The UK Competition Commission has provisionally decided not to remove or vary current restrictions on how IMS Health sells its specialised pharmaceutical data services.
Despite the publication of NHS prescription drug data, IMS still faces limited competition in this market, and without the undertakings which place restrictions on how it sells this data, IMS “could use its position to create bundled products and stymie any emerging competitors,” says the Commission.
The NHS data is not yet frequent or extensive enough for IMS’ competitors to use it as a data source or for its customers to self-supply, it adds.
“Whilst the publication of further NHS prescription data may in time lead to the sort of competition that could allow us to remove the undertakings, it hasn’t had that effect yet,” says Martin Cave, chair of the IMS Review Group at the Commission.
“IMS still faces little direct competition so we provisionally think that the undertakings need to be retained so that competitors have the chance to emerge,” Mr Cave adds.
The undertakings followed a report published in 1999 by the Commission’s predecessor, the Monopolies and Mergers Commission (MMC), into IMS’ acquisition of Pharmaceutical Marketing Services Incorporated (PMSI). The MMC ruled that the merger would operate against the public interest.
To address the adverse effects identified by the MMC, IMS was required to sell Source Dispenser, PMSI’s wholesale data business, which it did in October 2000. In addition, in order to aid entry into sectors for the supply of pharmaceutical wholesale data and prescription data, IMS gave undertakings to: - license prescription data on reasonable terms to other parties; - publish price lists and discounts for its specialised pharmaceutical data services; - not to bundle those services with other goods or services; and - not to enter into exclusive contracts with data providers.
The requirement to license prescription data lapsed in February 2005, but the other three remain in place and IMS has requested that it be released from them. The firm argues that, since December 2011, the UK government has published GP prescription data free or charge via the NHS Information Centre (now the Health and Social Care Information Centre), and that this has led to new entry.
The Competition Commission is now calling for responses to its preliminary decision, and says it will consider them before publishing its final report.