The European Commission has approved IMS Health’s plans to acquire part of France-based Cedegim SA’s customer relationship management and strategic data business, but with conditions.

Approval is conditional upon IMS’ commitment to divest parts of its primary market research business and to grant third-party access to the “brick structure” underlying its sales tracking data.

The Commission says it had concerns that the proposed acquisition could lead to less choice and higher prices for customers of standardised primary market research services, and also that IMS Health could refuse to give access to its “brick structure” to its competitors, which would have prevented them from competing effectively on the market. However, it says, IMS’ commitments address these concerns.

IMS Health is market leader in the European Economic Area (EEA) for tracking sales of prescription drugs by which pharmaceutical companies measure their performance, while Cedegim’s customer relationship and strategic data business offers one of the largest databases of doctors’ contact details in Europe on which drugmakers rely to target their sales efforts. It is also an important provider of customer relationship management software to pharmaceutical companies in the EEA.

The Commission’s investigation indicated that the proposed transaction would reduce competition on the market for standardised primary market research, because the merged entity would face insufficient competitive constraint from the few small remaining players in the EEA.

It also had concerns that IMS Health would shut out competitors from access to its “brick structure,” since this is an important input for these players to be able to operate in the market. Indeed, says the Commission, given IMS Health’s leading position in sales tracking data in the EEA, pharmaceutical companies typically expect that providers of other data and services, such as doctors’ contact details and software products, are able to deliver their data based on the same structure or to use it in their software solutions.

To dispel these concerns, IMS Health offered to divest its standardised primary market research business and grant competitors access to the “brick structure” for 10 years. These commitments adequately address its competition concerns, says the Commission, adding that its decision is condition upon full compliance with the commitments.

The Commission also examined the competitive effects of the proposed acquisition on the markets for customer relationship management software, business intelligence solutions, consulting services and real-world evidence, where the companies’ activities overlap, but concluded that it would raise no concerns because sufficient number of competitors will remain in these markets.

Nor will the transaction raise competition concerns regarding vertical and conglomerate relationships between the different products offered by the companies, mainly because the merger will not bring about any significant changes on these markets, says the Commission.

Moreover, any possible tying or bundling practice by IMS Health is unlikely to have anticompetitive effects, because alternative providers will continue to compete effectively on the markets concerned, it adds.