Attorney General Suthers Announces Antitrust Settlement with one of Nation's Leading Providers of Electronic Drug Information Databases

DENVER - Attorney General John W. Suthers today announced his Office’s participation in the settlement of a multistate antitrust investigation into allegedly anticompetitive conduct that occurred in connection with Hearst Corporation’s 1998 acquisition of Medi-Span, Inc., then one of the nation’s leading providers of electronic drug information databases. At the time of the acquisition, Hearst also owned First DataBank, the other leading provider of these databases.

“Electronic drug information databases are used by pharmacists and other health care professionals, hospitals, health plans and governmental entities like our state Medicaid department for a variety of purposes in their day to day operations,” said Attorney General Suthers. “We became involved in this investigation because we were concerned that the State was having to pay anticompetitive prices for critical information like comprehensive clinical, pricing, and other data on prescription and non-prescription medicines,” he added.

The settlement resolves claims by the States Attorneys General that the acquisition gave Hearst an illegal monopoly in the market for these databases, and caused public entity purchasers to pay anticompetitive prices for electronic drug information. The settlement includes broad injunctive relief and requires a $925,000.00 cash payment to the states from Hearst/First DataBank.

An earlier settlement between Hearst and the Federal Trade Commission required Hearst to divest Medi-Span and to pay $19 million as disgorgement of unlawful profits. This money was deposited into an escrow fund for distribution pro rata to eligible persons in pending private class action settlements. The private settlements excluded governmental entities.

Colorado’s share of the settlement totals $36,330.10. This essentially represents damages sustained by the state’s Medicaid department, the State Department of Health Care Policy and Finance, as a result of having to pay more for integratable drug data files than they would have paid but for the defendants’ anticompetitive conduct.

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