The acquisition of a digital identity firm for healthcare used widely in the NHS has been blocked by regulators. 

Isosec, headquartered in Manchester, develops cloud-based virtual smartcards which allow staff secure access to healthcare systems and applications. 

NHS Digital funded the use of the solution for NHS organisations which needed them as part of their COVID-19 response. The company has more than 120 NHS customers, with particular focus in the Acute, Primary Care and CCG sectors.  

In late December it was announced that Imprivata, based in Boston in the US and which delivers end-to-end authentication and access management solutions for healthcare organisations, was to acquire Isosec. 

The firms said the combined technology would provide customers with more ways to securely access clinical workstations and applications and further streamline secure remote working. 

However, the deal has been abandoned after the Competition and Markets Authority found competition concerns. 

Imprivata and Isosec provide secure authentication management solutions to healthcare providers in England. These technologies can give staff protected access to sensitive patient data sourced from a central NHS IT system,” it stated. 

In its initial ‘Phase 1’ investigation, the CMA found evidence indicating that Imprivata and Isosec are important rivals in this area and that part of the motivation for the takeover was the removal of a competitive threat from the market. Competition between these companies was also expected to grow in the future with the introduction of new products. 

The CMA was concerned that, if the merger went ahead as planned, it would have an impact on NHS and other healthcare providers across England and could potentially lead to taxpayers receiving poorer value for money in relation to these services. In addition, the companies’ customers, including the NHS, would have limited other options in terms of suppliers. 

The CMA announced on 29 April 2021 it would refer the deal to an in-depth Phase 2 investigation unless the parties offered acceptable undertakings to address these competition concerns. As the transaction has been abandoned, the deal will now not be referred.