WebMD continues battle to end data pact with Quintiles
CHICAGO, March 1 (Reuters) - Internet healthcare firm WebMD Corp. (NASDAQ:HLTH) on Thursday said its agreement to provide pharmaceutical outsourcing company Quintiles Transnational Corp. (NASDAQ:QTRN) with medical and marketing data may violate privacy laws, and said it will go to court to sever the pact.
In a filing with the U.S. Securities and Exchange Commission, WebMD, which provides health information to a variety to sources, said it suspended its May 26, 2000 agreement with Quintiles on Feb. 23.
Under the agreement, Elmwood Park, N.J.-based WebMD would provide a variety of medical and marketing information to Quintiles, based in Durham, N.C.
WebMD sought to end the pact because state privacy laws may have been violated as certain data could be used to identify a specific person.
"WebMD has no information that any person has been so identified, but took the action to ensure that the data provided to Quintiles conformed to applicable law," WebMD said in filing.
However, shortly after WebMD suspended the agreement, Quintiles obtained a temporary restraining order from the Wake County, North Carolina Superior Court.
WebMD, in turn, filed a motion in Federal District Court for the Eastern District of North Carolina seeking to have the restraining order dissolved.
In the filing, WebMD said that it knew of no violation of state privacy laws, adding that, "...to the extent there have been such violations, Quintiles is obligated to indemnify WebMD for any losses which it might suffer."
The two companies are expected to meet in the Eastern District Federal Court of North Carolina in the next few days.
Quintiles spokeswoman Pat Grebe said Quintiles maintains its position that it was in compliance with all applicable privacy laws.
"(WebMD) is raising highly technical issues regarding access...but the data were used in aggregate form only," Grebe told Reuters.
Shares in WebMD firmed 1/4 to $9-25/32 around midday, while shares in Quintiles jumped 1-1/4 to $19-1/4. chicago.equities.newsroom@reuters.com)) |
