[Pharm-policy] EU compulsory license for IMS database

[love@cptech.org]

March 15, 2001    

Health
EU Threatens to Force IMS Health
To Share Data-Collection Method
By PHILIP SHISHKIN 
Staff Reporter of THE WALL STREET JOURNAL

BRUSSELS -- The European Commission is threatening to force the world
leader in drug-data research to license its data-collection method to
two of its biggest rivals in Germany, raising questions about the
relationship between copyright protection and antitrust law.

The dispute involves U.S.-based IMS Health Inc., the largest provider of
pharmaceutical data, and its proprietary system for tracking drug sales
across Germany, a service highly valued by pharmaceutical companies.

Due to the popularity of its tracking tool, IMS has been able to create
a strong position in the German market, which prompted two of its
much-younger competitors -- U.S.-based NDC Health and Belgium's Azyx
Geopharma Information Services -- to use some elements of its detailed
database, which divides the German market into 1,860 geographical units,
in its own data collection.

IMS responded by successfully suing the two rivals over copyright
infringement in a German court. The competitors then asked IMS to
license its method, which the company refused to do.

NDC and Azyx then complained to the commission's antitrust department,
seeking to use antitrust law to override copyright protection. The
commission's investigators concluded that IMS's refusal to license its
database "makes it impossible for new competitors to enter or stay on
the market in question and is likely to cause serious and irreparable
damage to the two present competitors."

IMS has two weeks to respond to the commission, after which the
commission will decide whether to require the company to license its
product "on nondiscriminatory, commercially reasonable terms."

For its part, IMS is sticking to its guns. In a statement, IMS says it
"believes that it's entitled to protect its intellectual-property assets
and that it should not be forced into negotiating licenses with its
competitors."

Meanwhile, Azyx officials argue they weren't trying to copy the IMS
system in its entirety. They say they wanted to make their interface
compatible with that of IMS, which required following the same pattern
of breaking up Germany into 1,860 so-called "bricks." The same
geographical interface would have enabled pharmaceutical companies to
compare "apples with apples" and consequently buy the services of both
IMS and Azyx, says Azyx Chief Financial Officer Bernd Sacher.

"In no way did we copy their services or steal their ideas -- we just
wanted to make sure that clients can use our data," he says. If Azyx is
banned from using the same geographic background, it won't be able to
attract any clients because of IMS's long history in the German market,
he adds. NDC declined to comment.

Write to Philip Shishkin at philip.shishkin@wsj.com