In a brief filed on December 29, the Healthcare Distribution Alliance contends that none of TraceLink’s claims of an “antitrust conspiracy” to control access to data arising from compliance with the Drug Supply Chain Security Act (DSCSA) have merit, and for that reason the suit should be dismissed. A spokesperson for TraceLink tells Pharmaceutical Commerce, after the HDA brief was filed, that “TraceLink will be opposing that motion … [with a response that] will specifically detail how TraceLink’s complaint identifies that HDA and its co-conspirators have violated antitrust and state law.”
The suit (Case 1:17-cv-01197-AJT-IDD) has been filed in the US District Court for Eastern Virginia.
The original complaint puts TraceLink’s Life Sciences Cloud, a service to collect, store and transmit serialized product information about pharma shipments, in opposition to the Origin service which was launched last summer by HDA. TraceLink contends that HDA and its member wholesalers have conspired to contain DSCSA data within its proprietary data service (Origin), and that this has already caused lost business for TraceLink.
In its counterclaim, HDA contends that “the entire premise of TraceLink’s proffered antitrust conspiracy—i.e., that a defendant [HDA and its member wholesalers] conspired to reduce competition and create a monopoly in a market in which it is the buyer—has been adjudicated by courts to be implausible as a matter of law.” That is, rather than reducing competition in a market for software, HDA has actually increased competing options—by introducing the Origin service—and thus is “procompetitive” rather than anticompetitive.
Moreover, both HDA’s brief and TraceLink’s original suit note that Origin and Life Sciences Cloud are not apples-to-apples offerings. Origin has been set up to create a repository of pharma product GTINs (Global Trade Item Numbers) only, while TraceLink’s service (in TraceLink’s own words) “provides the user not only with this information, but also with information regarding, among other things, when and to whom the product was sold.”
The lawyers writing both TraceLink’s and HDA’s filings seem to be focused on the monetary value of the organizations’ software (and indeed, the market for track-and-trace software overall), but the real story will be how the controlling interest in the data itself plays out. Having a repository that contains most or all information on products in commercial distribution will be a valuable asset (although the entire pharma supply chain—manufacturers, distributors and dispensers—are fairly united in not having a central repository where all this data is in one place). To draw a rough comparison, IMS Health (now “IQVIA”) has built up a multibillion-dollar business over the years by becoming the dominant player in collecting pharmaceutical sales data, and then selling it back to the pharma industry itself.
Finally, although there is probable validity in TraceLink’s claim that it has lost business after the introduction of Origin, it is also celebrating one milestone after another in winning business from pharma for its DSCSA software. The company’s latest news release (Jan. 8) notes that “394 pharmaceutical and contract manufacturing customers have selected the Company’s serialization solutions to comply with regulations in the US, Europe, China, India and South Korea,” which “represents a 139% increase year-over-year in manufacturing customers and an industry record in the life sciences track and trace market.” Shabbir Dahod, TraceLink CEO, adds that “We’ve successfully processed and submitted nearly half a billion compliance documents to regulators on behalf of these customers—and have yet to see demonstrable proof from any other solution provider that comes close.”