Federal Trade Commission.
Proposed Consent Agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before November 28, 2011.
Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write “IMS SDI, File No. 111 0097” on your comment, and file your comment online at https://www.ftcpublic.commentworks.com/ftc/imssdihealthconsent, by following the instructions on the web-based form. If you prefer to file your comment on paper, mail or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW., Washington, DC 20580.
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FOR FURTHER INFORMATION CONTACT:
Gregory Luib (202) 326-3249, FTC, Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
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Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and § 2.34 the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for October 28, 2011), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue NW., Washington, DC 20580, either in person or by calling (202) 326-2222.
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before November 2, 2011. Write “IMS SDI, File No. 111 0097” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the Commission Web site.
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest.
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https://www.ftcpublic.commentworks.com/ftc/imssdihealthconsent by following the instructions on the web-based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
If you file your comment on paper, write “IMS SDI, File No. 111 0097” on your comment and on the envelope, and mail or deliver it to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your paper comment to the Commission by courier or overnight service.
Analysis of Agreement Containing Consent Order To Aid Public Comment
The Federal Trade Commission (“Commission”) has accepted from Healthcare Technology Holdings, Inc. (“Healthcare Technology”), subject to final approval, an Agreement Containing Consent Orders (“Consent Agreement”), which is designed to remedy the anticompetitive effects of Healthcare Technology's proposed acquisition of SDI Health LLC (“SDI”) from SDI Health Holdings LLC (“SDI Holdings”). Under the terms of the proposed Consent Agreement, Healthcare Technology would be required, among other things, to divest SDI's promotional audits and medical audits business.
The proposed Consent Agreement has been placed on the public record for thirty days for receipt of comments; any comments received will also become part of the public record. After thirty days, the Commission will again review the proposed Consent Agreement and the comments received, and will decide whether it should withdraw from the proposed Consent Agreement, modify it, or make it final.
Pursuant to an agreement dated January 13, 2011, Healthcare Technology, through its wholly owned subsidiary, IMS Health Incorporated (“IMS”), proposes to acquire all of the membership interests in SDI (“Proposed Acquisition”). The Commission's Complaint alleges that the Proposed Acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by lessening competition in the U.S. markets for promotional audits and medical audits. The proposed Consent Agreement will remedy the alleged violations by replacing the competition that would otherwise be eliminated by the acquisition.
II. The Parties
Healthcare Technology is the private holding company of IMS. IMS produces and sells healthcare data and analytics to pharmaceutical, biotechnology, and other customers. IMS maintains its headquarters in Danbury, Connecticut and has operations in over 100 countries.
SDI Holdings is the private holding company of SDI, which offers many of the same healthcare data and analytics products and services as IMS, and is headquartered in Plymouth Meeting, Pennsylvania.
III. The Products and Structure of the Markets
Promotional audits provide estimates (based on data from physician panels) of pharmaceutical promotional activities for individual branded drugs in areas such as physician detailing, product sampling, and advertising. Pharmaceutical manufacturers and other customers use promotional audits to assess their “share of voice,” or their share of spending in various promotional categories, which helps them to determine their promotional budgets. The promotional audit market, however, does not include products that gauge physician reactions to promotional efforts or otherwise assess the effectiveness of promotional activities.
Medical audits provide estimates of disease-specific diagnoses made and therapies prescribed by physicians. The data underlying medical audits are also collected from panels of physicians. Customers use medical audits to assess, among other things, the size of therapeutic areas, which products are used to treat particular diseases, and prescribing and treatment trends.
The United States is the relevant geographic area in which to analyze the effects of the Proposed Acquisition in both the promotional audits and medical audits markets.
The $16 million market for promotional audits is highly concentrated. Only IMS, SDI, and Cegedim S.A. offer promotional audits in the United States. IMS has a 30 percent share of the market, while SDI and Cegedim have shares of 68 percent and 2 percent, respectively. The $9 million market for medical audits is also highly concentrated, with IMS accounting for 53 percent and SDI accounting for the remaining 47 percent of the market.
IV. Effects of the Acquisition
The Proposed Acquisition would eliminate actual, direct, and substantial competition between IMS and SDI in the markets for promotional audits and medical audits. By increasing IMS's share in each market, while at the same time eliminating its only significant competitor, an acquisition of SDI likely would allow IMS to unilaterally charge significantly higher prices for promotional and medical audits. The Proposed Acquisition would also likely lead to a decrease in quality for such audits, resulting in substantial anticompetitive harm to consumers in the U.S. markets for promotional and medical audits.
Entry into the relevant markets would not be timely, likely, or sufficient in magnitude, character, and scope to prevent the anticompetitive effects of the Proposed Acquisition. Entry would not take place in a timely manner because of the significant time required to recruit panels of physicians to provide the data underlying the estimates included in promotional and medical audits. In addition, the relevant markets are relatively small and mature, limiting sales opportunities for any potential new entrant. Given the size of the investment and the time needed to enter the relevant markets, relative to the sizes of those markets, it is unlikely that an entrant could obtain sufficient sales to make the investment profitable. As a result, new entry or repositioning by other firms sufficient to ameliorate the competitive harm from the Proposed Acquisition likely would not occur.
VI. The Consent Agreement
The proposed Consent Agreement remedies the acquisition's likely anticompetitive effects in the markets for promotional and medical audits. Pursuant to the Consent Agreement, Healthcare Technology will divest all of SDI's business relating to the production or sale of promotional and medical audits. The Consent Agreement provides that Healthcare Technology must find a buyer for the SDI audits business that is acceptable to the Commission (with no minimum price), no later than three months from the date on which Healthcare Technology consummates its acquisition of SDI.
Any acquirer of the divested assets must receive the prior approval of the Commission. The Commission's goal in evaluating possible purchasers of divested assets is to maintain the competitive environment that existed prior to the acquisition. A proposed acquirer of divested assets must not present competitive problems. There are a number of parties interested in purchasing SDI's promotional and medical audits business, several of which appear to have the expertise, experience, and financial viability to successfully retain the current level of competition in the relevant markets.
If the Commission determines that Healthcare Technology has not provided Start Printed Page 68191an acceptable buyer for SDI's promotional and medical audits business within the required time period, or that the manner of the divestiture is not acceptable, the Commission may appoint a trustee to divest the assets. The trustee would have the exclusive power and authority to accomplish the divestiture, and would divest the business for no minimum price.
The Consent Agreement also contains an Order to Hold Separate and Maintain Assets, which will serve to protect the viability, marketability, and competitiveness of the divestiture asset package until the assets are divested to a buyer approved by the Commission.
The purpose of this analysis is to facilitate public comment on the proposed Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Consent Agreement or to modify its terms in any way.
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By direction of the Commission.
Donald S. Clark,
[FR Doc. 2011-28497 Filed 11-2-11; 8:45 am]
BILLING CODE 6750-01-P