March 13, 2001
(Computerworld)
Health care information provider WebMD Corp. yesterday said it has curtailed deliveries of pharmacy and medical claims data "that raise patient privacy concerns" to a North Carolina company that does contract development and regulatory submission work for pharmaceutical manufacturers.
Elmwood Park, N.J.-based WebMD cited the privacy concerns and state and federal laws as its reasons for cutting back on the amount of information it sends to business partner Quintiles Transnational Corp. in Research Triangle Park, N.C., pending a hearing scheduled to take place Friday in U.S. District Court in North Carolina.
WebMD and Quintiles are embroiled in a legal dispute that started last month over their data-sharing agreement. This week's federal court hearing is expected to center around arguments over a request from Quintiles for a restraining order that would require WebMD to resume the data deliveries.
Quintiles, which filed suit against WebMD after being notified of the plans to halt the data deliveries in late February, already obtained a restraining order from a state court in North Carolina. But WebMD said that order expired last Wednesday, enabling it to cut back on the deliveries of information in advance of Friday's federal court hearing.
The company said it is now "blocking some data originating from certain sources until Quintiles addresses WebMD's legal concerns." At issue, according to WebMD, is the need to cleanse the data to remove "elements that could enable Quintiles to identify particular patients" -- a problem that it said came to light during a recent regulatory review.
WebMD, which initially notified Quintiles that it was suspending all data deliveries, yesterday said it could resume providing some information because Quintiles cleansed its pharmacy database late last week. But WebMD said "serious legal issues remain concerning its ability to provide Quintiles with the detailed data Quintiles seeks to obtain."
Under the data-sharing agreement between the two companies, WebMD provides health claim data to Quintiles, which then uses that information to develop market research information for pharmaceutical makers and other health care companies about the effectiveness of their products.
"Maintaining patient privacy and confidentiality is of paramount importance to WebMD as well as to our customers and strategic partners," said WebMD CEO Martin Wygod in a statement. "Given the state of the law and the sanctity of patient privacy, we had no choice but to cease the flow of data to Quintiles until new data could be cleansed."
But Quintiles spokeswoman Pat Grebe called yesterday's announcement by WebMD "unwarranted" since the federal judge overseeing the case has already asked the company to continue providing data to Quintiles on an uninterrupted basis. Quintiles last week announced that the judge had left the now-expired state court restraining order in place after an initial March 5 hearing.
Despite that move, Grebe added, WebMD continues to block "certain data fields" that affect less than 10% of the data it sends to Quintiles. Grebe declined to be more specific about the data fields that are being blocked, saying that Quintiles is preparing legal documents for another court filing related to the dispute.
John Russell, a senior vice president at Quintiles, last week said it is "absolutely committed to patient privacy, as evidenced by more than a decade of maintaining confidentiality of records." And WebMD noted yesterday that the two companies are trying to negotiate "an acceptable format and procedure for future data delivery to meet the requirements of state and federal law."
But Wygod also took several shots at Quintiles as part of his statement. "It is regrettable that Quintiles has resorted to unfounded attacks on WebMD," he said. "When the facts are fully aired, it will become abundantly clear that WebMD's actions were fully justified."
Wygod also addressed reports that WebMD and Quintiles had discussed a potential business combination or joint venture, saying that any talks "were preliminary and speculative in nature." He accused Quintiles of disclosing the discussions "to divert attention away from the serious concerns we raised regarding violation of privacy laws."
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