Reuters has sold its GP software operations to a French company, Cegedim SA.

To be renamed In Practice Systems, the business - formerly known as VAMP - was acquired by Reuters in 1994. It is the second-largest UK supplier of GP software and has 2,200 user sites - giving it 20 per cent of the market, with annual sales of£18.5m.

The new managing director of In Practice, Mike McSweeney, said he had written to all the company's GP customers and to health authorities, giving assurances on the future. 'We will continue to support the product line as it is - if anything we will strengthen it. All the previously announced RFA4 and year 2000 upgrade plans will be continued under Cegedim.'

The National VAMP user group said it was 'pleased that the company is returning to a healthcare portfolio and will form such a significant part of Cegedim's stable'.

The group has a fallback in the form of a legal undertaking called an escrow agreement which means that possession of the software source code is guaranteed if support were to be withdrawn.

The disposal is the latest of many in the GP systems market, though so far it is mostly smaller companies that have been acquired.

Ewan Davis, managing director of competitor AAH Meditel, commented: 'The sale of the second largest player is bound to cause instability in the market. It's part of a wider trend of major companies exiting the NHS market, and the service needs to look closely at why it's happening.'

Many smaller suppliers will be hit by the cost of upgrading their customer base to year 2000 and RFA4+ compliant versions, he said. About 30 per cent of GPs are expected to have to replace their practice computers before the millennium.

Cegedim is a newcomer to the UK medical systems market, though it has a large French customer base for its practice management software and private intranet. Most of its£100m revenue comes from selling software and data to the pharmaceutical industry - a business plan it hopes to try in Britain, said Cegedim director Pierre Marucchi. 'Our main business in France is information services over our private network, in co-operation with pharmaceutical companies. We hope to do the same thing with In Practice using NHSnet, perhaps collecting economic and prescribing practice data from doctors to sell to drug companies. There is a big opportunity for that in the UK because the level of computerisation of doctors is so far ahead of Europe.'

Other systems companies are also looking to the pharmaceutical industry to fund their operations in the GP market. These include NHSnet contractor Syntegra, with its Healthnet Plus package, and Medidesk, the new GP software supplier owned and promoted by a consortium of drugs companies.