Switch Glitch: States Slap Merck-Medco Marketing Tactics

By Conlan, Michael F. | Drug Topics, November 2, 1995 | Go to article overview

Switch Glitch: States Slap Merck-Medco Marketing Tactics


Conlan, Michael F., Drug Topics


States slap Merck-Medco marketing tactics

For the sixth time in two years, a major pharmaceutical firm has settled charges with states that claimed its advertising and marketing practices violated consumer protection laws. This time it was Merck & Co., which agreed to change the way its pharmacy benefit management subsidiary, Medco Containment Services Inc., conducts switch programs. Merck, without admitting any law violation, will pay 17 states $1.9 million to defray their investigation costs.

"When health plan managers, who are assumed to be promoting costcontainment, can use confidential information to send prescription business to themselves, you've got the fox guarding the chicken coop," said Minnesota attorney general Hubert H. Humphrey III, who coordinated the multistate effort. "Patients need to understand that health conglomerates like Merck-Medco may be driven by profit motive as much as by the cost-containment motive."

Said Dan Lungren, attorney general of California: "This settlement will benefit tens of millions of consumers nationwide, and perhaps most important, it will allow doctors and consumers to make informed choices about prescription drugs."

The states alleged that when Medco pharmacists didn't say that they were employed by Medco, that Medco was owned by Merck, and that the drug they wanted the physician to switch to was made by Merck, consumer protection laws were violated. Merck-Medco pledged to address those concerns by having its switch callers fully disclose the relationships. Under the settlement, the companies also agreed to:

* Substantiate and honor claims of cost savings attributed to switching Rxs

* Distribute four million brochures advising consumers about how switch programs operate, that Medco is owned by Merck, and that patients can contact their physician if they do not want their prescription changed

* Tell consumers that their prescription drug usage and medical histories could be made available to their employer and advise them on the extent that confidential information will not be disclosed

"These new guidelines are consistent with our business goals, the needs of our customers, as well as with the goals of the states," said Per G. H. Lofberg, president of the Merck-Medco Managed Care Division. "We are confident that our current practices will benefit our plan sponsor clients, their plan members, and Merck-Medco as health-care delivery continues to evolve.

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