Dive Brief:
- A federal judge dismissed several claims in the high-profile antitrust lawsuit against electronic health record giant Epic on Friday, but allowed other allegations by startup Particle Health to continue.
- Last year, Particle sued the EHR vendor, arguing Epic had used its large market share to crush competition in tools for payers. Epic filed a motion to dismiss the suit in December.
- The judge agreed with Epic on five of the nine claims, dismissing Particle’s assertions that the vendor had maintained a conspiracy to uphold its market dominance, as well as claims of defamation and trade libel. However, the court declined to throw out three federal antitrust claims and Particle’s allegation that Epic had interfered with a business contract.
Dive Insight:
Particle, a startup founded in 2018 with the goal of helping healthcare organizations share and analyze data, filed its lawsuit in September 2024 in the Southern District for New York.
The company argued that Epic was using its position as a major EHR vendor to expand into and control the market for payer platforms, or tools that allow insurers to request and access large numbers of medical records as well as conduct analyses.
Last spring, Epic filed a complaint with interoperability framework Carequality, claiming Particle was allowing its customers to inappropriately label their data requests and hiding the identities of organizations asking for records, according to the suit.
The vendor also stopped responding to EHR requests from 34 Particle customers, and introduced a new policy for Particle users that required them to provide “in-depth information” not required for other organizations, Particle said in the complaint.
That meant the onboarding time for new customers ballooned from less than two days to over a month in some cases, according to the suit. The startup claimed the Carequality dispute as well as Epic’s other actions and statements to its customers “scared away” potential Particle users.
But Epic moved last year to dismiss the suit entirely, arguing Particle hadn’t determined the existence of a relevant product market and couldn’t plausibly claim that the vendor engaged in anticompetitive conduct.
However, the judge found Particle had proven well enough there is a market for payer-specific tools and that insurers can’t easily turn to other software for retrieving medical records.
“It remains to be seen whether Particle will be able to establish willful acquisition of market power in discovery,” Judge Naomi Reice Buchwald wrote in the Friday order. “However, at this stage of the litigation, Particle has identified conduct sufficient to raise a non-speculative inference that Epic’s actions were uneconomic and inconsistent with the rational behavior of a legitimate competitor.”
An Epic spokesperson in a statement Friday said the company looks forward to “the opportunity to present evidence to prevail on the remaining claims.”
Particle cheered the decision in a Saturday statement. CEO Jason Prestinario saying he was “very pleased” with the outcome, noting the court didn’t throw out the startup’s monopolization, attempted monopolization and monopoly leveraging claims against Epic.
“While a few of the claims didn't survive, Epic’s motion to dismiss was DENIED on all 3 of the core monopolization antitrust claims,” he said. “This is the first time in Epic's history that an antitrust case against them has gotten to this point.”
