Much Ado About Merck Marketing

I'd suggest the money spent on this fiasco be put to nutrition education in an effort to prevent and reverse diabetes rather than promote drug sales.

A group of labor unions is launching a campaign that accuses CVS Caremark Corp. of violating patient privacy and improperly pushing doctors to prescribe a costly prescription drug.

Change to Win, a group of unions that represents about six million workers, said CVS's pharmacy benefits management business has been urging doctors via a letter to add Merck & Co. diabetes drug Januvia to specific patients' treatments. The letter, obtained by the union group, said CVS identified the diabetes patients through a review of prescription-drug claims processed by its Caremark unit.

A line at the bottom of the letter says Merck paid for the mailing. Neither Merck nor CVS would say how much Merck paid, and the drug maker also declined to say whether the mailing boosted Januvia sales.

CVS said the union group's actions are rooted in a dispute about workplace rules. The unions represent several thousand CVS workers. The Woonsocket, R.I., company said the unions have been attacking CVS for more than a year, including objecting to two recent acquisitions.

Januvia is as much as eight times more expensive than many other diabetes treatments, according to a recent study. Some medical experts say patients may not need the drug and may respond just as well to older, cheaper treatments.

The CVS letter was previously reported by Phoenix Business Journal.

Change to Win says the Januvia letter is an example of CVS putting its interests ahead of the businesses that pay it to manage employee prescription-drug benefits. CVS became a big player in the pharmacy-benefits business when it acquired Caremark, then the nation's second-largest PBM, for about $27 billion in 2007.

A Merck spokeswoman said the Whitehouse Station, N.J., company paid for the mailing "to help inform physicians about additional treatment options." She added that "no personal information about patient participants in the plan are provided to Merck." The letters were sent by CVS Caremark, not Merck.

CVS said it does not improperly try to switch patients to more expensive drugs and protects the privacy of plan participants' health information. As for the Januvia mailing, CVS said it was part of a program to provide information to physicians and that doctors make the ultimate decision about prescribing a drug.

Employers and insurers hire PBMs with the goal of keeping costs low while providing access to a wide range of treatments.

In recent years, PBMs have been accused of favoring drugs that generate rebates and high profit margins. Six years ago, some patients complained about a letter from Longs Drug Stores urging the patients to switch to a new version of the osteoporosis treatment Fosamax. That mailing also was paid for by Merck.

The union campaign, set to be announced Friday, comes as CVS's PBM business has struggled. In its most recent quarterly earnings report, announced last month, revenue in the PBM unit fell about 1% to $10.6 billion.

Change to Win's executive director, Chris Chafe, said the goal of the CVS campaign is to change state laws to force PBMs to disclose to customers all payments or rebates they receive from drug companies; limit the amount of patient information the PBMs can disclose; and require that any switching of drugs results in lower costs for PBM customers.

Mr. Chafe said CVS was targeted because of its large role in the retail drug business and the PBM industry, and because the company manages prescription benefits of many union members. Change to Win's members include the Teamsters and the Service Employees International Union.

Write to David Armstrong at david.armstrong@wsj.com
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