The contract between Mc-Kesson and the trust that operates the Edinburgh Royal Infirmary was terminated earlier this month, five years into a 13-year agreement. The NHS said the supplier had received no payment for its work over the five years.
When the contract was signed in 1999, trust chief executive Allister Stewart said the project would deliver the "the most innovative hospital information project in Scotland".
The initial contract was intended to provide a complete hospital information system (HIS) by 2004, with the supplier delivering key elements of the system during the intervening years. The contract also included the provision of network and application support and helpdesks. It was scrapped without a fully working HIS system being delivered.
A joint statement from the trust and McKesson said, "Changing IT infrastructure in the UK has culminated in a situation which means it is no longer feasible to realise the vision we jointly shared for the HIS."
NHS staff that were transferred to McKesson will now be transferred back to the trust, which plans to build its own patient record system. The trust may use some elements put in place by McKesson, including parts of the Medtrak application McKesson ordered from supplier Trak.
Tola Sargeant, an analyst at Ovum Holway, said it would be unusual for a supplier to receive no payment for work over five years, even if the system failed.