EXHIBIT 10.9
E-HEALTH SERVICES AGREEMENT
BETWEEN
MERCK & CO., INC.
AND
MEDCO HEALTH SOLUTIONS, INC.
E-HEALTH SERVICES AGREEMENT
THIS E-HEALTH 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 developed and currently operates through its web site at
xxx.xxxxxxxxxx.xxx certain Internet based, interactive web pages that provide
targeted health information to Medco and non-Medco members in four eHealth
Centers including Cardiovascular (Hypertension, High Cholesterol), Arthritis,
Women's Health (Osteoporosis) and Wellness (Vaccines) (the "eHealth Centers").
B. Through the eHealth Centers, Medco also tracks patient usage and
behavior, based in part on patient self-reporting, and provides to Merck
periodic reports containing aggregated information concerning patient
utilization and behavior modification.
C. The Parties desire to continue to exchange 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 Confidential Disclosure Agreement. "Confidential Disclosure Agreement"
shall mean the Confidential Disclosure Agreement to be entered into between the
Parties.
1.2 Current eHealth Centers. "Current eHealth Centers" shall have the
meaning set forth in Section 2.1.
1.3 Effective Date. "Effective Date" shall mean the date that this
Agreement is executed by the Parties.
1.4 eHealth Centers. "eHealth Centers" shall have the meaning set forth in
Recital A and shall include "Current eHealth Centers".
1.5 eHealth Data Services. "eHealth Data Services" shall mean the data
services provided by Medco to Merck in connection with the eHealth Centers as
set forth in Article II.
1.6 Indemnification Agreement. "Indemnification Agreement" shall mean that
certain Indemnification and Insurance Matters Agreement to be entered into
between the Parties.
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1.7 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).
1.8 Person. "Person" means any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
1.9 Registered Members. "Registered Members" shall mean individuals who
have registered on xxxxxxxxxx.xxx and are members of a Medco health plan.
1.10 Registered Non-Members. "Registered Non-Members" shall mean
individuals who have registered on xxxxxxxxxx.xxx but are not members of a Medco
health plan.
1.11 Subsidiary. "Subsidiary" of either Party means 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.
1.12 Term. The "Term" of this Agreement is set forth in Section 5.1.
1.13 Termination Date. "Termination Date" shall mean the date that the
Agreement is terminated pursuant to Article V.
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ARTICLE II
DATA AND SERVICES TO BE PROVIDED
2.1 Provision of eHealth Centers. Among the eHealth Centers that Medco
currently operates are a Women's Health (Osteoporosis) Center; an Arthritis
Center; a Cardiovascular Center (Hypertension and High Cholesterol); and a
Wellness (Vaccines) Center. During the Term of this Agreement, Medco shall
continue the operation of the Women's Health (Osteoporosis), Arthritis,
Cardiovascular (Hypertension and High Cholesterol), and Wellness (Vaccines)
eHealth Centers (the "Current eHealth Centers"), and ensure that each such
eHealth Center provides, at minimum, the functions set forth in Schedule 2.1.
2.2 New eHealth Centers. In the event that (a) Medco develops additional
eHealth Centers, Merck shall have the right of first refusal to invest in such a
center. The scope and terms of any such a project will be determined by Medco at
its sole discretion. Medco may make Merck aware of any such intentions to
develop a center at any point in time (through written communication); Merck
will respond to Medco in writing regarding an interest in investing within 30
calendar days or it will be assumed that no current interest exists and Medco's
obligations under Section 2.2 have been completed.
2.3 eHealth Data Services. Medco shall provide to Merck the reports listed
in Schedule 2.3 concerning the success of the eHealth Centers in attracting
Registered Members and influencing their behavior.
2.4 Medco Control Group Data. Medco shall, where feasible, report on the
impact of the eHealth Centers using well-matched statistically significant
control groups to compare the behavior of patients who use the eHealth Centers
against the behavior of similar patients who did not use the eHealth Centers.
2.5 Clarifying and Backup Data. Upon reasonable request by Merck, Medco
shall provide clarifications to and backup data for the reports and statistics
specified in Schedule 2.3, subject to Medco's duty to safeguard patient
information under Article IX of this Agreement.
2.6 Merck Input Regarding Content and Data Collection. Merck shall have
the right, at least once in each calendar quarter, to contribute approved
non-promotional educational materials (patient or physician focused) for
consideration for inclusion in the eHealth Centers. The inclusion or use in the
eHealth Centers 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 eHealth users and analyses be performed on data
collected from or on eHealth Center users. 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.
2.7 Control Over Content. Medco shall have final control over the content
of the eHealth Centers and all other health information presented on
xxxxxxxxxx.xxx.
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ARTICLE III
COMPENSATION
3.1 Fees for Services. During the Term of this Agreement, Merck shall pay
Medco fees as shown in Schedule 3.1.A, payable in equal installments on a
quarterly basis in advance.
3.2 Invoices. Medco shall provide Merck with a quarterly invoice
reflecting the fees payable for the upcoming quarter.
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
eHealth Data Services in the same manner, and with at least the same level of
diligence, as Medco has used in the provision of similar services to Merck in
the 12 months prior to the Effective Date.
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, 2004 except that with respect to
the Wellness (Vaccines) eHealth Center, the Term of this Agreement shall end on
December 31, 2002, and Merck shall have an annual right to renew, at its sole
option (exercised by November 1 of each year), this Agreement for additional one
year periods for the years 2003, 2004 and 2005.
5.2 Termination. Merck may terminate this Agreement for any reason or no
reason, effective January 1, 2003 or at any later date, upon at least 90 days
prior written notice to Medco. Effective January 1, 2003 or at any later date,
Merck may also terminate this Agreement in part, by eliminating its request for
eHealth Data Services with respect to one or more of the eHealth Centers, for
any reason or no reason, upon at least 90 days prior written notice to Medco. In
the event that Merck terminates this Agreement in part as to one or more of the
Women's Health (Osteoporosis) Center, the Arthritis Center or the Cardiovascular
Center (Hypertension and High Cholesterol), the fees payable under Schedule
3.1.A.1 shall be reduced by one third per year for each eHealth Center for which
services are terminated, and also reduced pro rata for the number of months left
in the year if the services are terminated mid-year. In the event that Merck
terminates this Agreement mid-year as to the Wellness (Vaccines) eHealth Center,
the fees payable under Schedule 3.1.A.2 shall be reduced pro rata for the number
of months left in the year.
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5.3 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 5.4.
5.4 Survival. Articles VI, VIII and XI shall survive termination of this
Agreement.
ARTICLE VI
CONFIDENTIALITY
6.1 The terms of the Confidential Disclosure Agreement shall apply to any
Confidential Information (as defined in Section 1.2 of that agreement) of either
Party provided to the other Party for the purpose of providing Services under
this Agreement.
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 venturer of or with the other.
ARTICLE VIII
INTELLECTUAL PROPERTY
8.1 Merck shall retain all right, title and interest in the materials and
methodologies that it provides to Medco for use in, on, or in connection with
the eHealth Centers. However, Merck grants to Medco a perpetual, non-exclusive
and non-royalty-bearing license to use those suggestions, materials and
methodologies in the design and content of the eHealth Centers, subject to
Section 6.1 of this Agreement.
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 Data Services. However, Medco grants
to Merck a perpetual, non-exclusive and non-royalty bearing license to use those
data, reports, and analyses, subject to Section 6.1 of this Agreement.
8.3 The Parties have the right to publish, either individually or jointly
with one another, the compilation of data and analyses to be provided to Merck
under this Agreement. If either Party intends to publish those data and
analyses, it shall give prior notice to the other Party of its intent to do so,
explaining how, when and where it intends to publish the information, and the
intended target audience. In the event of such publication, neither Party shall
have a duty to account to the other Party for the financial proceeds (if any)
resulting from the publication.
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8.4 As between the Parties, Medco shall retain all right, title and
interest in the content of the eHealth Centers, except to the extent that such
content is provided to Medco by Merck.
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.
9.2 Medco may collect and/or generate information that identifies or could
be used to identify an individual, including names, addresses, medical histories
and test results ("individually identifiable information") directly from
patients, consumers, prospective clinical trial subjects, and other individuals.
Medco agrees to handle individually identifiable information in compliance with
applicable law.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
10.1 Intellectual Property. Medco represents and warrants that it has the
right to operate the eHealth Centers and provide the eHealth Data Services, and
that operation of the eHealth Centers and provision of the eHealth Data Services
shall not infringe the Intellectual Property rights of any third party.
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. Merck shall indemnify and
hold harmless the Medco Indemnitees (as defined in the Indemnification
Agreement) in respect of all Liabilities (as defined in the Indemnification
Agreement) related to or arising from Merck's provision of content under Section
2.6 of this Agreement. Such indemnification obligation shall be a Merck
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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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 data and/or
provision of the services hereunder and any violation or alleged violation of
any third party or individual's privacy right by the data and/or services
provided to Merck under this Agreement; (4) any infringement or alleged
infringement by the eHealth Centers and/or eHealth Data Services 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.
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) II, 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) II, 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 14.2 of
this Agreement. In the event of litigation relating to this Agreement, if a
court of competent jurisdiction determines that Medco has breached Article(s)
II, 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.
12.3 Limitation on Damages. In the event of a breach of this Agreement,
the damages (if any) payable by either Party shall not exceed the total annual
payments due under the Agreement for its entire Term as set forth in Schedule
3.1.A.
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ARTICLE XIII
FORCE MAJEURE
13.1 Neither Party shall be deemed to have breached this Agreement or to
have failed or delayed in the performance of all or any portion of its
obligations under this Agreement if such Party is prevented from doing so by a
cause or causes beyond its control, provided that such Party is using reasonable
commercial efforts to remedy its non-performance or to arrange for appropriate
alternative methods of performance. Without limiting the generality of the
foregoing, such causes include acts of God or the public enemy, fires, floods,
storms, earthquakes, locusts, tornadoes ("twisters"), mudslides, riots,
terrorism, strikes, lock-outs, wars and war-operations, restraints of government
power or communication line failure or other circumstances beyond such Party's
control, or by reason of the judgment, ruling or order of any court or agency of
competent jurisdiction or change of law or regulation subsequent to the
execution of this Agreement. If either Party is affected by a force majeure
event, such party shall, within 10 days of its occurrence, give notice to the
other Party stating the nature of the event, its anticipated duration and any
action being taken to avoid or minimize its effect. The suspension of
performance shall be of no greater scope and no longer duration than is required
and the non-performing Party shall use its best efforts to remedy its inability
to perform.
13.2 If either Party's performance under this Agreement is suspended
pursuant to Section 13.1, the other Party's obligations (except for those
covered by Articles VI, VIII and XI) shall be suspended for the same period of
time. If Medco is unable substantially to perform its obligations under this
Agreement for more than 5 business days by reason of an act covered by Section
13.1, the fees payable by Merck shall be reduced pro rata for each additional
calendar day that Medco's non-performance continues. If Medco's suspension of
services continues for more than 30 days, Merck shall have the right to
terminate this Agreement on 7 days notice.
ARTICLE XIV
MISCELLANEOUS
14.1 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.
14.2 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
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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.
14.3 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.
14.4 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.
Xxxxxxxxxx Xxxx
X.X. Xxx 0
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxx,
Senior Director, PBM National Accounts
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.
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14.5 Nonassignability; 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 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 Separation
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.
14.6 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.
14.7 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.
14.8 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.
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14.9 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.
14.10 Counterparts. This Agreement may be executed in counterparts, which,
taken together, shall be considered to be one and the same instrument.
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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