The IMS-Quintiles Merger: A Window into the Future of Pharmaceutical R&D
April 12, 2018
In October 2016, IMS Health, the dominant provider of pharmaceutical market data, merged with Quintiles to form QuintilesIMS, subsequently renamed IQVIA (pronounced “I-Q-via,” with emphasis on the “Q”). This merger is notable because Quintiles, the company acquired by IMS, was not a data company, but a contract research organization (CRO). This distinctive merger reflects recent shifts in the paradigms for drug research, development, and marketing approval.
The Formation of IQVIA
On October 4, 2016, IMS and Quintiles merged in a deal worth $9 billion. The combined company had a market value of approximately $18 billion, with IMS shareholders owning 51.4% of the combined company, and Quintiles shareholders owning the rest.[1] The combined company became the world’s largest pharma services provider.[2]
Mergers and acquisitions in the pharmaceutical data market are not unusual. In 2012, IMS acquired its competitor SDI, which had acquired another data company, Verispan, 4 years earlier. But the IMS-Quintiles merger is different because the two companies were only tangentially related, working on opposite ends of the drug lifecycle. Before the merger, IMS was one of the world’s largest pharmaceutical data providers. It collected sales data from drug manufacturers, wholesalers, and pharmacies; prescription and diagnosis data from doctors; promotion data from doctors, journals, and public media; claims data from health plans; and patient-level data. And, it sold this data primarily to drug manufacturers to support their marketing and sales.[3] Before the merger, Quintiles was the world’s largest CRO.[4] CROs are professional research firms hired by drug manufacturers choosing to outsource their drug development. They design clinical trials, recruit subjects, execute the studies, and usher the drugs through FDA approval.
The reason for a merger between two such different companies was not immediately obvious to industry observers. According to an article in the New York Times, the merger “suffers from a lack of logic … and the reasons for combining are a bit hazy.”[5] There were some expected cost savings and efficiencies—IMS’s data could help Quintiles recruit subjects for clinical trials—but those would not necessarily overcome the inefficiencies brought on by the merger.[6]
In a press release on November 6, 2017, IQVIA brought to light a more significant motivation for the merger: the goal of “faster, more predictable clinical development, innovative approaches to generating real-world evidence, [and] machine learning to improve patient care.”[7] This statement points to a key motivation for the merger: to take advantage of the growing use of “real-world evidence” in clinical drug development and other areas of the pharmaceutical market.
Real World Evidence
Real-world evidence (RWE) (or real-world data (RWD)) refers to “information on health care that is derived from multiple sources outside typical clinical research settings.” It includes “electronic health records, claims and billing data, product and disease registries, and data gathered through personal devices and health applications.”[8] Some of these sources, but not all, can collect data in real time (for example, smart-phone apps). This data is typically not collected for the purpose of studying the effectiveness, safety, or cost-effectiveness of drugs; nonetheless, it is increasingly being used for that purpose. Real-world data often comes in voluminous data sets, analyzed by powerful computers using novel techniques such as machine learning.[9]
There is a move to use RWE in some instances to replace or supplement clinical trials. Clinical trials are the gold standard of drug development—the primary source of evidence used by the FDA to evaluate the effectiveness and safety of drugs. Yet clinical trials have limitations. They are conducted in controlled settings, and their subjects are selected using narrow criteria. This design contributes to the validity of their conclusions, but it can also make it difficult to generalize those conclusions to broader patient populations in real-world settings.[10]
Real-world data can fill some of these gaps. When used in properly designed analyses, real world data can “inform therapeutic development, outcomes research, patient care, research on health care systems, quality improvement, safety surveillance, and well-controlled effectiveness studies. Real-world evidence can also provide information on how factors such as clinical setting and provider and health-system characteristics influence treatment effects and outcomes.”[11] In addition, the use of real-world evidence is often less expensive than clinical trials.[12]
The prospect of increased reliance on RWD nonetheless raises some concerns. In a 2016 article in the New England Journal of Medicine, several members of the FDA raised three concerns: (1) RWE is not usually collected with the aim of supporting research, so it may not be optimal for that use; (2) RWE may be low quality and inaccurate; and (3) the use of data from medical records, cell phones, and social media raises privacy issues.[13] They emphasized that measures should be taken to address these concerns.
The same article cautioned that the allure of RWE analysis might outstrip its actual reliability. “[M]uch of the current excitement about real-world evidence stems from the hope that access to sources of emerging data of adequate quality will, when paired with the development of more robust methods, allow greater use of observational treatment comparisons in drawing causal inferences about the treatment effects of medical products.”[14] They warn that, when RWE is used without adequate methodological sophistication, the results can be incorrect or unreliable.
Growing Use of Real-World Evidence
Given real-world data’s increasing availability and potential benefits, it is not surprising that its use is growing. It is already widely used by drug manufacturers and health insurers.
Health insurers use real world data to evaluate the effectiveness, safety, and cost-benefit profile of drugs, and they use this information to make decisions about coverage and reimbursement.[15] Pharmaceutical manufacturers use real world data to determine which patient subsets benefit from expensive therapies, and they use this information to work with payers to secure coverage for their drugs.[16]
The FDA has long relied on RWE for post-market safety monitoring of drugs; but not until recently has it started to accept its use for other applications.[17] This was prompted by the 21st Century Cures Act, signed by Obama in December 2016, which “requires the FDA to consider additional uses of evidence drawn from real-world data for drugs and devices.”[18]
Scott Gottlieb, the new Commissioner of the FDA, has strongly touted the benefits of RWE: “The more widespread use of RWE can make our medical product development process more efficient, and help lower the cost of development. More importantly, it can help make sure doctors and patients are better informed about the clinical use of new products, enabling them to make more effective, efficient medical choices.”[19]
Accelerating the drug development process is part of the Trump administration agenda, as evidenced by the President’s remarks in the State of the Union Address on January 30th. He noted the FDA’s efforts to speed access to breakthrough cures and said that terminally ill patients should have the “right to try” experimental treatments.
On August 31, 2017, the FDA published final guidance on “Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices.”[20] It is currently developing similar guidance on the use of RWE for drugs, particularly for the approval of new indications of already-approved drugs and for post-approval study requirements.[21] While Commissioner Gottlieb allows that “RWE won’t replace data from traditional clinical trial data in many cases,”[22] the demand for RWE applications is on track to surge.
IMS and Quintiles Capitalize on the Growing Demand for RWE
The merger of IMS and Quintiles is designed to create a company equipped to take advantage of the growing demand for the collection and analysis of RWD for drug R&D. Quintiles brings to the partnership its experience with clinical trials and drug development. IMS brings its expertise in managing and analyzing huge datasets, as well as its drug sales and marketing data, claims data, and patient data. The partnership will enable IQVIA to expand its collection of RWD and to apply its computing capabilities to the work of drug research and development.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views or positions of OnPoint Analytics or any of the numerous experts with whom it works.
[1] Reuters, “Quintiles is merging with IMS in a deal worth about $9 billion,” (5/3/2016).
[2] Rebecca Clifford, “IMS Health and Quintiles complete merger,” PMLive (10/4/2016).
[3] Seeking Alpha “Quintiles IMS Poised For Robust Growth Over the Next Few Quarters” (8/21/2017).
[4] Ben Adams, “Megamerger finalized as ‘QuintilesIMS’ is born,” FierceBiotech (10/4/2016).
[5] Robert Cyran, “Deciphering the Quintiles-IMS Merger,” New York Times (5/3/2016).
[6] Robert Cyran, “Deciphering the Quintiles-IMS Merger,” New York Times (5/3/2016).
[7] IQVIA, “QuintilesIMS is now IQVIA,” Press Release (11/6/2017).
[8] Rachel E. Sherman et al., “Real-world evidence: What is it and what can it tell us?” New England Journal of Medicine (2016) 375(23): 2293–97.
[9] QuintilesIMS, AccessPoint: News, views and insights from leading international RWE experts, (May 2017) 7(13).
[10] Rachel E. Sherman et al., “Real-world evidence: What is it and what can it tell us?” New England Journal of Medicine (2016) 375(23): 2293–97.
[11] Rachel E. Sherman et al., “Real-world evidence: What is it and what can it tell us?” New England Journal of Medicine (2016) 375(23): 2293–97.
[12] Rachel E. Sherman et al., “Real-world evidence: What is it and what can it tell us?” New England Journal of Medicine (2016) 375(23): 2293–97.
[13] Rachel E. Sherman et al., “Real-world evidence: What is it and what can it tell us?” New England Journal of Medicine (2016) 375(23): 2293–97.
[14] Rachel E. Sherman et al., “Real-world evidence: What is it and what can it tell us?” New England Journal of Medicine (2016) 375(23): 2293–97.
[15] Michael M. Durand, “Why Health Care Companies Are Turning to Real-World Evidence and What It Means for Communicators,” The Public Relations Strategist (10/22/13).
[16] Michael M. Durand, “Why Health Care Companies Are Turning to Real-World Evidence and What It Means for Communicators,” The Public Relations Strategist (10/22/13); Scott Gottlieb, “Advancing Public Health Opportunities with Real World Evidence,” Remarks by Dr. Gottlieb, Commissioner of Food and Drugs, to the National Academy of Sciences on the Impact of Real World Evidence on Medical Product Development, Washington, D.C. (9/19/2017).
[17] PricewaterhouseCoopers, “Real-world evidence a growing challenge for pharma,” (2017), https://www.pwc.com/us/en/health-industries/top-health-industry-issues/real-world-evidence.html.
[18] PricewaterhouseCoopers, “Real-world evidence a growing challenge for pharma,” (2017), https://www.pwc.com/us/en/health-industries/top-health-industry-issues/real-world-evidence.html.
[19] Scott Gottlieb, “Advancing Public Health Opportunities with Real World Evidence,” Remarks by Dr. Gottlieb, Commissioner of Food and Drugs, to the National Academy of Sciences on the Impact of Real World Evidence on Medical Product Development, Washington, D.C. (9/19/2017).
[20] FDA, “Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices,” Guidance for Industry and Food and Drug Administration Staff (8/31/2017).
[21] Scott Gottlieb, “Advancing Public Health Opportunities with Real World Evidence,” Remarks by Dr. Gottlieb, Commissioner of Food and Drugs, to the National Academy of Sciences on the Impact of Real World Evidence on Medical Product Development, Washington, D.C. (9/19/2017).
[22] Scott Gottlieb, “Advancing Public Health Opportunities with Real World Evidence,” Remarks by Dr. Gottlieb, Commissioner of Food and Drugs, to the National Academy of Sciences on the Impact of Real World Evidence on Medical Product Development, Washington, D.C. (9/19/2017).