October 15, 2001
(Computerworld)
Quintiles Transnational Corp. and WebMD Corp. have settled a lawsuit and agreed to cease information-sharing and all other business activities starting March 1.
In terminating the agreement, WebMD also agreed to buy back for $185 million all 35 million shares of WebMD common stock held by Quintiles.
In a joint statement Friday, Quintiles Chairman Dennis Gillings and WebMD Chairman Martin J. Wygod said, "We recognize that the discussions over the past several months have been difficult and the issues complex, but we're both pleased with the outcome. We believe that this agreement, which allows each company to pursue its own strategy, is to the mutual benefit of both companies."
The agreement also gives Quintiles a portion of the profits if WebMD is acquired, or if its Envoy Corp. subsidiary is sold by June 30, 2004. WebMD said it isn't considering either possibility.
WebMD provides Quintiles with pharmacy and medical claims data that's collected by Envoy. WebMD purchased Envoy from Quintiles in a cash and stock-swap deal last year. Part of the deal required WebMD to continue funneling Envoy data to Quintiles.
In February, Atlanta-based WebMD stopped submitting customer data to Research Triangle Park, N.C.-based Quintiles. WebMD cited privacy concerns and the Health Insurance Portability and Accountability Act as reasons for terminating the business agreement.
Shortly thereafter, Quintiles sued. A North Carolina state court and, subsequently, U.S. District Court Judge Terrence Boyle ordered WebMD to continue the unaltered flow of health claims data to Quintiles pending the outcome of the lawsuit (see story).
Quintiles uses the information to perform market research for pharmaceutical makers and other health care companies about the effectiveness of their products.
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