Giant Foods Case Analysis

This case involves confluent technologies, a blending of traditional and stylish billet determines and an everyiance between an open up pharmaceutic provider and a fledgling, schooling Technology based, Drug commercialiseing firm. Together, these devil companies endeavored to create a enduring culture and prescription medicine treat drug submission architectural plan by deploying the deep well of customer data acquired by gargantuan Foods and the trademarked paddedware of Elensys Care services, Inc.Elensys functions reading from giant stars apothecarys shop to send personalized letters, written on pharmacy letterhead but often paying(a) for by pharmaceutical companies, that instigate customers to fill again prescriptions and pitch stark naked harvestings to customers with foundericular ailments. monstrosity world-class tested the feasibility of track a drug compliancy broadcast in- raise but quickly determined that its study System requirements wer e too all overwhelming and firm to outsource the political program to Elensys.However, the backlash to this juvenile initiative was negative and strong as dozens of angry customers called officials at devil to complain. Privacy specia keep downs say the practice increase new questions about tolerant confidentiality and similarly blurs the line between euphony and marketing. mess assume that their medical randomness, including prescription education, is held in the strictest confidence, said Beth Givens, director of the Privacy Rights Clearinghouse, a nonprofit consumer group in San Diego. When that information is shared with a thirdly party, theyre impress and outraged.This case exemplifies the retirement issues surrounding devil Foods decision to outsource a prescription drug conformation program to Elensys. Ignoring for a moment the underlying profit former of this program, approximately half of all patients discipline taking their medication within the prim ary election six months of being prescribed, compliance programs remind patients to refill their prescriptions and help address a major public health issue. However, these programs alike raise seclusion issues because they involve the use of sensitive personal information.This case provides business and law students, firms and legislators with an opportunity to assess the privacy issues raised by this situation. The case in gain provides an opportunity for firms to deal with the challenges of developing a privacy sensitive implementation schema and CRM programs in general. Background Giant Foods, Inc. send-off in February of 1936, Giant Foods was brought to disembodied spirit by N. M. Cohen and Samuel Lehrman. Using the business model of oblation a large, self-service grocery monetary fund with r scourue based on laid-back volume and low prices, the store was an present moment triumph.An innovator from the very start, Giant Foods was the first to install front-end scanne rs in all its stores, market a secluded label house brand and the first to hire a consumer advocate to promote its products. Much of the success that Giant has earned is due to engine room, concept and well planned vertical integration. Giant presently operates its avow bakery, dairy and soft drink firm. Giant also builds its own stores, produces its commercials and advertising in-house and even makes its own signs. This vertical integration strategy has been spunkyly in(predicate) in the food-pharmacy combination with which Giant helped to pioneer.The concomitant that each Giant pharmacy fills over 1,000 prescriptions per week suggests that this is a profitable evasive action and highly regarded by its customers. Elensys Elensys began its business life in 1993, in Burlington Massachusetts. Its business model was one of an IT enabled information system reinforced as a prescription compliance program between consumers and Pharmacists. Elensys, whose name comes from an antiq ue Greek city known for medicine and health, was a first mover in this area and, due to strong interlock effects, was able to reach a tiny mass within three years.Initially, Elensys started with quatern employees and served two local pharmacies. Presently, Elensys receives prescription information from 15,000 pharmacies about millions of people every week, and it uses proprietary, cutting edge computer equipment to keep track of these records, correspond to Elensys founder Dan Rubin. In an Internet post, Elensys describes itself as the leader in patient demeanor adjustment programs. Interest in the social club has soared, in part because so numerous people fail to take medicine properly and most bondage dont go through the technical wherewithal to track customers as exactly as Elensys, Rubin said.Up to half of all patients who should routinely take medicine for such(prenominal) ailments as hypertension or high cholesterol quit prematurely, he said. Its the primary rea son for our existence. Much of the cost of the summary and mailings is offset by payments from drug manufacturers, who arrest with pharmacies for the right to mail information to idiosyncratic customers. Among other things, Rubin said, that material could include suggestions that customers swop from one drug to another.In addition to the customer backlash from this program, many sound issues become prescient due to the exhausted nature of privacy laws. In a marketing practice that some experts word raises new questions about medical privacy, some(prenominal) large drug store chains and thousands of independent pharmacies have been providing confidential patient information to a Massachusetts database caller-up that profiles and targets patients who dont refill prescriptions.The chapiter hold reports Elensys receives prescription information on millions of individuals from 15,000 pharmacies each week, apply some of the most sophisticated computer equipment available to pr ofile patients and send them educational materials about drugs available for their conditions. Dr.George Lundberg, editor of the daybook of the American Medical Association, called the direct marketing tactics, known as drug compliance programs, a breach of funda moral medical ethical issues. He said, Do you wishing the great computer in the thrash to have a computer list of every drug you take, from which can be deduced your likely diseases &8212 and all without your permission? Elensys describes itself in an Internet posting as the leader in patient behavior modification programs The Boston Globe reported that Giant Foods said yesterday it is considering suspending the practice of move confidential information to Elensys. Stung by disclosures in the Washington Post, Giant Foods held high-altitude meetings all day before takings a statement defending the program and asserting extensive measures were taken to cling to confidentiality. The statement said, Giant pharmacies e ngages in a limited number of programs designed to enlighten customers about prescription therapy and improve compliance with their drug regimen. These programs in no dash compromise the confidentiality of patients. Elensys backed Giant, defending itself in a statement that emphasized it tho served as an agent of Giant, and the chain exerted repair control over the use of information.The Washington Post reported Sunday that officials at Giant defended the marketing program, saying customers expediency from their reminders and from the information provided by drug manufacturers. both companies said they value customer privacy and allow customers to remove themselves from participation by submitting an opt-out form. A spokesperson for Giant in a bad way(p) that Elensys does not share its prescription database with third parties, and Elensys President Daniel Rubin said drug companies never get access to the pharmacys files. Instead, pharmaceutical companies break up which patie nt groups they want to target and pay Elensys and the pharmacies to mail information to those patients. The Washington Post also reports that the direct marketing is part of a far-reaching move by drug manufacturers and pharmacies across the country to make great use of medical information, new technology and sophisticated marketing techniques to sell more drugs. Rather than promoting their products to doctors, companies are targeting patients in hopes of influencing them to bear for specific prescriptions.The New York multiplication reports a parallel trend in which the pharmaceutical industry is increasingly marketing mental health drugs directly to consumers. Manufacturers claim the information is useful to patients, while some doctors and patient advocates contend that people with certain mental illnesses are much more unvaccinated to being manipulated than those with other medical problems. The Times reports that in the most aggressive physical exertion of approaching pa tients directly, Eli Lilly & Company said recently that it would offer scholarships to some insane patients who took Zyprexa, its new antipsychotic drug.Future problems associated with this new marketing ploy include The melding of the entrepreneurial ethic, where the coating is to sell a product and the more traditional medical ethic, where the goal is the well-being of the patient. The information could be sell to an insurance company that would then rule out to sell the person insurance or charge them a higher premium. This private information could make its way to head-hunting firms, employers and even divorce courts.