WebMD Board Chair Resigns as Company’s Legal Dispute With Quintiles over Data-Sharing Arrangement Continues
Saying "it was no longer appropriate to serve," Dennis Gillings, chair of Quintiles Transnational Inc., resigned from WebMD's board of directors, just one day after both companies filed briefs "prolonging" an electronic health-claims data dispute (Wall Street Journal, 10/11). On Tuesday, WebMd asked a federal appeals court to overturn a ruling that requires it to send medical data to Quintiles, the Raleigh News & Observer reports. Under an agreement reached last year, WebMD provides Quintiles with data about medical claims it processes for providers, pharmacies and managed care organizations. Quintiles -- WebMD's "largest shareholder" with 10% of the company's stock -- "packages" this information, which "doesn't identify" individual patients, and then sells it to drug companies. The dispute between the two companies began in February when WebMD stopped sending the claims information after concluding that doing so violated state privacy laws. At the request of Quintiles, a U.S. district court judge issued a preliminary injunction against WedMD ordering it to resume the data transfer. WebMd said Tuesday that subsequent efforts to get Quintiles to "modify" its business practices in order to "safeguard the privacy of the data" have proven unsuccessful, thereby necessitating an appeal. In addition, the Internet health portal has said that supplying the medical claims data also violates certain contracts it maintains with other customers.
Durham, N.C.-based Quintiles, which has "consistently argued that it is not violating anyone's privacy and that it is in compliance with state and federal privacy laws," responded to the appeal by filing a counter-complaint that seeks unspecified compensatory and punitive damages and asks the court to "continue to enforce the contract" with WebMD. Quintiles also said that WebMD is using its privacy concerns as an excuse to "escape" the data-sharing contract. WebMd said this claim was "entirely without merit" (Ranii, Raleigh News & Observer, 10/10).