Symphony Health tangles with IMS Health over data access and pricing for information services

At the end of last year, IMS Health (Plymouth Meeting, PA) completed its acquisition of SDI, one of its main competitors in producing syndicated prescription-sales data for the US market. IMS data is widely used by pharma companies (and many others) to track the uptake of newly introduced drugs, the to-and-fro marketing battles among competing brands, and the dropoff when drugs go off-patent. Many pharma reps’ compensation plans are keyed to sales activity as tracked by IMS Health. Now, however, a newly forming company, Symphony Health Solutions, has thrown down a gantlet for this business. The company filed a lawsuit, in federal court, claiming anticompetitive activity and abuse of IMS' “monopoly power” in controlling both access to, and sales of, these market data.

“IMS Health has systematically and repeatedly engaged in a broad pattern of behavior with customers, competitors, and suppliers to maintain, extend, and create new monopolies in the markets for pharmaceutical data products,” said Frank Lavelle, CEO, Symphony Health, in a statement. “We are more than willing to compete head on with any company but want it to be on a level playing field.”

The complaint alleges that IMS Health sells “predatory” product bundles; sets up exclusive data-procurement practices and blocks Symphony’s access to those data sources; and limits customer access to competitive analytics offerings (presumably, from Symphony itself).

For its part, IMS issued a press statement on July 25 saying that the suit is “without merit” and that it will “vigorously defend our position.”

The data at stake here are generally derived from scrips filed for adjudication by retail pharmacies, hospitals and others. Their analysis can be strikingly local; IMS was one of several companies that were party to a US Supreme Court decision in 2011, when the ability to report data by prescriber was allowed. (IMS produces a wide range of other reporting services, and has internationalized its service to many key markets.)

SDI, when it was acquired, was itself the recent rollup of SDI and Verispan, another data provider. Wolters Kluwer and Thomson Reuters have had data services based on pharma sales, but both those companies have mostly exited the business.

The lawsuit is also a standoff between two private-equity groups: IMS Health, which has bounced between public and private ownership for decades, is currently owned by a trio of companies, TPG Capital, CPP Investment Board and Leonard Green & Partners, who bought it for around $6 billion in 2010. Symphony Health is owned by Symphony Technology Group, based in Palo Alto, CA; the company formed Symphony Health Solutions about a year ago, and has just acquired parts of United BioSource from Express Scripts, to form a new portfolio company called Evidera.