[Federal Register Volume 76, Number 213 (Thursday, November 3, 2011)]
[Pages 68189-68191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28497]



[File No. 111 0097]

Healthcare Technology Holdings, Inc.; Analysis of Proposed 
Agreement Containing Consent Orders To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.


SUMMARY: 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.

DATES: Comments must be received on or before November 28, 2011.

ADDRESSES: 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.

FOR FURTHER INFORMATION CONTACT: Gregory Luib (202) 326-3249, FTC, 
Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  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).\1\ 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.

    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).

    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.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to

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consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives on 
or before November 28, 2011. You can find more information, including 
routine uses permitted by the Privacy Act, in the Commission's privacy 
policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

I. Introduction

    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.

V. Entry

    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 

[[Page 68191]]

an 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.

    By direction of the Commission.
Donald S. Clark,
[FR Doc. 2011-28497 Filed 11-2-11; 8:45 am]