The Competition and Markets Authority has approved UnitedHealth’s proposed £1.2 billion purchase of listed HealthTech firm EMIS.
The all-cash purchase by Optum UK, a subsidiary of US-based healthcare and insurance company UnitedHealth Group Inc, was approved by shareholders of Leeds-based EMIS Group in August 2022.
As both companies provide services to the NHS, the CMA launched a merger enquiry in January 2023 then rejected UnitedHealth’s proposal of divesting certain businesses to satisfy its concerns in favour of launching an in-depth investigation.
As of 2021, EMIS – which featured on our HealthTech 50 ranking this year – employed around 1,500 staff.
EMIS supplies data management systems to the NHS, including the electronic patient record system used by the majority of NHS GPs in the UK. Optum currently supplies software used by GPs when prescribing medicines, as well as data analytics and advisory services that the NHS uses to help improve overall healthcare and health service provision.
While the merging businesses do not supply competing services, Optum and its competitors use the data that EMIS holds and integrate their own software with EMIS’s electronic patient record system to compete in other markets, including the supply of population health management services and medicines optimisation software.
The CMA stated: “Following a thorough investigation, the CMA has today confirmed that the transaction does not raise competition concerns when considered against the higher legal standard that applies in Phase 2 investigations, clearing the deal to proceed.”
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The investigation confirmed that EMIS, as the lead supplier to NHS GPs across the UK, holds a particularly strong market position in the supply of electronic patient record systems. But further evidence-gathering and analysis, considering the potential impact of the merger in two markets in which Optum could limit its competitors’ access to the data held within EMIS, has found that the deal does not raise competition concerns.
In the supply of data analytics and advisory services for population health management, the CMA found that the merged business would not, in practice, be able to use the data that EMIS holds to harm the competitiveness of rivals, primarily because the NHS could use its oversight role to prevent the merged business from pursuing this kind of strategy.
In the supply of medicines optimisation software, the CMA found that a strategy that involved restricting access to EMIS’s electronic patient record system would not be commercially beneficial to the merged business, with any possible gains being limited and capable of being reduced through intervention by the NHS.
Kirstin Baker, chair of the independent inquiry group carrying out the investigation, said: “The NHS increasingly relies on digital technology and data analytics to support the delivery of high-quality healthcare. So, it is important to ensure that, as the main customer of these services, the NHS continues to have access to the options and innovations that new and developing technology can bring.
“Following a thorough investigation, careful consideration of a broad range of evidence and consultation with a variety of stakeholders, we are satisfied that this deal will not reduce competition or mean that the NHS and its patients lose out.”