IMS Health – SDI Merger

In December 2011, the Federal Trade Commission approved IMS Health’s acquisition of SDI Health, bringing together two of the largest data providers servicing the pharmaceutical industry. Compass Lexecon was retained by David Gelfand at Cleary Gottlieb Steen & Hamilton LLP on behalf of IMS Health and also worked closely with Michael Sohn and Arthur Burke at Davis Polk & Wardwell LLP, who represented SDI Health. In its investigation, the FTC expressed concern that the transaction would reduce the number of firms providing “commercial APLD” services, data services making use of anonymized patient level data for commercial research on the success of various pharmaceutical products, from three to two. Compass Lexecon experts, Professor Dennis Carlton, Mark Israel, and Antara Dutta, with support from Maria Stoyadinova, submitted a white paper and made presentations to the FTC demonstrating that other firms not currently providing commercial APLD services could easily enter the commercial APLD space to discipline any attempt by the merging parties to raise prices for these services. On the basis of these and related arguments, the FTC approved the transaction with no divestitures or conditions on APLD services, requiring only divestiture of two of SDI’s much smaller “audit” products.