Transcript Merck-Medco Finds the Right Prescription to Combat Dot.com Fever

Merck-Medco Finds the
Right Prescription to
Combat Dot.com Fever
Sarah Williamson
Management Information Systems
April 25, 2005
Case Analysis
Largest pharmacy-benefit manager in US
 Dot.com boom in late 1990’s
 Did not want to lose online market
 Website to fill and process prescriptions
for a client base of over 52 billion
 Required extensive research best way to
utilize database warehousing

Why go online as a
pharmaceutical?
Competition
 Lose clients
 Lower overall costs
 Eliminate intermediaries
 More efficient sales
 Quick, inexpensive customer service

Building a Website from Scratch

Long-term benefit:
 Company-specific
operating system
 Highly reliant upon own customer database
 Customize electronic payment systems
 Personalized pages and customer selfservice
 Clear and secure disintermediation
Data-driven DSS



Analyze large pools of information, take out
useful bits and organize them
Used to build data warehouses
Online analytical processing and data mining
used to analyze the information
 Patient
identification
 Service dates
 Costs
 Quantities of medication dispensed
 Occasions the client used customer service
Recommendations


Short term: Use the new Internet business not
only to adhere to the needs of current
beneficiaries, but also to target new markets
Long term: Be honest
 VIOXX
® was prescribed to 91 million people
 Blood clots, heart attacks, strokes, sudden cardiac
death, convulsions, birth defects all found by the
American Medical Association and FDA in 2002
 VIOXX ® was not pulled from the market until 2004
 Now, Merck-Medco’s legal costs will reach $12 billion
(at about $200,000 per lawsuit)
Recommendations
Social responsibility is not avoidable
 Merck-Medco no longer exists

 Merckmedco.com
is now re-directed to
medco.com
 Merck.com is online as another Internet
pharmaceutical