing capabilities directly into their platforms rather than relying on external providers. Large EHR companies like Epic, Cerner, and athenahealth have the technical capabilities and customer reach to potentially internalize prescription routing, eliminating third-party transaction fees and providing tighter integration with clinical workflows. The marginal cost of adding prescription routing to an existing EHR platform may be substantially lower than the cumulative transaction fees paid to external providers over time.

The competitive dynamics become particularly interesting when considering the transaction economics. Surescripts currently charges fees for each prescription routed, creating a variable cost structure that scales with prescription volume. New entrants could potentially offer flat-rate pricing, subscription models, or even freemium approaches that generate revenue through value-added services rather than per-transaction fees. Such pricing models could be particularly attractive to high-volume prescribers or health systems looking to reduce variable costs and improve predictability in their health IT spending.

The technical architecture enabled by FHIR and modern API standards also allows for more sophisticated routing logic and decision-making than the current network model supports. New entrants could build routing platforms that incorporate real-time analytics, machine learning-based optimization, predictive failure detection, and intelligent retry mechanisms. These capabilities could provide tangible improvements in prescription success rates, delivery times, and error reduction compared to legacy systems designed primarily for message passing rather than intelligent workflow orchestration.

However, market entrants will face several challenges in competing with Surescripts' established position. Network effects remain important even in an API-standardized environment, as routing providers need connectivity to large numbers of pharmacies to provide comprehensive coverage for prescribers. Surescripts' existing relationships with virtually every major pharmacy chain and PBM create switching costs and relationship dependencies that will not disappear overnight simply because APIs become standardized.

Additionally, the operational complexity of managing prescription routing at scale should not be underestimated. Surescripts processes billions of transactions annually with extremely high reliability requirements, and the institutional knowledge and operational procedures required to maintain such performance are not easily replicated. New entrants will need to demonstrate not just technical competence but operational excellence at scale before gaining the trust of mission-critical prescribing workflows.

Real-Time Prescription Benefit: From Closed Network Gatekeeping to Open API Competition

The real-time prescription benefit requirement in the FY 2026 rule may represent the most significant competitive threat to Surescripts' business model because it addresses one of the company's highest-value, most defensible service offerings. RTPB functionality enables prescribers to see patient-specific coverage information, formulary status, copay amounts, and alternative medication options in real-time during the prescribing process. This capability has become increasingly important as high-deductible health plans and complex formularies have made prescription costs less predictable for both patients and providers.

Surescripts has historically dominated this market by aggregating RTPB interfaces from hundreds of payers into a single API that EHR vendors can integrate once and use across their entire patient population. The technical complexity of managing different payer APIs, varying data formats, and inconsistent response times has created genuine value for EHR vendors that prefer not to manage dozens or hundreds of individual payer integrations. However, the NCPDP RTPB standard version 13 requirement changes this dynamic by mandating that payers provide standardized APIs that any certified EHR can consume directly.

The competitive implications are particularly significant because RTPB transactions generate high per-transaction fees for Surescripts while requiring relatively modest technical resources to process. Unlike prescription routing, which requires complex message transformation and reliable delivery to pharmacy systems, RTPB queries are typically simple request-response transactions that return structured data about coverage and costs. The high margins on these transactions make RTPB an attractive target for new market entrants that can provide equivalent functionality at lower cost or with superior user experience.

The standardization of RTPB APIs also enables innovation in user interface and decision support that was previously constrained by Surescripts' network architecture. New entrants could build RTPB services that provide more sophisticated cost comparison tools, therapeutic alternative recommendations, patient assistance program matching, and outcomes-based prescribing guidance. These value-added capabilities could differentiate RTPB providers on functionality rather than just connectivity, creating opportunities for clinical decision support companies to enter the prescription benefit space.

Several categories of potential competitors emerge from the RTPB standardization. First, existing clinical decision support vendors could extend their platforms to include real-time benefit checking as part of comprehensive prescribing workflows. Companies like Wolters Kluwer, IBM Watson Health, and Epic's own decision support tools could integrate RTPB functionality to provide more complete guidance to prescribers without requiring separate integrations or additional vendor relationships.

Second, pharmacy benefit management companies could potentially offer direct RTPB services to compete with third-party aggregators. Large PBMs like Express Scripts, CVS Caremark, and OptumRx already maintain the underlying data and systems required for RTPB functionality. By providing direct APIs to EHR vendors, they could eliminate middleman fees while potentially improving the accuracy and timeliness of benefit information for their covered populations.

Third, health IT vendors focused on price transparency and cost management could build comprehensive RTPB platforms that combine real-time benefit data with broader prescription cost intelligence. These platforms could integrate multiple data sources including cash prices, manufacturer coupons, patient assistance programs, and pharmacy-specific pricing to provide more complete cost guidance than traditional RTPB services that focus only on insurance coverage.

The user experience opportunities in RTPB are particularly significant because most current implementations provide only basic coverage and cost information without sophisticated decision support or workflow integration. New entrants could build RTPB interfaces that provide predictive analytics about prescription abandonment likelihood, automatically suggest therapeutic alternatives based on cost and clinical equivalence, and integrate with electronic prescribing workflows to streamline the selection of optimal medications for individual patients.

However, RTPB market entry faces several challenges that may limit the pace of disruption. Payer compliance with RTPB API requirements will likely be uneven, with smaller payers potentially slower to implement standardized interfaces than large national plans. New RTPB providers will need to maintain fallback capabilities for non-compliant payers, potentially requiring some of the same complex integration work that has historically protected Surescripts' position.

Additionally, the accuracy and completeness of RTPB data varies significantly across payers, and Surescripts has developed institutional expertise in data validation, error handling, and quality assurance that new entrants will need to replicate. Prescribers have low tolerance for inaccurate benefit information that could lead to patient dissatisfaction or prescription abandonment, creating high barriers to entry for providers that cannot demonstrate equivalent data quality and reliability.

The timing of market entry will be critical for RTPB competitors. The January 1, 2027 compliance deadline for RTPB standard version 13 creates a window during which new entrants can establish market presence while EHR vendors are necessarily updating their integrations to support the new standard. EHR vendors that are required to modify their RTPB integrations anyway may be more willing to consider alternative providers during this transition period than they would be under normal circumstances.

Electronic Prior Authorization: Automating the Last Paper Wall

Electronic prior authorization represents perhaps the greatest opportunity for market disruption created by the FY 2026 rule because it addresses one of the most inefficient and administratively burdensome processes in American healthcare. Prior authorization requirements affect an estimated 89 percent of physicians, who report spending an average of two days per week on prior authorization activities. The current process typically involves phone calls, fax transmissions, and manual form completion that can delay patient access to needed medications by days or weeks.

Surescripts has monetized this inefficiency through its electronic prior authorization platform, which automates some aspects of the prior authorization process but still relies on proprietary interfaces and payer-specific workflows. The company's ePA solution processes millions of prior authorization requests annually, charging transaction fees for each submission and response. However, the FHIR-based prior authorization requirements in the FY 2026 rule, combined with the CMS Interoperability and Prior Authorization Final Rule, create an end-to-end API framework that could eliminate the need for intermediary platforms.

The technical architecture for FHIR-based prior authorization is fundamentally different from the EDI-based systems that have characterized electronic prior authorization to date. FHIR APIs enable real-time, bidirectional communication between EHRs and payer systems, allowing for immediate determination of prior authorization requirements, automated submission of requests with clinical documentation, and real-time status updates on request processing. This architecture supports workflow automation that was impossible with batch-oriented EDI transactions.

The competitive opportunity in electronic prior authorization extends beyond simple transaction processing to comprehensive workflow automation and clinical decision support. New market entrants could build prior authorization platforms that incorporate machine learning to predict approval likelihood, automatically generate clinical justifications based on patient data, and provide real-time guidance to prescribers on the most efficient paths to medication approval. These capabilities could reduce the administrative burden on providers while improving patient access to needed therapies.

Several categories of potential competitors could emerge in the FHIR-enabled prior authorization market. First, clinical workflow automation companies could build comprehensive prior authorization solutions that integrate with EHR systems to provide end-to-end automation from requirement determination through approval tracking. These platforms could leverage robotic process automation, natural language processing, and machine learning to minimize manual intervention in prior authorization workflows.

Second, existing utilization management and clinical decision support vendors could extend their platforms to include prior authorization functionality. Companies that already provide clinical guidelines, formulary management, and utilization review services have domain expertise and payer relationships that could be leveraged to build superior prior authorization solutions.

Third, artificial intelligence and machine learning companies focused on healthcare applications could build prior authorization platforms that provide predictive analytics and automated decision support. These platforms could analyze historical approval patterns, clinical guidelines, and patient-specific factors to optimize prior authorization strategies and improve success rates.

The value proposition for new electronic prior authorization platforms extends beyond cost reduction to include improved clinical outcomes and patient satisfaction. Current prior authorization processes often delay or prevent access to optimal therapies, leading to medication switches, treatment delays, and potentially worse clinical outcomes. FHIR-based platforms that can process prior authorization requests in real-time during prescribing workflows could eliminate these delays while providing prescribers with immediate feedback on coverage and alternatives.

The market opportunity in electronic prior authorization is substantial because the current process generates significant costs for providers, payers, and patients without corresponding value creation. Providers spend billions of dollars annually on prior authorization administrative activities, while patients experience delays and barriers to accessing needed medications. A platform that could dramatically reduce these costs while improving outcomes would create value for all stakeholders in the prescription ecosystem.

However, electronic prior authorization automation faces several implementation challenges that may slow market development. Payer systems for prior authorization vary significantly in their clinical requirements, documentation standards, and approval criteria. New platforms will need to accommodate this variation while providing consistent user experiences for prescribers who work with multiple payers.

Additionally, the clinical complexity of prior authorization decisions requires sophisticated understanding of medical necessity criteria, clinical guidelines, and individual patient factors. Platforms that automate prior authorization workflows must balance efficiency with clinical appropriateness, ensuring that automation does not compromise the quality of clinical decision-making or patient safety.

The regulatory environment for electronic prior authorization continues to evolve, with potential future requirements for prior authorization transparency, appeals processes, and outcome reporting. New market entrants will need to build platforms that can adapt to changing regulatory requirements while maintaining compliance with existing standards for clinical documentation and decision-making.

TEFCA and Modular API Requirements: Building the New Railways for Drug Data Exchange

The Trusted Exchange Framework and Common Agreement represents a parallel development that could significantly amplify the competitive disruption created by the FY 2026 rule. TEFCA creates a nationwide network of Qualified Health Information Networks that enable standardized data exchange using FHIR APIs, potentially providing an alternative infrastructure for prescription data transactions that bypasses traditional intermediaries entirely.

TEFCA's facilitated FHIR capabilities, which are being implemented in 2024 and 2025, enable direct API-based data exchange between healthcare organizations without requiring pre-existing relationships or custom integrations. This capability could be particularly relevant for prescription-related data exchange, as it provides a trust framework and technical infrastructure that new market entrants could leverage to compete with established networks.

The intersection of TEFCA and prescription data exchange creates several strategic opportunities for health tech entrepreneurs. First, companies could build prescription routing and benefit verification services that operate through TEFCA networks, potentially providing nationwide coverage without requiring individual agreements with hundreds of payers and pharmacies. The TEFCA trust framework and security standards could reduce the compliance and operational overhead associated with prescription data exchange while enabling new market entrants to focus on functionality and user experience rather than network building.

Second, TEFCA enables more sophisticated data sharing for prescription-related decisions that incorporate broader clinical context than traditional prescription routing networks support. Companies could build decision support platforms that combine real-time prescription benefit data with clinical history, social determinants of health, and outcomes data to provide more comprehensive guidance for prescribing decisions.

Third, the modular API requirements established in the FY 2026 rule enable component-based architecture for prescription workflows that could be assembled in different configurations depending on organizational needs. Rather than requiring monolithic platforms that handle all aspects of prescription processing, organizations could potentially mix and match best-of-breed components for routing, benefit verification, prior authorization, and clinical decision support.

The TEFCA framework also supports subscription-based event notifications and workflow triggers that could enable more proactive prescription management than current batch-oriented systems allow. For example, platforms could automatically notify prescribers when patients' formulary coverage changes, when prior authorization requirements are updated, or when new therapeutic alternatives become available. These capabilities could improve medication adherence and optimize therapy selection in ways that current systems do not support.

However, TEFCA adoption in the prescription data space faces several challenges that may limit its near-term impact. The framework is still in early implementation phases, with only a small number of Qualified Health Information Networks currently operational. The prescription-specific use cases for TEFCA are not yet well-defined, and it remains unclear how quickly payers and pharmacies will implement TEFCA connectivity for prescription data exchange.

Additionally, the performance and reliability requirements for prescription transactions are extremely demanding, as delays or failures in prescription routing can directly impact patient care. TEFCA networks will need to demonstrate that they can meet these requirements at scale before gaining widespread adoption for mission-critical prescription workflows.

The economic model for TEFCA-based prescription services also remains unclear. While TEFCA reduces some of the technical barriers to market entry, successful prescription data platforms still require significant investment in infrastructure, compliance, and operational support. New entrants will need to develop sustainable business models that can compete with established providers while justifying the investment required to build and maintain high-reliability prescription transaction processing.

Entrepreneurial Opportunities in the Post-Surescripts Era

The regulatory changes embodied in the FY 2026 rule create multiple categories of entrepreneurial opportunities for health tech companies that can build superior user experiences and workflow automation on top of standardized prescription data APIs. These opportunities span the full spectrum of prescription-related workflows, from clinical decision support through administrative automation, and could support the development of entirely new categories of health IT companies.

The first major category involves API-native prescription platforms that provide comprehensive workflow automation for prescribing, benefit verification, and prior authorization. These platforms could offer superior user experiences compared to legacy systems by providing real-time decision support, predictive analytics, and seamless integration with clinical workflows. Companies building from scratch with modern API-first architecture could potentially provide better performance, reliability, and functionality than networks designed for earlier generations of health IT infrastructure.

A particularly promising subcategory involves prescription cost transparency and optimization platforms that help patients and providers navigate the complex landscape of drug pricing, insurance coverage, and patient assistance programs. The RTPB standardization enables new entrants to build comprehensive cost comparison tools that incorporate insurance coverage, cash prices, manufacturer coupons, and pharmacy-specific pricing to identify the most cost-effective options for individual patients. These platforms could address the growing problem of prescription abandonment due to cost by providing real-time guidance on affordable alternatives and assistance programs.

The second major category encompasses clinical decision support platforms that leverage prescription data to provide evidence-based guidance for medication selection, dosing, and monitoring. These platforms could integrate real-time prescription benefit data with clinical guidelines, drug interaction databases, and patient-specific factors to provide comprehensive prescribing support that goes beyond simple formulary checking. Companies could build artificial intelligence-powered platforms that learn from prescribing patterns and outcomes to provide increasingly sophisticated recommendations over time.

Specialty-focused prescription platforms represent another significant opportunity, particularly for complex therapeutic areas like oncology, mental health, and rare diseases where standard formulary and prior authorization processes may be inadequate. Companies could build platforms specifically designed for specialty medication workflows, incorporating specialized clinical guidelines, patient assistance program integration, and coordination with specialty pharmacies and infusion centers.

The prior authorization automation opportunity deserves particular attention because it addresses one of the most universally frustrating aspects of prescription workflows for both providers and patients. Companies could build platforms that use machine learning to predict prior authorization requirements, automatically generate clinical justifications, and provide real-time status tracking for authorization requests. These platforms could potentially reduce prior authorization processing time from days or weeks to minutes or hours, creating substantial value for all stakeholders.

Regional and network-specific opportunities also emerge from the API standardization, as health systems and regional payers may prefer prescription platforms that understand local market dynamics, provider relationships, and patient populations better than national monopolies. Companies could build prescription platforms optimized for specific geographic markets, health system networks, or payer organizations, providing more tailored functionality than one-size-fits-all national platforms.

The integration opportunity with broader health IT ecosystems represents another significant category. Companies could build prescription data services that integrate deeply with EHR workflows, population health platforms, and care management systems to provide more comprehensive medication management than standalone prescription processing. These integrated platforms could support medication adherence monitoring, outcomes tracking, and population-level prescription analytics that help health systems optimize their formulary decisions and clinical protocols.

Analytics and business intelligence platforms built on prescription data streams could provide valuable insights for pharmaceutical manufacturers, payers, and providers. Companies could build platforms that analyze prescription patterns, market trends, and outcomes data to support drug development, formulary management, and clinical research. The standardization of prescription data APIs makes it easier to aggregate data from multiple sources for comprehensive analytics that were previously difficult to achieve.

The patient engagement opportunity should not be overlooked, as prescription cost and access issues are major drivers of healthcare dissatisfaction. Companies could build patient-facing platforms that provide transparency into prescription costs, coverage options, and assistance programs, potentially integrated with telemedicine platforms and direct-to-consumer healthcare services. These platforms could help patients make more informed decisions about their medications while reducing abandonment rates and improving adherence.

Strategic Considerations for Investors: Valuation Shifts and M&A Triggers

The regulatory disruption created by the FY 2026 rule has significant implications for health tech investment strategies, particularly for companies operating in or adjacent to the prescription data ecosystem. The potential commoditization of Surescripts' network advantages creates both risks and opportunities that sophisticated investors should consider when evaluating portfolio companies and new investment opportunities.

From a risk perspective, the rule suggests that companies with business models dependent on proprietary data networks or exclusive API relationships may face increasing pressure as interoperability mandates eliminate their competitive moats. This has implications not only for Surescripts but for other health IT companies that have built value propositions around aggregating disparate data sources or managing complex integrations on behalf of their customers. Investors should evaluate portfolio companies for exposure to commoditization risk and consider whether their competitive advantages will remain defensible in an API-standardized environment.

The timing of the regulatory implementation creates specific windows of opportunity that may favor early-stage companies over established players. The transition periods for SCRIPT 2023011, RTPB version 13, and FHIR-based prior authorization extend through 2027 and 2028, providing a multi-year window during which new market entrants can establish positions while incumbent providers are necessarily updating their own systems for compliance. This suggests that companies founded in 2024 and 2025 may have optimal timing to build market presence before the new standards are fully implemented.

The private equity acquisition of Surescripts by TPG in October 2024 provides a signal about institutional investor perceptions of the regulatory disruption. Private equity involvement often indicates either an opportunity to optimize operations ahead of strategic sale or a belief that the company can successfully pivot its business model to maintain value in a changing regulatory environment. The acquisition price and terms, while not publicly disclosed, likely reflect expectations about how the regulatory changes will impact Surescripts' future cash flows and competitive position.

From a sector allocation perspective, the rule suggests increased investment opportunities in API-native health IT companies that can build superior user experiences and workflow automation on standardized data infrastructure. These companies may have advantages over legacy providers in terms of technical architecture, development velocity, and cost structure that become more important as proprietary network advantages diminish. Investors may want to increase exposure to early-stage companies building on modern cloud infrastructure and API-first architectures.

The consolidation implications are also significant, as the regulatory changes may accelerate merger and acquisition activity among companies seeking to assemble comprehensive prescription workflow platforms. EHR vendors may acquire prescription data companies to internalize capabilities that they currently purchase from third parties. PBMs may acquire technology companies to provide direct services to their covered populations. Pharmacy chains may acquire clinical decision support companies to enhance their patient care capabilities.

The valuation implications vary significantly depending on companies' strategic positions relative to the regulatory changes. Companies that provide value-added services on top of standardized APIs may see valuation premiums as investors recognize their potential to gain market share from commodity network providers. Conversely, companies whose value propositions depend primarily on exclusive data access or proprietary integrations may face valuation pressure as these advantages become less defensible.

The international expansion opportunities created by API standardization should also be considered by investors. Companies that build successful prescription data platforms in the United States may be able to expand more easily to other markets that adopt similar interoperability standards. The FHIR-based architecture required by the US rules is increasingly being adopted globally, potentially creating scalable platforms that can serve multiple markets without requiring complete redevelopment for each geography.

Risks, Regulatory Overhang, and the Pace of Adoption

Despite the significant opportunities created by the FY 2026 rule, several risks and implementation challenges may slow the pace of market disruption and create uncertainty for both incumbents and new entrants. Understanding these risks is critical for developing realistic timelines and investment strategies around prescription data market evolution.

The most significant risk involves uneven compliance and implementation across the diverse ecosystem of payers, providers, and technology vendors. While the rules establish clear requirements and deadlines, the practical reality of implementing complex technical standards across thousands of organizations with varying technical capabilities and resources will likely result in significant variation in compliance quality and timing. Smaller payers and regional health plans may struggle to implement robust FHIR APIs within the mandated timeframes, potentially requiring new market entrants to maintain fallback capabilities that reduce the efficiency gains from standardization.

Payer resistance represents another significant implementation risk. While payers are legally required to implement the specified APIs, the quality, performance, and comprehensiveness of these implementations may vary based on payers' strategic priorities and competitive considerations. Payers that benefit from the current system's inefficiencies may implement minimally compliant APIs that satisfy regulatory requirements without providing the superior functionality that new market entrants need to compete effectively.

The technical complexity of managing prescription data at scale should not be underestimated, particularly for companies without extensive experience in healthcare transaction processing. Prescription routing requires extremely high reliability and performance standards, as failures can directly impact patient care and provider workflows. New entrants will need to demonstrate not just technical competence but operational excellence at healthcare-grade reliability levels, which requires significant investment in infrastructure, monitoring, and support capabilities.

Data quality and accuracy issues present ongoing challenges that may limit the competitive advantages available to new market entrants. Prescription benefit data is complex and frequently changing, with variations in formulary status, prior authorization requirements, and cost-sharing that must be accurately reflected in real-time queries. Surescripts has developed institutional expertise in data validation and quality assurance over two decades of operation, and new entrants will need to replicate this expertise to provide reliable service to prescribers who have low tolerance for inaccurate information.

The cybersecurity and compliance requirements for prescription data platforms continue to evolve, creating ongoing operational overhead and risk exposure for all market participants. Companies handling prescription data must comply with HIPAA, state privacy regulations, DEA requirements for controlled substances, and emerging cybersecurity frameworks. New entrants may face higher compliance costs relative to their transaction volumes than established providers that can amortize these costs across larger customer bases.

Competitive response from incumbent providers may also slow market disruption. Surescripts and other established players are unlikely to passively cede market share and may respond to regulatory changes with aggressive pricing, enhanced functionality, or strategic partnerships that maintain their competitive positions. The company's acquisition by TPG provides access to additional capital and strategic expertise that could support a more aggressive competitive response than might be possible under previous ownership structure.

The timeline for EHR vendor adoption of new standards and APIs may be longer than regulatory deadlines suggest, particularly for smaller EHR companies with limited development resources. While the largest EHR vendors like Epic and Cerner have the resources to implement new standards relatively quickly, the long tail of smaller EHR providers may require additional time and support to achieve compliance. This could limit the addressable market for new prescription data services until broader EHR adoption is achieved.

Market education and change management represent additional challenges for new entrants seeking to displace established providers. Healthcare organizations are generally conservative in their technology adoption, particularly for mission-critical functions like prescription processing. New companies will need to invest significant resources in sales, marketing, and customer education to overcome the natural inertia that favors existing provider relationships.

Conclusion: Positioning for the Next Decade of Prescription Data Infrastructure

The FY 2026 CMS/ONC final rule represents a watershed moment in the evolution of prescription data infrastructure, creating the regulatory foundation for a more competitive, innovative, and efficient ecosystem of prescription-related services. The standardization of APIs for electronic prescribing, real-time prescription benefits, and electronic prior authorization eliminates many of the technical and regulatory barriers that have protected Surescripts' dominant market position for two decades.

For health tech entrepreneurs, the rule creates unprecedented opportunities to build API-native platforms that can compete on functionality, user experience, and cost rather than on exclusive network relationships. The most significant opportunities lie in comprehensive workflow automation, clinical decision support, and patient-facing cost transparency tools that leverage standardized data access to create superior outcomes for prescribers, patients, and payers. Companies that can build platforms combining real-time benefit data with predictive analytics, therapeutic optimization, and seamless EHR integration may be able to capture significant market share during the implementation transition period.

For investors, the regulatory changes suggest a fundamental shift in the competitive dynamics of prescription data services, with potential value migration from network operators to platform providers and application developers. The timing of the regulatory implementation creates specific investment windows that may favor early-stage companies over established players, particularly for companies building on modern API-first architectures. However, the operational complexity and reliability requirements of prescription data processing create high barriers to entry that will likely limit the number of successful new entrants.

The implications for Surescripts itself remain to be fully determined. While the regulatory changes clearly threaten the company's historical competitive advantages, Surescripts maintains significant assets in terms of operational expertise, customer relationships, and transaction volume that could support a successful transformation to compete in an API-standardized environment. The company's acquisition by TPG and strategic investments in value-added services suggest recognition of the need for business model evolution, but the ultimate success of this transformation will depend on execution quality and competitive responses from new market entrants.

The pace of market disruption will likely be determined by the interaction of regulatory compliance timelines, EHR vendor implementation priorities, and payer cooperation with API requirements. While the technical standards are now established, the practical reality of implementing complex interoperability requirements across thousands of organizations with varying capabilities and incentives suggests that market transformation may occur over several years rather than immediately upon regulatory deadlines.

The broader implications extend beyond prescription data to the entire landscape of healthcare interoperability and data exchange. The FY 2026 rule demonstrates the federal government's willingness to use regulatory authority to eliminate market failures in healthcare IT, potentially serving as a model for similar interventions in other areas where proprietary networks have created barriers to innovation and competition. TEFCA and FHIR-based architectures provide the technical foundation for similar disruptions in other healthcare data domains.

For the healthcare system as a whole, the successful implementation of these regulatory changes could yield significant benefits in terms of reduced administrative burden, improved medication access, and better clinical outcomes. The elimination of friction in prescription workflows could reduce costs for providers and patients while enabling more sophisticated clinical decision support and population health management. However, realizing these benefits will require successful execution by both incumbent providers and new market entrants operating within the new regulatory framework.

The next five years will be critical for determining whether the FY 2026 rule achieves its intended goals of promoting competition and innovation in prescription data services. The companies that successfully navigate this transition by building superior products on standardized infrastructure while maintaining the reliability and performance standards required for healthcare applications will likely emerge as the dominant players in the next generation of prescription data platforms. For entrepreneurs and investors willing to understand the technical complexities and regulatory requirements involved, the disruption of one of healthcare IT's most enduring monopolies presents a generational opportunity to build valuable, impactful companies that improve outcomes for patients and providers throughout the American healthcare system.​​​​​​​​​​​​​​​​