GIANT ENDS DRUG-MARKETING PROGRAM

CHAPIN CLARK

LANDOVER, Md. -- Following a customer backlash, Giant Food here has opted out of an agreement with a direct-marketing firm under which the retailer's pharmacies had shared prescription information.

The negative customer reaction was sparked by a Feb. 15 Washington Post story about the firm, Elensys, Woburn, Mass., and how it works with drug companies and retailers, specifically Giant Food and Woonsocket, R.I.-based CVS Pharmacies, to encourage prescription refills.

"Right after the Post story appeared Sunday, we started receiving calls. We met first thing Monday and immediately decided to cancel it," said Barry Scher, Giant's vice president of public affairs. "Customers clearly told us that they value their privacy."

Scher said he did not know how many calls were made but that it was an "above-normal" number.

Giant operates 138 food-drug combination stores as well as three freestanding drug stores in the District of Columbia, Maryland, Virginia, Delaware and Pennsylvania.

About 25 retail chains with pharmacies contract with Elensys to manage customer data and to send letters, printed on pharmacy stationery, directly to customers reminding them to refill their prescriptions. A letter might also suggest a customer switch to another drug that treats his or her condition.

Drug companies, which fund the mailings at least partially, use Elensys to better market to consumers with particular conditions.

Scher said Giant was paid for the customer data, which the retailer began releasing late last year, but he did not know how much or how the compensation was determined.

Scher also noted that, other than to doctors and insurance companies when necessary, this was the only case in which Giant pharmacies had released potentially sensitive customer information to a third party.

A prepared statement from Elensys read, in part, "As an agent of the pharmacy chain, Elensys has no ownership rights whatsoever to the prescription data which it processes and can do nothing without the chains' consent and direction."

Ensuring that patients continue taking their medication as prescribed -- "compliance," in pharmacy argot -- is a hot-button issue for managed-care organizations, which want to contain the costs of more expensive, hospitalization-requiring treatments, and retailers, who are looking to increase profits.

Indeed, relationships like that between Giant and Elensys are common. Third-party pharmaceutical marketers like Health Resource Publishing Co., St. Louis, and the Condor Corp., Pelham, Ala., to name just two, have worked for some time with such retailers as Kroger Co., Winn-Dixie, Pathmark, Schnuck Markets and Jitney-Jungle Stores of America.

As part of a damage-control effort, Giant employees telephoned customers to apologize, and the retailer took out advertisements in the Post and other newspapers explaining its decision.

In those ads, as in the original Post story, Giant insisted there was no real threat to customers' privacy because of confidentiality agreements it had with Elensys.

CVS also canceled its agreement with the company in response to complaints.