The Competition and Markets Authority has provisionally cleared 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 Phase 2 investigation, overseen by an independent panel, has now provisionally found the merger does not raise competition concerns.
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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 found the combination of this position with Optum’s activities should not present competition concerns.
In the supply of population health management services, the independent panel provisionally found that the merged business would not, in practice, be able to use the EMIS business to harm the competitiveness of rivals. This is primarily because the NHS would be able to use its oversight role to prevent the merged business from pursuing this kind of strategy.
In relation to the supply of medicines optimisation software, the independent panel has provisionally found that it would not be commercially beneficial for the merged business to restrict access to EMIS’s electronic patient record system. In particular, a more detailed analysis of the market shows that such a strategy would likely be unprofitable with any possible gains being limited and capable of being reduced through intervention by the NHS.
“Digital technology and data analytics play an increasingly important role in supporting high quality healthcare in the NHS and so it’s important we investigate this deal thoroughly,” said Kirstin Baker, chair of the independent inquiry panel carrying out the investigation.
“We want to ensure the NHS continues to benefit from innovation and efficiencies brought about by technology services competing for its business. After carefully considering a broad range of evidence, we have provisionally found that this deal is not expected to harm competition or adversely affect patients.”
The CMA will now consult on the findings and listen to any further views – with a deadline of Friday 1st September – before reaching a final decision and issuing a final report on 5th October 2023.