WebMD, Quintiles Discussed Possible Merger
WebMD Corp. and its strategic partner Quintiles Transnational Corp., though currently engaged in a lawsuit over their data-sharing agreement, discussed a possible merger or acquisition "as recently as January," according to court documents filed by Quintiles. North Carolina-based Quintiles, which conducts clinical trials and marketing for pharmaceutical companies and "packages health care data for its clients," has a seat on WebMD's board and a financial stake in the company, the Wall Street Journal reports. According to an affidavit filed by Quintiles Chair and CEO Dennis Gillings, the two companies discussed "potential business combinations" at a Jan. 11 meeting during which WebMD CEO Martin Wygod suggested that Quintiles should acquire WebMD. The Journal reports that such a move would be "counterintuitive," since WebMD's roughly $3.2 billion market capitalization is $1 million more than Quintiles'. An affidavit filed by WebMD Chair Michael Long states that he suggested in December the possibility of a merger "as a way of resolving a dispute over the scope of their strategic agreements signed last year," including the data-sharing agreement at the heart of the current lawsuit. Last May, WebMD agreed to provide electronic health claims data to Quintiles, which then "repackages the data for sale to its clients." On Feb. 24, WebMD stopped providing the data, citing potential privacy violations. A state court judge issued a temporary injunction the next day ordering WebMD to continue the data flow, and a federal judge is to expected to issue an interim ruling tomorrow on whether the injunction should continue (Carrns, Wall Street Journal, 3/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.