Corporate giants enter electronic medical record market, form Amicore

Three pharmaceutical and technology companies, Pfizer, IBM and Microsoft, join forces to sell software to physicians -- despite a less-than-successful track record from other big name firms.

By Tyler Chin, amednews staff. Nov. 12, 2001.

Pfizer Inc., IBM Corp. and Microsoft Corp. have launched a new company that will sell electronic medical records software and services to office-based physicians.

Seven months after they announced their intention to enter the health care technology market, the pharmaceutical and technology giants in October formed Amicore Inc. to serve as their vehicle.

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Prior to its launch, New York-based Amicore acquired PenChart Corp., a Glastonbury, Conn., firm that sells a system that combines scheduling, registration and electronic medical records functionality.

That system -- used by 300 doctors at 20 locations -- lets physicians enter, collect and access patient data on pen-based computer tablets at the point of care over a wireless local area network. It provides the core technology Amicore will sell and build upon, said Jim Fitzsimmons, Amicore's CEO.

For example, Amicore plans to partner with other companies to offer managed care transaction processing capability, he said. The firm will deliver technology to physicians via an application service provider model, meaning that doctors will be able to access it over the Internet.

At this time, physician groups pay license plus annual maintenance fees for the PenChart system, which requires them to incur significant start-up costs. But to make its product more affordable to physicians, Amicore will roll out a monthly subscription pricing model later this year, Fitzsimmons said. Pricing has not been finalized yet.

Selling to physicians

Amicore will use its own direct sales force to market to medical groups of 10 physicians or less, Fitzsimmons said.

Pfizer added that its large pharmaceutical sales force would generate and identify leads for Amicore to pursue, but Pfizer's drug sales representatives would not market Amicore to physicians.

In selling electronic medical records to doctors, Amicore will face a host of competitors who have unsuccessfully tried to crack that market for years.

Fitzsimmons, however, believes Amicore can succeed in automating physician offices where others have failed in part because of the corporate stature of its backers. Those backers also have invested a significant sum of money in Amicore and have made a long-term commitment to the venture, he said.

IBM, Pfizer and Microsoft did not disclose how much they invested in Amicore.

Some observers agree that the prominence of Amicore's founders and their deep pockets will help Amicore, but those factors don't guarantee success in the electronic medical records market.

"It is a very difficult task," said David Francis, a managing director with the Nashville office of Jefferies & Company Inc. "Other global companies have tried and virtually all of them have failed."

Those prominent failures include HealthMatics, a joint venture between GlaxoSmithKline and Physician Computer Network Inc. that shut down in 1999 after losing more than $50 million, Francis said.

Another is Medscape, which has invested more than $100 million since its inception to develop and sell an electronic medical record and has little to show for it, he said.

Stock in Medscape, a publicly held company, was recently trading for less than 40 cents.