IQVIA sued by feds to block deal that would see it dominate digital pharma ads market

The Federal Trade Commission's (FTC's) concerns regarding a significant pharma ad deal between IQVIA, the leading biopharma data provider, and Propel Media, the owner of pharma digital ad specialist DeepIntent, have materialized as the agency is now suing to block the acquisition. 

The FTC, which appears to have woken up this year and got out its red pen for a number of biopharma pacts, said the deal would inevitably give IQVIA a market-leading position in advertising for healthcare products, namely prescription drugs, to doctors and other healthcare professionals.

According to the official complaint filed by the FTC, the merger would result in a heightened motivation for IQVIA to withhold critical information, hindering competition among rival companies and potential new entrants. Additionally, the complaint asserts that the merger would lead to decreased market competitiveness.

IQVIA is one of the world’s largest holders of pharmaceutical sales, prescription and patient record data, something that could, given its reach, allow it to monopolize the pharma advertising market.

The proposed transaction and the subsequent challenge by the FTC come after IQVIA's acquisition of Lasso Marketing, another pharma and healthcare ad technology company, for $445 million last year. This move reflects IQVIA's strategic intention to further expand its presence in the lucrative pharma advertising industry, which is worth billions of dollars annually in the U.S. alone.

The FTC’s complaint alleges that the Propel deal would “eliminate head-to-head competition between Lasso and DeepIntent, driving up prices and reducing quality and choice.”

The FTC is seeking a temporary restraining order and injunction in federal district court to stop the deal.

IQVIA told Fierce Pharma Marketing that it was “disappointed by the FTC’s decision," as a spokesperson for the company said the deal was meant “to help its customers provide information to doctors and patients to improve healthcare and health outcomes.”

IQVIA said it has been working “cooperatively” with the FTC for almost a year to work through its concerns but that the FTC’s complaint “fundamentally misunderstands the facts and seeks to inappropriately apply the law,” the spokesperson added.

The firm is not looking to back away anytime soon. “[We] strongly believe this acquisition will benefit our customers and will continue to pursue authorization to close the transaction expeditiously,” the company said.

In May, Politico first reported the story about the FTC's concerns, citing anonymous sources familiar with the deal. These sources informed Politico that the FTC investigation, which had not been publicly disclosed, had been underway for several months.

Although direct-to-consumer TV advertising continues to dominate the pharmaceutical industry, digital advertising online and through nonlinear services is rapidly gaining momentum. Industry estimates suggest that this segment could potentially reach a value of up to $8 billion annually, with notable growth observed in the life sciences sector.

IQVIA, which made $14.4 billion last year, is the result of a 2017 combination of CRO Quintiles and biopharma and health data services firm IMS Health.

“Protecting competition in the emerging health care programmatic advertising market plays a critical role in lowering health care costs, including the cost of prescription drugs,” said FTC Bureau of Competition Director Holly Vedova in a July 17 release.

“Given the rampant consolidation across the pharmaceutical industry, it’s critical that the market for health care product advertising remains competitive to ensure that patients and their doctors have access to high quality, affordable products,” she added.