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Step is one of the first toward consolidation of electronic health providers and information publishers
Representing a 22% premium over Epocrates current stock price, the proposed acquisition fills two critical gaps in the business plans of both companies, according to Jonathan Bush, athenahealth CEO: “For Epocrates, it will fill the need for a broader revenue stream, and for us, our need is access [to physicians] and market share.” Epocrates is one of a handful of companies that provide edited, tailored drug information to physicians; it claims access to 330,000 physicians, or roughly half the US profession. Athenahealth (Watertown, MA), on the other hand, is one of dozens if not hundreds of IT companies providing electronic-health or —medical records systems that are moving at a fairly rapid clip into doctors’ offices and healthcare systems. (It is regarded as one of the leaders, at least of cloud-based applications, with a claimed 38,000 providers in its network, and is growing at a 30% annual clip.) One of the biggest hurdles to broader use of EHRs, however, has been the broad range of vendors and lack of interoperability among them.
During an analysts’ presentation announcing the acquisition, Bush mentioned that Epocrates has a large database of patient records, and athenahealth has millions of patient records of its own. Both, with proper HIPPA constraints, can provide market insights to pharmaceutical companies (and health systems). Epocrates has offered a variety of engagement options for pharma marketers. As more and more physicians become employees of healthcare systems (rather than independent practitioners), and as healthcare systems apply more constraints on physician access, getting access to prescribers is a growing challenge for pharma marketers. By getting drug information from Epocrates into the “digital workflow” of these physicians, the hope is that a more effective communication channel to prescribers is developing.
Epocrates’ management was aware of this trend, but the company backed off from developing its own EHR offering in early 2012, and its stock had been sliding during most of last year. One of the questions yet to be resolved is whether Epocrates’ ownership by an EHR vendor will make it less accessible to physicians using other EHR systems.