Minnesota Takes The Lead On Agreement 
                  To Protect 41 Million Americans  

    ST. PAUL, Minn., Oct. 25 /PRNewswire/ -- Minnesota Attorney 
General Hubert H. Humphrey III today announced a 17-state consumer 
protection settlement with two of the nation's largest health care 
companies that will require them to substantially reform their 
methods of marketing prescription drugs.  The settlement will 
affect about 1 of every 7 Americans. 

    The states' action addresses consumer protection aspects of a 
merger of Medco Containment Services Inc., a huge prescription 
drug benefit company, with Merck & Co. Inc., one of the world's 
largest pharmaceutical companies.  The states allege that medical 
information obtained by Medco was used to try to convince doctors 
to switch patients to Merck products, and that their failure to 
disclose important information to prescribing physicians and 
consumers violated state consumer laws.  In so doing, Humphrey 
alleges that Medco's historical function of cost-containment was 
changed to include a marketing function to increase the profits of 
its parent company. 

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

    Here is how Medco's program of telephoning doctors works:  
Using her best medical judgment, a doctor prescribed a drug made 
by a company other than Merck.  When the prescription reached one 
of Medco's mail service pharmacies, a Medco-employed pharmacist 
called the patient's doctor, identifying himself as the patient's 
pharmacist.  The Medco pharmacist urged the doctor to switch the 
prescription to a new drug, often one made by Merck.  The states 
allege that the Medco pharmacist's failure to disclose that he is 
an employee of Medco, that Medco is owned by Merck, and that the 
drug is a Merck product violates state consumer protection laws.

    The settlement requires significant managed care reforms and 
measures to protect consumers' privacy rights. 

    -- Full Disclosure Required.  Under the settlement, Merck and 
Medco have agreed to disclose to consumers' doctors that the 
pharmacist is calling on behalf of Medco for its subsidiary and 
the pharmacy is owned by Merck.  They must also disclose the name 
of the manufacturer of the drug the Medco pharmacist is 
recommending, including Merck. 

    -- Clarification of Cost Savings Claims.  The companies are 
also required to be prepared to substantiate and honor claims of 
cost-savings resulting from the switched prescription. 

    -- Consumers Advised of Rights.  Under the settlement, Medco 
has distributed about 4 million brochures to advise consumers how 
the program to switch prescriptions works, that Medco is owned by 
Merck, and that consumers may contact their doctor if they do not 
want their prescription changed. 

   -- Privacy Issues Divulged.  Medco must advise consumers about 
the extent to which confidential information in Medco's consumer 
files will remain confidential, including the fact that medical 
histories and prescription drug usage could be made available to 
consumers' employers. 

    The companies will also pay over $1.9 million to the states -- 
$115,000 to each of the 17 states, to cover investigation costs 
and attorney fees, or for consumer education purposes.  Merck and 
Medco's agreement to implement the reforms may provide a national 
model for others in the health care industry, according to 
Humphrey. 

    "The priorities of our health care system should be to deliver 
the highest quality care for the lowest possible cost," Humphrey 
said. "With health plan managers increasingly in the middle of the 
doctor- patient relationship, full disclosure is needed so 
consumers and doctors can make fully informed decisions about 
recommendations made by the health plans." 

    Joining Minnesota in the settlement were the attorneys general 
of Arizona, California, Connecticut, Florida, Illinois, Iowa, 
Maryland, Massachusetts, Missouri, New Mexico, New York, North 
Carolina, Pennsylvania, Texas, Vermont, and Wisconsin.  This is 
the sixth multistate settlement led by Humphrey addressing the 
nationwide pharmaceutical industry practices and reflecting the 
increased priority placed by attorneys general in targeting law 
enforcement resources to promote changes in the advertising and 
marketing of prescription drugs. 

    The settlement agreement, known as an Assurance of 
Discontinuance under Minnesota law, was filed today, with a court 
order approving it, in Ramsey County District Court in St. Paul.  
The settlement is not an admission of any law violation, but is 
legally enforceable as a court order. 

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