1. Merck-Medco Finds the Right Prescription to Combat Dot.com Fever Sarah Williamson Management Information Systems April 25, 2005

2. 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

3. Why go online as a pharmaceutical? Competition Lose clients Lower overall costs Eliminate intermediaries More efficient sales Quick, inexpensive customer service

4. 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 self- service  Clear and secure disintermediation

5. 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

6. 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)

7. 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