EXHIBIT 10.10
POINT OF CARE DATA SERVICES AGREEMENT
BETWEEN
MERCK & CO., INC.
AND
MEDCO HEALTH SOLUTIONS, INC.
POINT OF CARE DATA SERVICES AGREEMENT
THIS POINT OF CARE DATA SERVICES AGREEMENT (this "Agreement"), dated as
of June 28, 2002, is entered into between Merck & Co., Inc., a New Jersey
corporation ("Merck"), and Medco Health Solutions, Inc., a Delaware corporation
("Medco"). Merck and Medco are each referred to individually as a "Party," and
collectively as the "Parties".
RECITALS
A. Medco has partnered with a variety of third party technology vendors
to develop certain point-of-care ("POC") technologies and initiatives that allow
physicians to write prescriptions, receive formulary and prescription
information and communicate electronically with Medco through the use of
computers and wireless hand-held devices (the "POC Channels").
B. Medco also provides to Merck periodic summary reports concerning the
use of the POC Channels, which Merck uses to better understand POC distribution
and capabilities, and for general marketing purposes.
C. The Parties desire to continue to exchange information and expand
the exchange of information under the terms and conditions of this Agreement.
Accordingly, the Parties agree as follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement, the following capitalized terms
shall have the following meanings:
1.1 Capture Rate. "Capture Rate" shall mean the percentage of
Participating Physician prescriptions captured on the POC Channel. Capture Rate
shall be equal to the number of Medco prescriptions written annually by
Participating Physicians through the POC Channels divided by the total number of
Medco prescriptions written annually by Participating Physicians
1.2 Confidential Disclosure Agreement. "Confidential Disclosure
Agreement" shall mean that certain Confidential Disclosure Agreement to be
entered into between the Parties.
1.3 Effective Date. "Effective Date" shall mean the date that this
Agreement is executed by the Parties.
1.4 Final Separation. "Final Separation" means the date as of which
Merck divests itself of its equity interest in Medco, currently expected to be
by means of a distribution of Medco shares to Merck shareholders.
1.5 Indemnification Agreement. "Indemnification Agreement" shall mean
that certain Indemnification and Insurance Matters Agreement to be entered into
between the Parties.
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1.6 Intellectual Property. "Intellectual Property" shall mean (a) all
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereon, and all patents, patent applications and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (b) all
trademarks, service marks, trade dress, logos, trade names, domain names, and
corporate names, together with all translations, adaptations, derivations and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith, (c) all
copyrights and all applications, registrations and renewals in connection
therewith, (d) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, methods, schematics,
technology, technical data, designs, drawings, flowcharts, block diagrams,
specifications, customer and supplier lists, pricing and cost information and
business and marketing plans and proposals), (e) all computer software
(including data and related documentation), (f) all other proprietary rights,
(g) all copies and tangible embodiments of the foregoing categories of
intellectual property listed in subsections (a) through (f) (in whatever form or
medium), and (h) all licenses, sublicenses, agreements, or permissions related
to the foregoing categories of intellectual property listed in subsections (a)
through (g).
1.7 Participating Merck Identified Physicians. "Participating Merck
Identified Physicians" shall mean the particular physicians who are
Participating Physicians in Medco's POC initiative and who Merck from time to
time notifies Medco, in accordance with the specifications listed in Schedule
1.7, are recipients of Merck's marketing or market research activity.
1.8 Participating Physicians. "Participating Physicians" shall mean
those physicians who subscribe to the POC Channels and who use such POC Channels
to support and enable prescription writing and who use the POC Channels to write
prescriptions at least twice a month.
1.9 Person. "Person" shall mean any individual, corporation,
association, partnership (general or limited), joint venture, trust, estate,
limited liability company, or other legal entity or organization.
1.10 POC Channels. "POC Channels" shall have the meaning specified in
Recital A.
1.11 POC Deliverables. "POC Deliverables" shall mean the deliverables
to be provided to Merck under Section 2.3 of this Agreement and the applicable
Schedules.
1.12 Subsidiary. "Subsidiary" of either Party shall mean a corporation
or other organization whether incorporated or unincorporated, of which at least
a majority of the securities or interests having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Party or by
any one or more of its Subsidiaries, or by such Party and one or more of its
Subsidiaries. For purposes of this Agreement, neither Medco nor any of its
Subsidiaries shall be deemed to be a Subsidiary of Merck.
1.13 Term. "Term" shall have the meaning set forth in Section 5.1 of
this Agreement.
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1.14 Termination Date. "Termination Date" shall mean the date that the
Agreement is terminated pursuant to Article V.
ARTICLE II
DELIVERABLES TO BE PROVIDED
2.1 Merck Input Regarding POC Channel Content and POC Deliverables.
Merck shall have the right, at least once in each calendar quarter, to
participate with Medco in a joint POC planning meeting and to provide input on
the design, recommended clinical content and information tracked for the POC
Channels. The inclusion or use in the POC Channels of the material provided by
Merck shall be at the discretion of Medco. Merck shall have the right, within
reason, to request additional types of information be gathered from the POC
Channels and analyses be performed on data collected from or on the POC
Channels. Medco shall use its best efforts to accommodate Merck's suggestions
regarding these additional data and analyses, assuming they are not prohibited
by law, regulation, or third-party contractual limitation, and that they are not
operationally or methodologically impracticable. In the event that Medco
declines to follow such suggestions, Medco shall provide Merck with a good faith
reason for its decision.
2.2 Control Over Content. Medco and/or the third party technology
vendors shall have final control over the content of the POC Channels. Medco
shall keep Merck apprised of all POC functionality that Medco technology
partners have developed and deployed.
2.3 POC Deliverables. Medco shall provide to Merck the reports and
services listed in Schedule 2.3 concerning the POC Channels.
2.4 Clarifying and Backup Data. Upon reasonable request by Merck,
Medco will use its best efforts to provide clarifications to and explanatory
data for the reports and statistics specified in Schedule Section 2.3, subject
to Medco's duty to safeguard patient information under Article IX of this
Agreement.
ARTICLE III
COMPENSATION
3.1 Fees for POC Deliverables. During the Term, Merck shall pay Medco
fees on a semi-annual basis, in arrears, calculated in accordance with Schedule
3.1.
3.2 Invoices. Medco shall provide Merck with semi-annual invoices, on
June 1 and December 1, reflecting the estimated fees payable for the semi-annual
period ending June 30 or December 31, as determined in accordance with Schedule
3.1. Actual fees payable shall be calculated promptly after the end of each
calendar year, and a final invoice for the year, reflecting a true-up of any
adjustments from the estimated fees previously billed, will be provided by Medco
to Merck by March 1.
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ARTICLE IV
GENERAL OBLIGATIONS
4.1 Performance Parameters. To the extent that performance parameters
or specifications are established in this Agreement, Medco shall perform its
obligations in accordance with those parameters and specifications. To the
extent that specific performance parameters are not specifically enumerated in
this Agreement, Medco shall use reasonable commercial efforts to provide the POC
Deliverables.
ARTICLE V
TERM AND TERMINATION
5.1 Term. The Term of this Agreement shall commence on the Effective
Date and continue through and including December 31, 2005.
5.2 Termination in Full. Merck may terminate this Agreement, for any
reason or no reason, effective January 1, 2003 or at any later date upon 90 days
prior written notice to Medco. In the event such termination occurs mid-year,
Medco shall furnish a final invoice to Merck within 60 days following the
effective date of termination. The final invoice shall be calculated in
accordance with Schedule 3.1, including a true-up against prior estimated
payments, except that the actual performance data shall be calculated as of the
effective date of termination, and the fees payable shall be pro rated for the
number of months from January 1 of the year of termination to the effective date
of termination.
5.3 Termination in Part. Merck may also terminate this Agreement in
part, by eliminating its request for one or more of the POC Deliverables, for
any reason or no reason, effective January 1, 2003 or at any later time upon 90
days prior written notice to Medco. In the event that Merck terminates this
Agreement in part, both the base fee and the performance fee shall be reduced
proportionately by the proportionate value of the terminated POC Deliverable to
the fees for all the POC Deliverables, and the parties shall promptly seek to
agree upon that proportionate reduction.
5.4 Effect of Termination. Termination of this Agreement shall relieve
and release the Parties from any further liabilities and obligations hereunder
with respect to the services terminated except any liabilities or obligations
that accrued prior to the effective date of such termination and except as
provided in Section 5.5.
5.5 Survival. Articles VI, VIII and XI shall survive termination of
this Agreement.
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ARTICLE VI
CONFIDENTIALITY
6.1 The terms of the Confidential Disclosure Agreement shall apply to
any Confidential Information (as defined in Section 6.2) of either Party
provided to the other Party for the purpose of providing Services under this
Agreement.
6.2 Confidential Information shall have the meaning set forth in
Section 1.2 of the Confidential Disclosure Agreement; without limiting that
definition, Confidential Information shall also specifically include: (a)
Merck's list of identified physicians, (b) information indicating the success in
reaching Merck Identified Physicians; (c) any information revealing what data
Merck sought to include in or obtain from the POC Channels; and (d) the data and
reports exchanged by the Parties under this Agreement.
6.3 In addition to those obligations imposed by the Confidential
Disclosure Agreement, Confidential Information shall only be used by the Party
receiving it for the limited purposes under this Agreement for which that
Confidential Information is provided, and for no other purpose. Notwithstanding
this restriction, Merck may use the reports provided to it under this Agreement:
(a) internally, to better understand POC distribution and
capabilities, and for general marketing purposes, and
(b) may share those reports (other than the particular items of
data noted as exceptions on Schedule 2.3.2) externally with
(i) its consultants, advisors, marketing partners, and
co-promotion partners,
(ii) joint ventures in which Merck is a partner, and
(iii) vendors
other than any pharmacy benefit manager, any health care plan
that functions as a pharmacy benefit manager, or any entity
the offers hardware, software or content to physicians in the
POC market, in order to assist Merck in effectuating the
marketing purposes for which this information is obtained, and
subject to obtaining a commitment from any entity with whom
the information is shared that it will likewise hold the
information in confidence and not use it for any other
purpose.
(c) With respect to the particular items of data noted as
exceptions on Schedule 2.3.2, Merck may verbally convey to the
entities permitted to receive information under subsection (b)
above Merck's summary conclusions drawn from the information
contained in the reports provided by Medco, but may not convey
the detailed content of the reports.
(d) Neither the reports themselves nor Merck's conclusions from
the content of those reports may be shared with any pharmacy
benefit manager, any
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health care plan that functions as a pharmacy benefit manager,
or any entity that offers hardware, software or content to
physicians in the POC market.
ARTICLE VII
RELATIONSHIP BETWEEN THE PARTIES
7.1 The relationship between the Parties established under this
Agreement is that of independent contractors and neither Party is an employee,
agent, partner, or joint venture of or with the other.
ARTICLE VIII
INTELLECTUAL PROPERTY
8.1 Merck shall retain all right, title and interest in the materials
that it provides to Medco for use in, on, or in connection with the POC
Channels. However, Merck grants to Medco a perpetual, non-exclusive and
non-royalty-bearing license to use those suggestions and materials in the design
and content of the POC Channels, subject to Article VI.
8.2 Medco shall retain all right, title and interest in the compilation
of data and reports to be provided to Merck under this Agreement, and in the
data, analyses, and methodologies used to produce the POC Deliverables. However,
Medco grants to Merck a perpetual, non-exclusive and non-royalty bearing license
to use those data, reports, and analyses, subject to Article VI of this
Agreement.
8.3 As between the Parties, Medco shall retain all right, title and
interest in the content of the POC Channels, except to the extent that Merck
provides such content to Medco.
ARTICLE IX
PATIENT PRIVACY
9.1 Medco represents and warrants that it will perform all of its
duties under this Agreement in compliance with all applicable federal, state,
local and foreign laws and regulations and licensing requirements, including but
not limited to those related to patient notification, authorization and consent,
privacy of medical records and medical information. By way of example, Medco is
required under the Standards adopted pursuant to the Health Insurance
Portability and Accountability Act of 1996, either directly as a covered entity
or in its role as a business associate of its health plan clients, to assure
that protected health information (all as defined in such Standards) is used or
disclosed only in accordance with such Standards.
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ARTICLE X
REPRESENTATIONS AND WARRANTIES
10.1 Intellectual Property. Medco represents and warrants that it has
the right to use the POC Channels and to provide the POC Deliverables. Medco's
use of the POC Channels and provision of the POC Deliverables shall not infringe
the Intellectual Property rights of any third party.
10.2 If at any time during the Term of this Agreement, Medco concludes
that it cannot perform one or more obligations under this Agreement because of
legal or regulatory restrictions imposed upon it, Medco shall promptly notify
Merck, explain why it believes it cannot legally perform the obligation, and
provide Merck with an estimate of the impact of the restriction on its
performance of this Agreement as a whole. Nothing in this Agreement is intended
to allow Medco to create by contract an impediment to performance of this
Agreement that differs from any restriction to which Medco is subject as to
either drug manufacturers generally or any broader category of third-parties.
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification. Medco shall indemnify and hold harmless the Merck
Indemnitees (as defined in the Indemnification Agreement) in respect of all
Liabilities (as defined in the Indemnification Agreement) related to, arising
from, asserted against or associated with Medco's providing services hereunder.
Such indemnification obligation shall be a Medco Liability for purposes of the
Indemnification Agreement, and the provisions of Article I thereof with respect
to indemnification shall govern with respect thereto.
11.2 Additional Indemnification. In addition to, and not in limitation
of, the indemnification provided under Section 11.1, Medco shall indemnify and
hold harmless the Merck Indemnitees from and against any and all loss, damage or
expense, including reasonable attorneys' fees, that Merck may sustain or incur
as a result of any claim, suit or proceeding arising out of or in connection
with: (1) any actual or alleged negligent or willful act or omission of Medco,
or any of its employees, agents or subcontractors; (2) any actual or alleged
violation by Medco, or any of its employees, agents or subcontractors of any
law, statute, ordinance or regulation; (3) any failure to obtain necessary
consents, authorizations, approvals or releases for use of the POC Deliverables
hereunder and any violation or alleged violation of any third party or
individual's privacy right by the POC Deliverables provided to Merck under this
Agreement; (4) any infringement or alleged infringement by the POC Deliverables
provided to Merck under this Agreement upon any Intellectual Property rights of
any third party; or (5) any failure to perform any obligation under this
Agreement. Such indemnification obligation shall be a Medco Liability for
purposes of the Indemnification Agreement, and the provisions of Article I
thereof with respect to indemnification shall govern with respect thereto.
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ARTICLE XII
DISPUTE RESOLUTION
12.1 Any dispute, controversy or claim arising between the Parties
relating to the validity, interpretation or performance of this Agreement shall
be resolved in accordance with the provisions of Article III of the
Indemnification Agreement.
12.2 Injunctive Relief. Notwithstanding the provisions of Section 12.1,
Medco acknowledges that any violation of Article(s) VI and/or VIII of this
Agreement will cause Merck immediate and irreparable harm that monetary damages
cannot adequately remedy. The parties agree that, upon any actual or impending
violation of Article(s) VI and/or VIII of this Agreement, in addition to any
money damages or other legal remedy that Merck may have, Merck shall also be
entitled to equitable relief, including injunctive relief and specific
performance (and Medco shall not plead in defense thereto that there would be an
adequate remedy at law), without bond or proof of damages. Such equitable relief
may be sought in an arbitration proceeding pursuant to Section 3.1(c) of the
Indemnification Agreement (without first complying with the negotiation
provisions of Section 3.1(a) thereof) or in a court, subject to Section 13.2. In
the event of litigation relating to this Agreement, if a court of competent
jurisdiction determines that Medco has breached Article(s) VI and/or VIII of
this Agreement, Medco shall be liable and pay to Merck the reasonable legal fees
and costs incurred in connection with such litigation, including any appeal from
such litigation.
ARTICLE XIII
MISCELLANEOUS
13.1 Entire Agreement. This Agreement, the schedules, and any other
agreements specifically referred to in this Agreement constitute the entire
agreement between the Parties with respect to the subject matter of this
Agreement and shall supersede all prior or contemporaneous written or oral
agreements or understandings with respect to the same subject matter.
13.2 Governing Law; Forum. This Agreement shall be construed in
accordance with, and all Disputes hereunder shall be governed by, the procedural
(except to the extent inconsistent with the procedures set forth in Article III
of the Indemnification Agreement) and substantive laws of the State of New York
as to all matters regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable thereto. Under no circumstances may
any party seek or be awarded punitive damages under this Agreement. Any state
court sitting in New York county, New York and/or the United States District
Court for the Southern District of New York shall have exclusive jurisdiction
and venue, and each party hereto hereby submits to such jurisdiction and venue
and irrevocably waives, to the fullest extent permitted by applicable law, any
objection it may now or hereafter have to such jurisdiction or the laying of
such venue over any Disputes between the parties that are permitted to be
brought in a court, or the enforcement of any decision of an arbitrator,
pursuant to Article III of the Indemnification Agreement. Each of the parties
hereby irrevocably waives any right to a jury trial with respect to a Dispute.
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13.3 Descriptive Headings. The headings contained in this Agreement,
including its Schedules and table of contents, are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
Any capitalized term used in any Schedule but not otherwise defined therein,
shall have the meaning assigned to such term in this Agreement. When a reference
is made in this Agreement to an Article or a Section, such reference shall be to
an Article or Section of this Agreement unless otherwise indicated.
13.4 Notices. All notices and other communications required or
permitted to be given by either Party pursuant to the terms of this Agreement
shall be in writing to and shall be deemed to have been duly given when
delivered in person, by express or overnight mail delivery by a nationally
recognized courier (delivery charges prepaid), or by registered or certified
mail (postage prepaid, return receipt requested), as follows:
if to Merck:
Merck & Co., Inc.
000 X. Xxxxxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000-0000
Attention: Miekeleen Xxxxxx,
Vice President, Sales Strategic Planning
with a copy to:
Merck & Co., Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
if to Medco:
Medco Health Solutions, Inc.
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
or to such other address as the Party to whom notice is given may have
previously furnished to the other in writing in the manner set forth above. All
notices and other communication shall be deemed to have been given and received
on the date of actual delivery.
13.5 Binding Effect; Assignment; Third-Party Beneficiaries. Medco may
not, directly or indirectly, in whole or in part, whether by operation of law or
otherwise, assign or transfer this Agreement or its rights or obligations
hereunder, without Merck's prior written consent and, except as otherwise
permitted hereby, any attempted assignment, transfer or delegation without such
prior written consent shall be voidable at the sole option of Merck. Merck may
not, without Medco's prior written consent, assign or transfer this Agreement
other than to an Affiliate or in connection with a merger, consolidation, sale
or transfer of all or substantially all of its pharmaceutical business or assets
or any similar business combination transaction. Without limiting the foregoing,
this Agreement shall be binding upon Merck and the other members of
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the Merck Group (as defined in the Separation Agreement (as defined in the
Indemnification Agreement)), and Medco and the other members of the Medco Group
(as defined in the Indemnification Agreement), and their respective legal
representatives, successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
13.6 Offset. In addition to, and not in limitation of, any other
remedies any member of the Merck Group or any Merck Indemnitee (as defined in
the Indemnification Agreement) may be entitled to under the Separation Agreement
any Ancillary Agreement (as defined in the Separation Agreement) (including this
Agreement) or any Intercompany Agreement (as defined in the Indemnification
Agreement) , any member of the Merck Group or any Merck Indemnitee may satisfy
any amounts owed to such member of the Merck Group or Merck Indemnitee by any
member of the Medco Group by means of an offset against any amounts any member
of the Merck Group may from time to time owe to any member of the Medco Group or
an Medco Indemnitee, whether under the Separation Agreement, any Ancillary
Agreement (including this Agreement), any Intercompany Agreement, any other
agreement or arrangement existing between any member of the Merck Group and any
member of the Medco Group, or otherwise.
13.7 Severability. If any term or other provision of this Agreement is
determined by a court, administrative agency or arbitrator, by any court or in
any binding arbitration, to be invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions of this
Agreement will nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the fullest extent possible. If the Parties are unable to reach an agreement
on any such modification, the arbitrator selected in accordance with Article III
of the Indemnification Agreement shall have the authority to determine such
modification.
13.8 Failure or Indulgence not Waiver; Remedies Cumulative. No failure
or delay on the part of either Party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude the further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
13.9 Amendment. No change or amendment will be made to this Agreement
except by an instrument in writing signed on behalf of each of the Parties
hereto.
13.10 Counterparts. This Agreement may be executed in counterparts,
which, taken together, shall be considered to be one and the same instrument.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed in duplicate originals by its duly authorized representatives.
MERCK & CO., INC. MEDCO HEALTH SOLUTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: President Title: Executive Vice President
USHH - The Americas Operations and Technology
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