Using technology in a new way to market drugs, CVS Corp. and Giant Food Inc. are sending confidential prescription information to a Massachusetts company that tracks customers who don’t refill prescriptions, a practice that some experts say raises new questions about medical privacy.

The company, a computer database marketing specialist, uses the data to send personalized letters — written on pharmacy letterhead and sometimes paid for by drug manufacturers — that either remind customers to keep taking their medicine or pitch new products that will treat the customer’s ailment.

"Our records indicate that you have tried to stop smoking using a prescription nicotine replacement product," said one such letter, recently received by a customer, touting a new drug called ZYBAN. "We hope you successfully quit smoking but if you, like many others who have tried to quit, are still smoking, we have good news for you."

The letter was signed, "Your CVS Pharmacists." In fine print, the letter noted that its mailing was "supported" by Glaxo Wellcome Inc., the maker of ZYBAN. It also said that "no information about you or your prescription has been provided to Glaxo Wellcome."

The chains’ stores are among thousands of local pharmacies across the nation that electronically provide names, medication and other personal information to Elensys Inc., a Woburn, Mass., company. Elensys both manages the pharmacies’ data and arranges for drug manufacturers to pay pharmacies for the right to send "educational material" to customers with particular ailments and conditions.

Giant and CVS officials said their efforts will help customers stay healthy. But regulators and privacy specialists said the initiatives raise questions about patient confidentiality and blur the line between medicine and marketing.

"It’s a gross invasion," said George D. Lundberg, a physician and editor of the Journal of the American Medical Association, who called the practice a "breach of fundamental medical ethical issues."

"Do you want… the great computer in the sky to have a computer list of every drug you take, from which can be deduced your likely diseases — and all without your permission?" Lundberg asked.

Pharmacy regulators in Virginia, Maryland and elsewhere say the practice also may violate confidentiality rules governing the release of medical information. Safeway Inc. officials backed away from plans to sign on with Elensys after Maryland authorities expressed such concerns several times last year. Last month, Virginia legislators introduced bills that would
expand prohibitions against the release of prescription data by pharmacists or pharmacy owners.

"The public needs to be very much aware. It’s something at the federal level our government needs to address very quickly," said Franklin Z. Wickham, president of the National Association of Boards of Pharmacy, a group of state regulatory agencies. "There’s a real potential for abuse."

Giant and CVS officials defended their programs, saying customers benefit 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. The ZYBAN letter, for instance, included an attachment that the customer could fill out and send back to CVS, stating, "I do not wish to receive any prescription-related mailings from CVS/pharmacy."

"We are very aware of the confidentiality issue," said CVS spokesman Frederick McGrail, adding that the company does not give Elensys everything in its files about customers. "It’s important to us the confidentiality of that information, and the integrity of the patient’s information, is maintained. And it is in this case."

Russell Fair, Giant’s vice president of pharmacy operations, said his company will make more money and its customers will be healthier under the program. "It’s a real win-win situation," Fair said.

Elensys’s president, Daniel E. Rubin, said drug companies never get access to the pharmacy’s files. When a pharmaceutical company wants to contact people with particular ailments, it pays the pharmacy and Elensys to mail
out its materials. He said Elensys is not violating state confidentiality prohibitions because it acts as an agent — not an outside party — for the pharmacies that send it information.

"We basically process their data," Rubin said. "It’s basically still within the chain, in fact, because we’re an agent for the chain."

The efforts underway at CVS, the area’s largest drugstore chain, and Giant, which is the largest grocery retailer in the area and is opening free-standing drugstores, are called "drug compliance programs."

They are part of a far-reaching move by drug manufacturers and pharmacies across the country to make greater use of medical information, new technology and sophisticated marketing techniques to sell more drugs. Rather than promoting their wares mainly to doctors, the companies are increasingly going directly to patients, hoping they will ask their doctors to prescribe a specific medication.

One technique now used by drug advertisers and manufacturers is to automatically capture and store personal data about the people who call toll-free phone numbers seeking information about such medications as Claritin, an antihistamine, and Valtrek, a herpes treatment. These initiatives got a boost last August when the Food and Drug Administration loosened some restrictions on the television advertising of drugs if drug companies included a toll-free number that customers can call for more information.

Meanwhile, RxRemedy magazine has created a database of health information with about 2.2 million subscribers, 55 and older, who responded to offers to receive the publication free in exchange for filling out a medical survey. That database is used by pharmaceutical companies and others to analyze drug-taking behavior and market new products directly to consumers.

Pharmaceutical manufacturers sold about $ 80 billion in brand-name and generic prescription drugs last year, according to Pharmaceutical Research and Manufacturers of America, a trade organization.

Drug companies spent almost $ 875 million last year on television, newspaper and other consumer advertising, more than five times the $ 164 million they spent in 1993, according to Scott-Levin, a health care consulting company.

Rite Aid Corp., the second-biggest drugstore chain in the Washington area, has developed its own database operation that also uses computers to find customers who have not refilled prescriptions. After the company identifies particular customers, telephone operators call them at home to urge them to follow their doctor’s instructions, according to Suzanne Mead, a Rite Aid spokeswoman.

All these efforts are driven by innovations in computers and other technology that allow analysts to draw finer distinctions from vast repositories of medical and prescription information than ever before, according to Lynn O’Connor Vos, chief executive for Grey Healthcare Group, a marketing company.

A key aim is to directly contact customers with specific ailments, and then to persuade them to ask their doctors to prescribe certain drugs, Vos said.

"You’ve got to reach your customers psychologically and emotionally," Vos said. "There’s going to be an explosion of opportunity in the pharmaceutical industry for database marketing."

Vos and others marketing specialists cite Elensys, whose name is a variation on the name of an ancient Greek city known for medicine and health, as a leader of the trend. The company started operations with a handful of people almost five years ago. In 1995, it began analyzing prescription data from fewer than 500 pharmacies and, under the auspices of local stores, started mailing letters to several thousand customers.

Today, Elensys receives prescription information from 15,000 pharmacies about millions of people every week, and it uses some of the most sophisticated computer equipment available to keep track of the records, according to Elensys’s Rubin. In a posting on the Internet, Elensys describes itself as "the leader in patient behavior modification programs."

Interest in the company has soared, in part because so many people fail to take medicine properly and most chains don’t have the technical wherewithal to track customers as precisely as Elensys, Rubin said. Up to half of all patients who should routinely take medicine for such ailments as hypertension or high cholesterol quit prematurely, he said. "It’s the
primary reason for our existence."

Much of the cost of the analysis and mailings is offset by payments from drug manufacturers, who contract with pharmacies for the right to mail information to individual customers. Among other things, Rubin said, that material could include suggestions that customers switch from one drug to another.

CVS signed on with Elensys in September to track customers who take a heart medication called Posicore, and the company intends to expand mailings in the near future, McGrail said. Giant began sending the customer data late last year and recently used Elensys to identify customers with hay fever for a marketing campaign, Fair said.

Some state officials are questioning the arrangements, however. After Safeway expressed interest in signing on with Elensys last year, the Maryland Board of Pharmacy questioned whether the program would violate regulations protecting patient confidentiality, according to several board letters and the minutes of meetings.

Maryland law generally prohibits release of medical records, including prescription information, without patient authorization. That means drugstores or chains that release information to a third party may be in violation of state regulations, according to David M. Russo, president of the board.

"That’s a breach of confidence, according to the state board," Russo said, adding that Giant and CVS have not approached the board for an opinion.

CVS’s McGrail said "the goal behind these [programs] is to improve care… It’s not as though we’re turning over the entire file to Elensys."

Giant’s Fair stressed that Elensys does not share its prescription database with third parties. "They don’t have secondary interests," Fair said.

A Safeway spokesman said it backed away from Elensys after the pharmacy board raised concerns. "The reason we’re not going forward at this time is our concern with patient confidentiality," said Gregory TenEyck, a Safeway spokesman. "The relationship is between Safeway and the customer. Anyone entering into that is a concern to Safeway."

In Virginia, pharmacy regulators were not aware of the drug compliance programs at CVS and Giant. But soon after The Washington Post asked questions about Elensys, the Board of Pharmacy began exploring whether those programs violated any state regulations, according to executive director Elizabeth Scott Russell.

"We are looking into whether there is activity in violation of our confidentiality rules," she said.

Russell said she wanted to see whether customers had signed explicit waivers before their prescription and personal information was sent to Elensys. With few exceptions "it would be a violation of a Board of Pharmacy rule for a pharmacy to disclose any medical information," Russell said.

Virginia Sen. Joseph Gartlan Jr., who has introduced legislation that would strengthen rules prohibiting pharmacists from releasing prescription data, said he acted after his pharmacist discovered that patient information had made its way to drug companies through other means. "What’s at stake is my privacy and, in the extreme case, my health," Gartlan said.

Medical ethics specialists also questioned the propriety of drug compliance programs. Robert Veatch, a professor of medical ethics at the Kennedy Institute of Ethics at Georgetown University, said such efforts could have a very positive effect by encouraging patients to take their medicine. But he worries that they also diminish the barrier between medicine and marketing.

"The essence of the problem is you have an entrepreneurial ethic, where the goal is to sell the product, in direct conflict with the more traditional medical ethic, where the goal is the well-being of the patient," Veatch said. "It seems to me that conflict is so basic it’s probably indefensible."

But Rubin said his company’s services maintains that line, while giving drug companies and local pharmacies an opportunity to make more money.

"This is good medical and good entrepreneurial" practice, Rubin said, "which is the nice thing about it."