Merck
Pays $400 Million In National Medicaid Fraud Settlement;
New Investigation
Model Ends Seven-Year Qui Tam Whistleblower Case

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Consultant Meetings

Mr. Steinke was personally aware of Merck's marketing scheme known as
"Consultant Meetings." These were a form of Merck's kickbacks to
high-prescribing physicians, as alleged in this case. The pretext of these
meetings was that physicians would "train" Merck sales representatives
and, at the same time, provide marketing information to Merck.

One such consultant meeting was held over a September 1998 weekend at
the luxurious Crystal Mountain Resort in Thompsonville, Michigan. During
this event each selected physician was asked to serve as a Merck
representative training consultant and evaluate the sales message of Merck
sales reps. In return, Merck paid each physician a $500 honorarium for the
training and consultative services, Friday and Saturday nights' lodging
expenses, and an additional $100 for incidental expenses.

Physicians invited by Merck had been ranked by Merck as "A" or "A+"
doctors based upon the volume of statin and hypertensive drugs they
prescribed. Furthermore, Merck reps were the hand-picked top salespersons
known as Merck's "Zocor Hit Squad." Two additional meetings were held at
Crystal Mountain in September 1999.

The Ritz Carlton in Dearborn, Michigan was the site of a similar Merck
consultant meeting at the end of October 1998. Attending physicians were
paid $500 honoraria plus $100 in incidentals. This consultant meeting was
another all-expense-paid weekend. Although the meeting's stated purpose
was market research, no marketing data was collected. A third such
meeting, called a "Customer Focus Group Meeting" was held at the Dearborn
Ritz Carlton in February 1999, which at least 47 physicians attended. Once
again, no market data was recorded, analyzed, or kept.

In March 2000, another purported customer focus group meeting was held
at the Amelia Island Plantation. Like the first Crystal Mountain meeting
(above), top Merck sales reps were brought to Florida to party with
high-prescribing doctors, all under the guise of training. Merck paid
honoraria to the physicians participating in the training consultant
meeting, and additional honoraria for also participating in a so-called
customer focus group.

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