Genentech Inc. (NYSE:GNE) and PCS Health Systems Inc. haveagreed to develop a new computerized managed care distributionsystem for Genentech's two human growth hormone products,Protropin and Nutropin. While these arrangements are fairly commonfor pharmaceutical companies, their use in the biopharmaceutical arenais still new."PCS will contact its network of providers and develop financialarrangements to ensure cost-effective delivery of these growthhormone products to patients for whom they are medically necessary.PCS's state-of-the-art computer system will also provide a tightlycontrolled distribution system capable of tracking the use of thesedrugs through its networks," said Edmon Jennings, Genentech's vicepresident of sales and marketing.Scottsdale, Ariz.-based PCS, a subsidiary of McKesson Corp.(NYSE:MCK), manages some 200 million prescriptions valued atabout $6 billion, according to Genentech. A Genentech spokesman saidthe deal offers his company a new distribution channel to serve themanaged care industry in a very competitive market where themanaged care payer is looking for the best deals.PCS will develop a software program to track the products and makesure they reach authorized users. This would deter the use of thegrowth factor by athletes who believe it has body-building powers. -Philippa Maister

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