Hamant to Asbury and Knoesel: an equitable punitive award from Medco

December 20, 2005

Dr. Asbury and Ms. Knoesel:

As Legislative Chair of Warren County RTA, I am writing to congratulate STRS on the recent Jury Award of $7.8 million in the Merck Medco case regarding misappropriation of drug rebates due to STRS. The legal team advised by Stanley Chesley has represented Ohio's educators well in this important case.

Warren County is very hopeful that further deliberation will provide ample "Punitive" damages to set an example for ALL PBMs in the nation. I believe early press releases about the case indicated that as much as $50 million in rebates were withheld by Merck Medco. Punitive damages should be at least $50 million to be equitable!

Dr. Asbury you have indicated in an email that the award settlements will be deposited in the Health Care Stabilization Fund. As you recall, Warren County has long advocated for that to happen.

Also, Warren County continues to support STRS to become its own PBM. Warren County feels that Caremark (formerly AdvancePCS) is likely following similar business practices as those of Merck Medco. It is difficult to have "faith" in the contractual negotiations/agreements of Caremark when over 20 states are in the process of suing Caremark (AdvancePCS).

Again, Warren County RTA is pleased with Merck Medco Jury Award and looks with anticipation to an equitable punitive award.

Nancy B. Hamant, Legislative Chair

Warren County RTA