Medco

A federal judge in Baltimore will dismiss an antitrust suit filed by Merck Medco Managed Care Inc. against Rite Aid Corp., Giant Food Inc. and other drug chains.In a memo dated Friday, U.S. District Judge Benson E. Legg informed the parties of his intentions to save them the trouble of preparing for the trial, scheduled to begin May 26.A formal order dismissing the case will be filed by the end of the month, he wrote in the memo. The suit claimed the drug chains had conspired in their refusal to participate in a prescription drug plan for 90,000 Maryland state employees and retirees that Medco was to have managed.

Human Genome Sciences Inc. said yesterday that it completed financing for a new $40 million human protein production plant in Rockville.The deal saves the company from tapping into its own cash reserves or issuing new stock to raise capital for the project, company officials said.The company has signed a long term lease for the $40 million facility with the Maryland Economic Development Corp. The quasi-state agency will own the 80,000-square-foot building and land.Human Genome has the option to purchase the building during the lease period, state and company officials said.

The Federal Trade Commission has dropped its investigation into whether pharmacy chains violated antitrust rules when they refused to participate in a Maryland state employee drug benefit plan, the agency confirmed yesterday.Although the FTC does not comment directly on investigations, it released a "closing letter," dated June 17, that said, "Upon further review of this matter, it now appears that no further action is warranted by the commission at this time."Rite Aid Corp., one of the chains involved, first announced the agency's action yesterday.

The state's Board of Public Works will be asked to approve today a contract with PCS Health Systems to provide pharmacy benefits to state employees.The Department of Budget and Fiscal Planning is recommending approval of the bid from PCS, of Scottsdale, Ariz., which was the lowest in cost and which received the highest technical rating.PCS has held the contract for several years. Last September, however, PCS was underbid by Merck-Medco Managed Care of Montvale, N.J., and the Board of Public Works voted to award the contract to Merck-Medco.

Merck-Medco, the pharmacy benefits manager that lost a state contract when big pharmacies refused to participate, yesterday sued Rite Aid and three other pharmacy groups, charging they had illegally conspired to organize a boycott.Other defendants in the suit filed yesterday in federal court in Baltimore, charging violation of state and federal antitrust laws, are NeighborCare Pharmacies, Giant Food and the EPIC pharmacy network.Medco, based in Montvale, N.J., won a contract last fall to manage the prescription benefits plan for 90,000 Maryland state employees and retirees, plus their dependents, with a bid estimated to save the state $60 million over four years compared to the old contract.

Federal antitrust investigators are probing the steps that Maryland pharmacy chains took to persuade the state to cancel a proposed prescription drug plan for state employees.The prescription plan would have meant much lower profits for druggists, but pharmacy executives yesterday denied any wrongdoing.Maryland's Board of Public Works canceled a deal under which the insurance contract for the prescription drug plan covering 200,000 state employees, retirees and their dependents would have been awarded to Medco Containment Services Inc. as of Jan. 1.The Dec. 27 vote derailed a contract that would have saved the state an estimated $60 million over four years.

Faced with a standoff between a cost-cutting pharmaceutical company and several large pharmacy groups, the state yesterday pulled the plug on a controversial new prescription plan for 92,000 Maryland government employees and retirees and their dependents.Saying it doubted that Medco Containment Services Inc. could fulfill the terms of its contract, the state said it will extend the old plan, due to expire Sunday, for 90 days.In the interim, the state will put the contract out for new bids.

THE PHONE CALLS are pouring into Annapolis. Why? Because the government switched prescription-drug plans to save money and in the process upset 200,000 state workers, families and retirees.It illustrates why bringing down health-care costs isn't easy. While the state saves $60 million over four years by contracting with Medco Containment Services Inc. to run its employee drug plan after Jan. 1, workers are worried about a decline in service and convenience. Pharmacies are in an uproar because they are getting squeezed by Medco so drastically the biggest chains have refused to sign up.As a result, Medco scrambled to patch together a network of pharmacies large enough to satisfy the state -- not an easy task because the boycotting chains account for 60 percent of Maryland's pharmacies.

Under pressure to prove that it can deliver promised services, the state's new pharmacy-benefits manager yesterday submitted a list of participating pharmacies to the state.Medco Containment Services Inc. is scheduled to take over the prescription program for 92,000 state employees and retirees on Jan. 1. The state will determine in the next few days whether Medco has enough drugstores in its network to meet the terms of its contract.Meanwhile, the state attorney general's office confirmed that it is looking into the dispute between Medco and the pharmacies.

Worried that thousands of state employees and retirees might have trouble filling their prescriptions after the first of the year, top state officials yesterday threatened to scrap the state's new pharmacy services contract.The controversy arose after Giant Food and several other drug chains refused to participate in the state pharmacy program after Medco Containment Services Inc. takes over Jan. 1. The pharmacies say they will lose money at the cost-cutting rates Medco, the low bidder when the contract was awarded in September, is willing to pay them for filling prescriptions.