Brussels, 06/07/2001 (Agence Europe) - As we pointed out, the European Commission has adopted a decision enjoining IMS Health, the top German company in data collection on pharmaceutical product sales and prescriptions, to grant its competitors a licence allowing them to use its « structure made up of 1860 segments ». After detailed analysis, the European executive body considered that IMS's refusal to grant a licence for the use of its structure represented at first sight an abuse of a dominant position. This refusal prevents new competitors from entering into or maintaining themselves on the market for data on pharmaceutical product sales and may be seriously prejudicial to its current competitors, NDC Health (United States) and AzyX Geopharma Services (Belgium). The « structure made up of 1860 segments », set up by IMS at the beginning of the 1970s in Germany in co-operation with pharmaceutical companies is a data accountancy method for regional sales. The « 1860 segments » correspond to 1860 zones or « squares ». This is a source of information which has become essential for pharmaceutical companies, allowing them to allocate sales areas, develop incentive systems for their commercial agents and to know their market share as well as sales trends over time.
Last March, the Commission sent IMS a communication of grievances in order to impose provisional sanctions, in which it asked for comments (from IMS). On July 3, it decided to adopt provisional measures against it (IMS), asking it to pass on, in return for a fee, its licence to its current competitors in non-discriminatory and commercially reasonable conditions. The Commission considers that exceptional circumstances justify the adoption of such measures and the injunction to grant a licence, « a step which is rare and will remain so in European competition policy». Commissioner Monti justified the decision as follows: « the refusal by IMS to grants the licence has meant that the pharmaceutical industry in Germany has locked itself off economically into this structure and has tied up competition in the market ».
As a reminder, in 2000 IMS filed a lawsuit at the Frankfurt court against NDC Health and AzyX Geopharma Services stating that they had infringed IMS copyrights in its accountancy method. The court had ruled in favour of IMS and banned the two competitors from using its method or any other structure derived from it. Following this ruling, NDC and AzyX asked IMS to grant them a licence, a step which was not taken. NDC then decided to file a complaint with the Commission in December 2000, pointing out that this refusal was an abuse of a dominant position. So as to assess the merits of this complaint, the Commission examined if there was a real and practical possibility for companies to use another structure which would not infringe IMS copyrights. It noted that the German pharmaceutical sector was very dependent on the IMS structure and that it would not be viable for companies from the sector to use information provided by another structure. It also concluded that the IMS competitors were unlikely to succeed with another structure and to sell information obtained in this way without infringing IMS copyrights.
We would clarify that the provisional measures adopted are not a final decision in terms of a violation of European competition rules, which is yet to be taken. IMS may appeal to the European Court in Luxembourg by submitting a request to delay implementation (of these measures).
The company NDC Health welcomed the decision by the Commission against IMS whose refusal to grant a licence for its structure had, it said, the aim and the result that all competitors were eliminated on the German market. Roland Lederer, responsible for the German subsidiary of NDC Health, welcomed this decision in these terms: "This is a major victory for competition in the European Union. It creates a useful precedent for companies seeking to bring about competition in other Member States with similar constraints. Our clients, the pharmaceuticals companies, will be delighted by the conclusions and we impatiently await an equitable and reasonable licensing agreement on the part of IMS that will allow us to compete on a loyal basis".