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Agenda 02/28/2012 Item #11F2/28/2012 Item 11.F. EXECUTIVE SUMMARY Recommendation to approve an Agreement with Express Scripts, Inc. to provide Pharmacy Benefit Management Services to the Collier County Group Health Insurance Plan in the amount of $5,136,334 in FY 2012, a reduction 11.8 %. OBJECTIVE: To provide Pharmacy Benefit Management services to the Collier County Group Health Insurance Plan. CONSIDERATION: The Board of County Commissioners through the Risk Management Department administers a partially self- funded group health program (the Plan) for its employees and their covered dependents. A significant component of the Plan provides coverage for prescription medications. The Plan currently utilizes Express Scripts, Inc. to provide pharmacy benefit management (PBM) services. These services include the provision of a retail pharmacy network for acute and chronic medications and a mail order pharmacy network for chronic medications. The use of Express Scripts enables the county to purchase medications at rates which are significantly below average wholesale rates. In April, 2011 the employers of the Collier County Healthcare Consortium (the "CCHCC ") consisting of Collier County Government, the Collier County Sheriff, the District School Board of Collier County, and the NCH Healthcare System issued a joint Request for Proposals. Although one year remains on the current agreement, the employers decided to begin the process one year early to determine if the current agreement represents best value given the difficult economic environment. The RFP was released through the Purchasing Department of the District School Board of Collier County with the Consortium employers serving as the selection committee. Willis, Inc. the benefits and actuarial consultant to the Consortium members, provided technical assistance to the committee. The primary goal of the RFP is to leverage the purchasing power of the Consortium with its 22,000 covered lives to obtain competitive terms and pricing for the respective member agencies and their covered members. The RFP was sent to fourteen vendors. Responses were received from ten vendors. Upon completion of the initial review of the proposals, the committee created a shortlist of four vendors for interview. These companies were Express Scripts, Benecard, Medco and CVS Caremark. Interviews were completed and the list was further shortened to two vendors for best and final pricing. These vendors were Express Scripts and Benecard. The actuaries at Willis completed a pricing analysis and determined that both proposals presented significant savings when compared to the current pricing arrangement. Estimated savings for Collier County were $2,139,779 (Express Scripts) and $2,116,262 (Benecard) respectively over the three year contract. The committee reviewed both the pricing and non pricing aspects of each firm and the consensus was to recommend Express Scripts as the preferred vendor for the following reasons: The Express Scripts pricing presented a significant savings opportunity to the Consortium members. The Consortium entities have an established relationship with Express Scripts, thus, transition is minimal. Benecard is a small firm and did not have experience with groups of the size of the Consortium employers. The selection committee was concerned that the addition of a large number of covered lives might present service issues. Packet Page -519- 2/28/2012 Item 11.F. • Benecard would not agree to the uniform contract terms that were requested. The estimated savings over a three year contract for the entire Consortium group is $7,689,922 The District School Board approved the award to Express Scripts on December 13, 2011. The members of the CCHCC have finalized a common Agreement with Express Scripts to be utilized by each entity. The term of the agreement is for a three year period commencing ten days following the execution of the agreement. This Agreement (Contract No. 11 -5694) will terminate and replace the existing Express Scripts Agreement effective January 1, 2009. FISCAL IMPACT: It is estimated that this Agreement will result in total savings of $2,139,779 to the Board's Health Insurance Program over the three year agreement when compared to the current agreement. Funds are budgeted within Fund 517, Group Health and Life, Insurance Claims for this purpose. Estimated expenditures for pharmacy benefits in calendar year 2012 are $5,136,334 after rebates. GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this item. LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney's Office, is legally sufficient for Board action, and requires majority vote. — CMG RECOMMENDATION: That the Board awards a contract to Express Scripts, Inc. for Pharmacy Benefit Management Services and authorizes the Chairman to execute an Agreement for services after review by the County Attorney. PREPARED BY: Jeff Walker, CPCU, ARM, Director, Risk Management Packet Page -520- 2/28/2012 Item 111. COLLIER COUNTY Board of County Commissioners Item Number: 11.F. Item Summary: Recommendation to approve an Agreement with Express Scripts, Inc. to provide Pharmacy Benefit Management Services to the Collier County Group Health Insurance Plan in the amount of $5,136,334 in FY 2012, a reduction 11.8 %. (Jeff Walker, Director, Risk Management) Meeting Date: 2/28/2012 Prepared By Name: WalkerJeff Title: Director - Risk Management,Risk Management 1/4/2012 8:54:18 AM Approved By Name: SmithKristen Title: Administrative Secretary,Risk Management Date: 1/9/2012 9:53:32 AM Name: WoodLyn Title: Contracts Specialist,Purchasing & General Services Date: 1/12/2012 10:46:28 AM Name: CarnellSteve Title: Director - Purchasing /General Services,Purchasing Date: 1/19/2012 4:26:29 PM Name: GreeneColleen Title: Assistant County Attomey,County Attorney Date: 1/27/2012 10:45:11 AM Name: PriceLen Title: Administrator - Administrative Services, Date: 2/1/2012 1:07:42 PM Name: KlatzkowJeff Title: County Attorney Packet Page -521- Date: 2/17/2012 9:23:21 AM Name: FinnEd Title: Senior Budget Analyst, OMB Date: 2/21/2012 11:18:06 AM 2/28/2012 Item 11. F. Name: IsacksonMark Title: Director -Corp Financial and Mgmt Svs,CMO Date: 2/21/2012 5:21:59 PM Packet Page -522- 2/28/2012 Item 115. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis Executive Summary Express Scripts (ESI) provides pharmacy benefit management (PBM) services to the Collier County Health Care Consortium (CCHCC), which is comprised of The District School Board of Collier County (DSBCC), Collier County Government (CCG), Collier County Sheriffs Office (CCSO) and NCH Healthcare System (NCH). Effective December 3111, 2012 the current four -year agreement with Express Scripts (ESI) will expire. ESI has been the vendor for the CCHCC employers as a total group since 2002. An analysis conducted by Willis in early 2011 suggested that these four employers would spend about $74 million dollars on pharmacy benefits over the upcoming three years under the current contract terms with ESI. The CCG's share of this is $18.1 million. Given the continuing weak economy and budget crisis and to ensure that ESI represents the best pharmacy cost solution to the CCHCC, the members asked that Willis and the National Actuarial Practice of Willis to prepare a request for proposal, solicit competitive bids, help analyze the responses and guide the group and each employer in selecting the vendor that best meets their needs. After careful consideration, the CCHCC selected BeneCard, Caremark, ESI and Medco as finalists in the selection process. At the request of the CCHCC, Willis requested best and final offers, analyzed the best and final offers and facilitated interviews with the four finalists. After analyzing the best and final offers and conducting the interviews the field was narrowed to BeneCard and ESI. After review of the analysis, the CCG, DSBCC and NCH Healthcare System elected to stay with ESI for 2012 with the option to remain for two additional years. The CCSO elected to pursue an independent course of action. The principal factor influencing the CCSO decision was not having Walgreens in the ESI network. ESI agreed to hold the terms quoted for the entire group for the remaining three. The CCG, DSBCC and NCH members of the evaluation team made the recommendation to stay with ESI based on the following reasons: • Although it is difficult to estimate the precise savings due to changes in the mix of that will be used in future years as well as the McKesson settlement, the terms offered by ESI should produce over $7.7 million savings over the current terms for the next three years. This will result in $3 million savings that will accrue to the DSBCC, $2.1 million to the CCG and $1.4 million to NCH. • The analysis suggests that the projected costs of ESI will be less than BeneCard over the next three years for the CCHCC in total and for the CCG within the limitations noted above. • Although the agreement binds ESI to specific terms and conditions, each employer has the right to terminate the agreement for any reason after the first year of the agreement. • Walgreens entered into a public disagreement with ESI. Walgreens' strategy has included urging employees to petition their Human Resources Departments to change PBM vendors so they could continue to use Walgreens. Although it is difficult to determine the exact nature of the disagreement, available data suggests Walgreens costs are higher when compared to other retail pharmacies. The DSBCC, CCG and NCH were very concerned about implying to the community that health care providers requesting higher reimbursements can circumvent communication with employers and directly engage covered plan members in the negotiation process. The group did not wish to be in a position where it suggests to the provider community that such behavior would result in modified contract terms or higher reimbursements. • The Walgreens issue may spill over and affect upcoming negotiations with other finalists. For example, Medco would not reveal the effective date of their agreement with Walgreens and BeneCard indicated their agreement with Walgreens is up for renewal in 2013. • ESI has agreed to put a portion of its fees at risk based on how the CCG and each employer will grade their service. Willis Page 1 Packet Page -523- 2/28/2012 Item 11.F. Collier County Health Care Consortium February s, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis ■ ESI has committed to assigning staff to meet the support needs of Community Health Partners ■ If ESI and Walgreens agree to terms, Walgreen's will be included in the network without revision to the terms presented. If the CCHCC elects to exclude Walgreens for 2012 whether they rejoin the network or not, ESI would have reduced the dispensing fees by $0.40 a script for 2012. The cost savings this produces does not justify keeping Walgreens out of the network should they elect to rejoin at a later date. Express Scripts has been a known quantity that has meet its savings and performance guarantees over the past several years and has shown good faith efforts to be a good partner to the CCHCC members, Community Health Partners and the local provider community. The balance of this document outlines the history and process used to reach this recommendation Willis Packet Page -524- Page 2 2/28/2012 Item 11. F. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis Report Index There are two Exhibits included with this report Exhibit I Evaluation of best and final offers from ESI and BeneCard adjusted for proposed contract terms Exhibit II Request for Proposal Background On January 1, 2002, members of the Collier County Health Care Consortium (CCHCC) consolidated administration of their pharmacy benefit programs with Express Scripts. Through this consolidation, members have achieved the following: • A consistent approach to administration and pricing • Lower administrative fees, significant discounts and greater rebates • A uniform formulary for plan members and physicians in the community • Leveraged purchasing power to ensure Express Scripts commitment and flexibility in working with CCHCC members and Community Health Partners (CHP) to develop innovative and meaningful pharmacy cost management strategies and processes • Direct online access to pharmacy data for Willis and CHP to support analysis of pharmacy costs and utilization • Direct online access to the Express Scripts claims system allowing CHP to pre- authorize specific drugs and profile physicians prescribing patterns Since the consolidation, Express Scripts has delivered on the promise to improve CCHCC employer understanding of the factors driving pharmacy cost and met the goals that established to increase generic usage across several classes of medications. In the spring of 2008, the CCHCC deemed it appropriate to conduct a due diligence process to again review the financial and service terms offered by Express Scripts. Although the analysis suggested savings would be realized by moving to CVS Caremark, the group unanimously agreed that a savings of $.50 per employee per month just did not warrant the expense and disruption associated with a change. Therefore, as a result of an extensive request for proposal process, the selection team made up of representatives of each employer of the CCHCC unanimously recommended that each employer enter into a three - year agreement with Express Scripts to provide pharmacy benefit services beginning on January 1, 2009. During the term of the agreement with ESI that started on January 1, 2009, the world changed significantly. The US experienced a significant financial crisis that has not abated as evidenced by continued weakness in the economy. The economic conditions have placed a significant strain on member employers of the CCHCC. Although the current agreement bound ESI to terms through 2012, the agreement allows any member of the CCHCC to leave at the annual anniversary with 90 days notice. Given this flexibility and the ongoing financial crisis, the group agreed it was vital to seek competitive bids for the management of the pharmacy program to ensure each member was receiving the best possible service at the lowest possible cost. Willis Page 3 Packet Page -525- 2/28/2012 Item 11. F. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis Request for Proposal and Evaluation Process The members of the CCHCC asked Willis to develop a request for proposal (RFP) document and assist in the evaluation of responses. The RFP document was developed and finalized after several meetings and in -depth discussion. A copy of the RFP document and accompanying documentation furnished with it is included with this report as Exhibit II. This document outlines the objectives of the RFP process, key selection criteria and the evaluation process. These vendors were selected to receive the RFP because of their national scope, experience in Florida and demonstrated ability to deliver transparent innovative pharmacy services to large public employers. This RFP was distributed to the following vendors on March 15, 2011. Proposals were due back to Willis on April 6, 2011. The purchasing department of the DSBCC supervised the process and provided input to the evaluation and procurement process. 1. Advisory Board 2. BeneCard 3. Blue Cross and Blue Shield of Florida 4. Clear Scripts 5. CatalystRx 6. CVS Caremark 7. Express Scripts 8. EnvisionRx 9. Navitus 10. Medco (Direct) 11. Medco (via Trion) 12. Prime Therapeutics 13. RxEDO 14. WellDyne 15, Wells Fargo TPA (Express Scripts) Of these 14 prospective vendors approached, 10 responded. The pharmacy benefit landscape is rapidly changing and several developments complicated the analysis and delayed a final decision. These were as follows: ■ ESI announced its intent to merge with Medco — the structure of the proposed deal suggests that ESI is acquiring versus merging with Medco. • Medco was awarded the PBM contract for the state of Florida. A condition of this award was to extend the states terms to any Florida municipality that wished to take advantage of them. • ESI's negotiations with Walgreens as a network pharmacy broke down and went public. Walgreen's has encouraged employees to lobby employers to change PBMs so they can continue to use Walgreens. ESI asserts that Walgreens is the most expensive distribution channel and would not agree to the increases Walgreens was demanding. Walgreens is not part of the ESI network for 2012. • Due to a lawsuit and subsequent settlement with McKesson concerning published wholesale prices, PBMs have changed the way they determine discounts. Willis Packet Page -526- Page 4 2/28/2012 Item 11.F. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis ■ Subtle ways in how PBM contacts are structured allow a vendor to make significant modifications to their discount and rebate guarantees. Many PBMs will not agree to uniform contract language making level playing field comparisons difficult. In April Willis conducted a preliminary analysis of the responses. Based on this analysis the CCHCC selected the following vendors as finalists: • BeneCard • CVS Caremark • ESI • Medco Finalist interviews were held from April 27th to the 29th. At the conclusion of the interviews, best and final offers were sought from the four finalists. BeneCard, ESI and Medco clearly offered significantly more attractive terms than CVS Caremark. As a result, Caremark was dropped from further consideration. When the merger of ESI and Medco was announced the group elected to drop Medco from further consideration. This was due to the merger and the fact that neither the direct quote nor the terms Medco offered to the State of Florida appeared to offer a significant financial advantage to the offers provided through BeneCard and ESI. Requests were made of BeneCard and ESI to agree to specific contract terms to allow a level playing field comparison between the discount and rebate guarantees for brand and generic drugs. As outlined later in this report, ESI would agree to those terms while BeneCard agreed to some, but not all. From a service perspective the Collier County Government and Collier County Sheriffs office had experienced lingering concerns with ESI. For that reason service guarantees were sought and provided by ESI. In addition the group received data from ESI allowing each member to assess the impact to members of the loss of Walgreens from the ESI network. Walgreens use ranged from a low of 11% for NCH healthcare to a high of 22% for the Collier County Government and is outlined in the table below for the first 4 months of 2011: Client Total Participants Used Walgreens Used Walgreens Exclusive) NCH Healthcare 5,876 1,134(19%) 663(11%) Collier County Government 4,519 1,314(29%) 971(22%) Collier County Sheriffs Office 3,154 768(24%) 446(14%) District School Board of Collier County 6,457 1,570(24%) 1,084(17%) How Pharmacy Benefit Managers Make Money and How It Affects the Analysis of Terms Quoted In approaching the process of evaluating prospective pharmacy benefit managers, it is important to recognize the various ways that pharmacy benefit managers make money and the assumptions that underlie the guarantees they make with regard to discounts. It is not as simple as looking at a fee to process claims. In conducting an analysis of terms, how PBMs classify certain medications and price claims will affect how they compare to one another. Willis analyzed the responses in a variety of ways and then requested uniform contract terms to attempt to level the playing Willis Page 5 Packet Page -527- 2/28/2012 Item 11. F. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis field between vendors and to allow the CCHCC to assess vendors from a variety of perspectives. The following summarizes the major areas that impact the terms quoted and the ultimate cost of the program: The following are the principal components that comprise the cost of a pharmacy program. 1. Administrative fees 2. Dispensing fees 3. Ingredient cost 4. Rebates 5. Discounts and discount guarantees 6. Special items (cost management programs, communications, ID cards, etc.) Pharmacy Benefit Managers (PBMs) make money in a variety of ways – following are the main "revenue" sources. — Administrative fees - Dispensing fees Ingredient cost Rebates Mail order Special items (cost management programs, communications, ID cards, etc.) Contract terms Administrative fees b Billed by PBM and paid by the client to cover operating expense. b Billed on either a per- script or per employee per month basis. b Maybe waived and offset with other "revenue" components, which began the concept of marketing a "free" administration. Dispensing fees b Generally cover pharmacy costs to fill the bottle. b Billed with ingredient cost for each script. b Portions may be retained by the PBM to fund operations. b May be different for brand and generic drugs. b May be waived and offset with other "revenue" components. * Differs from pharmacy to pharmacy – generally $1.25 to $2.50 renegotiated on an annual basis. Ingredient cost and assumptions that affect discount guarantees Willis b Generally, the amount paid to the pharmacy for a member's prescription by the PBM is the contracted amount. * Depending on contract language contracted amount is not necessarily what the client is billed by the PBM for that member's prescription – when the amount billed to the client is different from what is charged the difference is referred to as "spread ". b If the client is billed the lesser of the stated discount or what was actually charged (known as UCR) there is no "spread ". However, if the client is billed the contracted amount when the pharmacy is billed a lesser amount, the PBM retains the "spread." Keeping the spread allows the PBM to offer more competitive terms in other areas of their proposal. In addition, using UCR claims in the calculation of discounts guarantees allows the PBM to offer more generous guarantees. Agreements that PBMs offer can either include or exclude spread. Packet Page -528- Page 6 2/28/2012 Item 11. F. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis * For brand name drugs, the maximum payment is a percent off of "Average Wholesale Price or AWP'. Lawsuits have shown this is an inflated number and there are different sources for AWP that are updated at different times. b For generic drugs where more than one firm manufactures the drug, PBMs use a schedule called "Maximum Allowable Cost" or MAC — a flat fee for a medication irrespective of who made it or the size of the package the medication is dispensed from. b MAC lists vary from PBM to PBM and day.to day within a given PBM. If no MAC exists for a medication, pricing defaults to discount off AWP. b The actual percentage discount off AWP can differ from chain to chain, region to region and pharmacy to pharmacy. It is also important for the buyer to know if they are assessing an average, effective or net discount rate. Mail order Rebates b Mark -ups can vary considerably. b NDC is national drug code and defines the drug, package size it came in, dosage and type (pill, caplets, injectable, etc.) Repackaging for a unique NDC and price provides further variation. b PBMs can easily manipulate every cost component with mail order without knowledge by their clients. b Generally driven by brand name drugs. * Generic may be included an approach know as bundling. b Come from manufacturer to PBM and are then shared or passed through to the client. b Are volume sensitive on a retrospective basis. b Can be pass through, guaranteed or pocketed. For "rebates" more is not always better. Bigger rebates always look good especially if they are guaranteed — however, larger rebates come from the more expensive brand name drug. Generic usage reduces rebates, but reduces overall cost at a more rapid rate offsetting the loss of rebates! Special Items b Cost containment programs b Special reports * Other Contract Terms Contract terms can have a significant impact on the quoted discounts and rebate guarantees that a PBM might offer a prospective client. The major influencers are the definition of generic medications, how usual and customary (U &C) claims are handled, where in the calculation single source generics are included and whether guarantees stand as separate silos or are aggregated together. When performance guarantees are aggregated together, exceeding the goal in one are can be used to offset substandard performance in another. In their final offer, ESI agreed to all of the Willis terms. BeneCard agreed to most of the terms but would continue to include U &C claims in its calculation of discount guarantees and include single source generics in the calculation of the brand name discounts. Treating single source or originator generics as brand name drugs and including UCR claims in discount guarantee calculation allowed them to increase the size of discounts they guaranteed. Willis Packet Page -529- Page 7 2/28/2012 Item 11. F. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis As noted, above a PBM has choices with the rebates they receive from manufacturers. There are three ways to treat rebates. These approaches are referred to as "Transparent" "Pass Through" and "Guaranteed" or a combination. b Transparency — You know what portion of the rebates you will get, but since rebates are not guaranteed and will vary, it is impossible to evaluate which transparent offer is best. The agreements with manufacturers are different with each PBM. b Pass Through - you get all the rebates, no portion is retained and you only pay what the PBM pays the pharmacy. As is the case with a "transparent' arrangement, it is impossible to evaluate which offer is the best. b Guarantees — The basis for comparison is clear since amounts are guaranteed. During the last RFP process as well as this one, the CCHCC members carefully examined the issue of transparency and full pass through of rebates. In the past they decided it is best to go with a guarantee rather than full pass through. For this process ESI and BeneCard guaranteed a floor for the rebates for brand name drugs plus full pass thought of any additional amounts. Analysis of Financial Terms The following analysis approach was used to select finalists. First, a detailed analysis of financial terms was completed prior to a detailed qualitative review of responses or vendor interviews. This allowed the group to determine whether significant financial advantage resulted from the financial terms quoted by the vendors. If the financial analysis demonstrated a significant economic advantage justifying a possible change, a detailed qualitative analysis of each proposal would be completed as well as interviews with the top ranked vendors. Willis performed a detailed financial analysis of the following four areas affecting the ultimate cost of a pharmacy benefit program: 1. Total expected cost based on all facets of the program, quoted discounts, rebates and administrative fees. 2. Impact of rebates. 3. Fixed administrative fees, dispensing fees and other related administrative expenses, if applicable. 4. The per pill cost of the most common pharmacy drugs used by the CCHCC as quoted by the members. 5. Generic fill rates as a percentage of total drugs dispensed. 6. Contract language. To begin the analysis, Willis accessed the Express Scripts system to accumulate actual drug plan utilization for 2010 and 2011 for the four employers, including number of prescriptions and ingredient cost for brand and generic drugs, retail and mail order, and the amounts paid. Historical costs were then grossed up to total cost based on historical discounts obtained on both brand and generic drugs. The undiscounted historical cost was adjusted for post AWP settlements and then trended forward for the three year term proposed in the RFP. Each firm quoted terms that were then applied to the adjusted undiscounted claims expected on a gross level for the three year term of the agreement. Based on current enrollment and the actual experience data, prescription drug plan ingredient costs and number of prescriptions for the respective members were projected forward through 2014 assuming no plan design changes, a 1 % annual trend for brand use and 4% for generic and a 5% annual increase in the ingredient cost of medications. The cost and number of prescriptions was trended separately. This approach is more representative of total drug trend and provides a better determination of ultimate cost when some vendors charge fees based on the number of Willis Page 8 Packet Page -530- 2/28/2012 Item 11.F. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis drugs and others on the number of employees. A three year time frame was utilized in the financial analysis since that is the period of time vendors were asked to guarantee terms. The ingredient cost of drugs was projected on an "undiscounted" basis. This step was taken to ensure a uniform basis against which to compare the discounts each vendor was quoting. This was accomplished by "backing out" the average discount received from Express Scripts under their current pricing and making adjustments for the post AWP settlement. For example, if the discounted cost is $85, and the current discount is AWP -15 %, then the undiscounted ingredient cost would be $100. Going to the next step, if a vendor's quoted discount was AWP -16 %, for example, then the discounted cost shown in the comparison would be $84. For the three -year comparison, the quoted administration fees, dispensing fees, ingredient cost, and rebates were applied to each member's projected prescriptions, number of employees, and undiscounted ingredient cost to develop the three -year total costs. This analysis is always difficult and can be misleading since comparisons are done based on quoted fixed fees, discounts and rebates. Fixed fees will never change, but discounts and rebates are affected by contract language. When contract language is different it is difficult to value the economic impact different contract language will have on rebates and discounts. As Willis pushed the finalists to agree to consistent contract terms, final terms were modified by ESI to meet the requests of Willis. These modifications to the ESI quote made its final offer appear less favorable than their initial quote. However, this was not the case. ESI agreed to place single- source generic drugs under their overall generic discount guarantee. This required ESI to apply a slight downward adjustment to their generic discount guarantee. The process of how generics function in the marketplace when they are first available is what compelled ESI to take this approach. A single source generic occurs when a manufacturer loses patent protection for the medication. Other manufacturers are free to make the drug. It takes a while for them to ramp up and for a short period of time the initial manufacturer enjoys being the only source for the generic equivalent. For this reason the discounts for single sourced generics are greater than the average seen for brand -name drugs but significantly less than the discounts realized for generic medications when many manufacturers are competing for market share. The net effect of including single source generics in the brand -name guarantee is to make the discounts for both generic and brand -name drugs appear higher. In addition, some PBM's make it necessary that two manufacturers make the generic available and that there a sufficient supply before it is moved to the generic calculation. This allows significant discretion on behalf of the PBM. Willis believes this discretion is removed by making everyone agree to a single definition when the patent protection is lost and the drug is classified as a generic. ESI agreed to this request. BeneCard would not agree. In addition BeneCard includes usual and customary claims in its calculation of discount guarantees whereas ESI agreed not to. A usual and customary claim occurs when a pharmacy is selling the drug as a loss leader for less than the PBM's contracted amount. A common example of this is the generic medications Wal -Mart is selling for $4.00. This rate is below the contracted rate for the majority of the medications. This has the impact of making the discounts appear larger if they are included in the calculation. Since employers cannot control what medications may be sold for below the contracted rate, Willis believes they should not be included in the guarantee the vendor extends to a client. Leveling the playing field for differences in contract terms shows how discounts are affected which then affects how the two finalists rank as compared to one another. This final analysis suggests that ESI was the best choice for the CCHCC in total and if there were slight differences amount the employers that difference was not material and could not be construed as a guaranteed savings. Willis Page 9 Packet Page -531- 2/28/2012 Item 111. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis Summary of Non- Financial Terms Non - financial terms relate to the scope of services that a pharmacy benefit manager is able to offer to a client. These typically focus on customer service to employees and employer as well as tools to assist the client in managing utilization. Both firms offer 24 x 7 service accessed by plan members to a live person for assistance in getting pharmacy claims paid. Both firms offer comparable websites as well and service to employers. Several members of the CCHCC had experienced less than favorable service from ESI. To address this Willis asked ESI to agree to the following: Make a change in representative for the CCHCC. The CCHCC wanted a three -year agreement. However, given the lingering service issues and other concerns regarding network and the pending merger with Medco the group requested a 90 day termination for convenience clause included in the agreement. This would allow any of the members to exit the agreement for any reason they deem appropriate without penalty. In addition, assurances from ESI that should a member leave the terms of the remaining members would not be affected. Assign a dedicated person to work with Community Health Partners. This person would be expected to meet with Community Health Partners at least monthly and serve as a day to day focal point for assisting them in serving the CCHCC employers. Provide a physician advisor who can support addressing concerns that arise with local physicians regarding formularies and other issues related to the design of the pharmacy program. Provide service performance guarantees. The CCG has had significant problems in certain key areas. Of particular concern is the payment of compounded medications. ESI was requested to offer performance guarantees related to problem resolution. For example, if a problem is brought to ESI's attention that it gets fixed within a defined period of time or a financial penalty applies for each instance in which problem was not corrected on a timely basis. Confirm that pharmacy's other than Walgreens that are part of the ESI network in Collier County are open 24 hours. ESI agreed to these requirements with one minor modification. The proposed agreement requires notice for termination at the end of the first year of the agreement (2012) with a 90 day notice. ESI also agreed to place $.70 per member at risk for service performance. To accomplish this ESI agrees to provide an annual Account Management Satisfaction Survey. ESI guarantees that the Sponsor's overall satisfaction with Account Management will be greater than or equal to Meets Expectations. For the purposes of this guarantee, Sponsor's rating shall be defined on the following scale: Exceeds Expectations, Meets Expectations, Does Not Meet Expectations in any contract year. ESI shall be responsible for survey design, data collection, analysis, and all costs associated with conducting the surveys. The annual potential penalty is estimated as follows: Employer Members as of 8/31/2011 Cost at $0.70 /member Collier County Government* 4,895 $3,427 Collier County Sheriff 3,200 $2,240 Willis Packet Page -532- Page 10 2/28/2012 Item 111. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis District School Board 6,266 $4,386 NCH Healthcare 5,808 $4,066 Total 20,169 $14,118 " estimated as 2.5 members per employee. ESI also made one additional option available to the CCHCC employers. As of the present time, it appears Walgreens will not be a part of the ESI network for the foreseeable future. The attached analysis and terms provided by ESI assumes if an agreement is reached with Walgreens that they will immediately be added back to the network. If the CCHCC elects to exclude Walgreens for all of 2012 irrespective of whether an agreement is reached or not ESI will reduce the dispensing fees by $.40 a script. The savings associated with excluding Walgreen's for three years did not justify the risk of explaining to employees why they cannot access Walgreen's should ESI and Walgreens reach terms. The net impact of this to the employers for the three years of the agreement is summarized in below: $.40 /script Three -Year Total Scripts Reduction DSBCC 261,137 $104,455 CCSO 71,653 $28,661 NCH 115,586 $46,234 CCG 207,820 $83,128 Total 656,194 $262,478 Additional Issues Supporting the Decision to Stay With Express Scripts When the RFP process was started in the late winter of this year, with the exception of the lawsuit involving McKesson and AWP pricing, the pharmacy benefit management landscape was fairly well defined and had been stable for many years. In the summer this all changed. As noted earlier in this report, Walgreens and ESI entered into a relatively public and emotional battle over reimbursement rates, who controls plan design and other issues related to the delivery of prescriptions to the clients of both ESI and Walgreens. In addition, ESI and Medco announced their intent to merge. Since the announcement of the merger many people believe as was the case with AT &T and T- Mobile that the Justice Department may block the merger. This has relevance to the CCHCC since Medco was one of the front runners prior to the announced merger. In addition Medco was awarded the PBM business for the state of Florida. As part of this agreement, identical terms must be made available to every Florida municipality. Finally, we are seeing an unprecedented number of blockbuster drugs that will be going off patent in the next few years and becoming available in generic form. At the same time, we see the cost and use of specialty medications increasing. This also will drive change in the industry. It is very hard to forecast what will happen during the next year. There did not appear to be a significant service or any monetary gain to be had by making a change to another vendor. Since ESI will allow the employers to exit the agreement for any reason at the end of 2012, and the new contract pricing is more favorable than the old, staying with ESI generates immediate savings while allowing the CCHCC to monitor the changing landscape. Willis Page 11 Packet Page -533- 2/28/2012 Item 111. Collier County Health Care Consortium February 9, 2012 Report on Request for Proposal for Managed Pharmacy Services Analysis Potentially the CCHCC could issue another request for proposal this year should the changing landscape or the service of ES] suggest it would be advantageous to do so. If a change were made now another change might be suggested for 2013 depending on what happens in the coming months. In summary there appeared to be no gain in making a change and much to be gained by waiting to see what the future brings. The group has considerable flexibility this year to analyze the landscape and react to the changes as the future becomes clearer. Evaluation Team Throughout this report, reference is made to the "group" evaluation of responses and analysis prepared by Willis. The group included the following representatives of the member organizations comprising the CCHCC who participated in reviewing the results and making the recommendation outlined in this report. CCG: Jeff Walker Alice Toppe Sonja Sweet NCH: Brian Settle Renee Thigpen Andrew Nottingham CCSO: Andrea Marsh Mike Rice Alice Bukowczyk DSBCC: Rebecca Olson Cynthia Battle Jane Knoble Mandalich Because of the importance of the PBM's support to Community Health Partners in system wide provider support of pharmacy initiatives, select members of CHP also participated in the process. Willis provided technical guidance and financial analysis and assisted the group in writing this report and recommendation. The following individuals from Willis assisted in this process: • Douglas J. Ley, Senior Vice President / Director, National Actuarial Practice, Willis Employee Benefits • Clete R. Anderson, Assistant Vice President, National Actuarial Practice, Willis Employee Benefits • Sheryl Henry FSA, MAAA, Vice President, National Actuarial Practice, Willis Employee Benefits • Orlando Neal, MBA Actuarial Analyst National Actuarial Practice, Willis Employee Benefits • Susan Wiesing, Account Executive /Assistant Vice President, Willis Employee Benefits • Stephen Buell, Vice President, Willis Employee Benefits • Mike Meredith, Executive Vice President, South Florida Practice Leader, Willis Employee Benefits This process was conducted under the supervision of the District School Board of Collier County's Purchasing Department. Willis Packet Page -534- Page 12 2/28/2012 Item 11. F. EXPRESS SCRIPTS, INC. PHARMACY BENEFIT MANAGEMENT AGREEMENT #11 -5694 THIS PHARMACY BENEFIT MANAGEMENT AGREEMENT ( "Agreement ") will be effective as of the date set forth in Section 6.1 and is entered into by and between EXPRESS SCRIPTS, INC., a Delaware corporation ( "ESI "), and COLLIER COUNTY GOVERNMENT, a political subdivision of the State of Florida ( "Sponsor"). RECITALS A. ESI, either directly or through its subsidiaries, engages in pharmacy benefit management services, including, among other things, pharmacy network contracting; pharmacy claims processing; mail and specialty drug pharmacy; clinical, safety, adherence and other like programs; and formulary and rebate administration ( "PBM Services "). B. Sponsor provides or arranges for the provision of health benefits, including a prescription drug benefit. Sponsor's Plan (as defined below) is administered by Sponsor's third party administrator Allegiance Benefit Plan Management, Inc. C. ESI and Sponsor - desire that ESI be the exclusive provider of PBM Services for Sponsor's Plan under the terms and conditions set forth herein. THEREFORE, in consideration of the mutual promises contained herein, the parties hereto agree as follows: TERMS OF AGREEMENT ARTICLE I - DEFINITIONS "Ancillary Supplies, Equipment, and Services" or "ASES" means ancillary supplies, equipment, and services provided or coordinated by CuraScript in connection with CuraScript's dispensing of Specialty Products. ASES may include all or some of the following: telephonic and /or in- person training, nursing /clinical monitoring, medication pumps, tubing, syringes, gauze pads, sharps containers, lancets, test strips, other supplies, and durable medical equipment. The aforementioned list is illustrative only (not exhaustive) and may include other supplies, equipment, and services based on the patient's needs, prescriber instructions, payer requirements, and /or the Specialty Product manufacturer's requirements. "Average Wholesale Price" or "AWP" means the average wholesale price of a prescription drug as identified by drug pricing services such as Medi -Span or other source recognized in the retail prescription drug industry selected by ESI (the "Pricing Source "). The applicable AWP shall be the 11 -digit NDC for the product on the date dispensed, and for prescriptions filled in (a) Participating Pharmacies and CuraScript will be the AWP for the package size from which the prescription drug was dispensed, and (b) in the Mail Service Pharmacy the AWP for the smaller of: (i) the NDC code for the package size from which the prescription drug was dispensed, or (ii) package sizes of 100 units or 16 ounce quantities, or the next larger quantity if such specified quantities are not available. "Brand Drugs" mean single- source and multisource drug products based on indicators set forth in various drug pricing sources recognized in the retail prescription drug industry, as reasonably determined by ESI consistent with its standard practice utilized for all clients. Notwithstanding the foregoing, certain prescription drug medications that are licensed and then currently marketed as brand name drugs, where there exists at least one (1) competing prescription medication that is a generic equivalent and interchangeable with the marketed brand name drug, may process as "Generic Drugs" for Prescription Drug Claim adjudication and Member Copayment purposes. "Copayment" means that portion of the charge for each Covered Drug dispensed to the Member that is the responsibility of the Member (e.g., copayment, coinsurance and/or deductible) as indicated on the Set -Up Forms. 185275.2 Packet Page -535- 2/28/2012 Item 111. "Covered Drug(s)" means those prescription drugs, supplies, Specialty Products and other items that are covered under the Plan, each as indicated on the Set -Up Forms. "CuraScript' means CuraScript, Inc. or another pharmacy wholly - owned or operated by ESI or its wholly -owned subsidiaries that primarily dispenses Specialty Products. "Eligibility Files" means the list submitted by Sponsor to ESI in reasonably acceptable electronic format indicating persons eligible for drug benefit coverage services under the Plan. "Formulary" means the list of FDA - approved prescription drugs and supplies developed by EST's Pharmacy and Therapeutics Committee and /or customized by Sponsor, and which is selected and /or adopted by Sponsor. Routine additions and /or deletions to the Formulary are hereby adopted by Sponsor, subject to Sponsor's discretion to elect not to implement any such addition or deletion through the Set -Up Form process. "Generic Drug" means a prescription drug, whether identified by its chemical, proprietary, or non- proprietary name, that is therapeutically equivalent and interchangeable with drugs having an identical amount of the same active ingredient(s) and approved by the FDA.. For purposes of this Agreement, the Generic Drug determination is made using indicators from First Databank (or other source nationally recognized in the prescription drug industry used by ESI for all clients) on the basis of a standard brand /generic algorithm utilized by ESI for all of its clients, a copy of which may be made available for review by Sponsor upon request. "Mail Service Pharmacy" means a duly licensed pharmacy operated by ESI or its subsidiaries, other than CuraScript, where prescriptions are filled and delivered to Members via mail delivery service. "Manufacturer Administrative Fees" means those administrative fees paid by pharmaceutical manufacturers to, or otherwise retained by, ESI pursuant to a contract between ESI and the manufacturer and directly in connection with ESI's administering, invoicing, allocating and collecting the Rebates under the Rebate program. "MAC List" means a list of prescription drug products identified as readily available as Generic Drugs, generally equivalent to a Brand Drug (in which case the Brand Drug may also be on the MAC List) and which are deemed to require pricing management due to the number of manufacturers, utilization and pricing volatility. "Maximum Reimbursement Amount' or "MRA" means the maximum reimbursement payment schedules developed or selected by ESI. The payment schedules specify the maximum unit ingredient cost payable by Sponsor for drugs on the MAC List. The application of MRA pricing may be subject to Sponsor defined plan design and coverage policies. "Member" means each person who Sponsor determines is eligible to receive prescription drug benefits as indicated in the Eligibility Files. "Member Submitted Claim" means a paper claim submitted by a Member for Covered Drugs dispensed by a pharmacy other than a Participating Pharmacy or for which the Member paid cash. "Participating Pharmacy" means any licensed retail pharmacy with which ESI has executed an agreement to provide Covered Drugs to Members, but shall not include any mail order or specialty pharmacy affiliated with any such Participating Pharmacy. Participating Pharmacies are independent contractors of ESI. "PMPM" means per Member per Month fee, if applicable, as determined by ESI from the Eligibility Files. "PEPM" means per employee per Month, if applicable, as determined by ESI from the Eligibility Files. "Plan" means the prescription drug benefit portion of Sponsor's welfare benefit plan(s). "Prescription Drug Claim" means a Member Submitted Claim, Subrogation Claim or claim for payment submitted to ESI by a Pharmacy as a result of dispensing Covered Drugs to a Member. "Rebates" mean retrospective rebates that are paid to ESI pursuant to the terms of a rebate contract negotiated independently by ESI with a pharmaceutical manufacturer, and directly attributable to the utilization 185275.2 Packet Page -536- 2/28/2012 Item 11.F. of certain Covered Drugs by Members. Rebates do not include Manufacturer Administrative Fees; product discounts or fees related to the procurement of prescription drug inventories by or on behalf of ESI owned and operated specialty or mail order pharmacies; fees received by ESI from manufacturers for care management or other services provided in connection with the dispensing of Specialty Products; or other fee - for - service arrangements whereby pharmaceutical manufacturers generally report the fees paid to ESI or its affiliates for services rendered as "bona fide service fees" pursuant to federal laws and regulations, including, but not limited to the Medicaid "Best Price" rule (collectively, "Other Pharma Revenue "). Such laws and regulations, as well as EST's contracts with pharmaceutical manufacturers, generally prohibit ESI from sharing any such "bona fide service fees" earned by ESI, whether wholely or in part, with any ESI client. ESI represents and warrants that it will not enter into any agreement with a pharmaceutical manufacturer for Other Pharma Revenue in exchange for a reduction of Rebates. "Set -Up Forms" means any standard ESI document or form, which when completed and signed by Sponsor, will describe the essential benefit elements and coverage rules adopted by Sponsor for its Plan. "Specialty Product List" means the standard list of Specialty Products maintained by ESI and their reimbursement rates under the applicable (exclusive or open) option, as updated by ESI from time to time. The Specialty Product List is available to Sponsor upon request. "Specialty Products" means those injectable and non - injectable drugs typically having one or more of several key characteristics, including: frequent dosing adjustments and intensive clinical monitoring to decrease the potential for drug toxicity and increase the probability for beneficial treatment outcomes; intensive patient training and compliance assistance to facilitate therapeutic goals; limited or exclusive product availability and distribution; specialized product handling and /or administration requirements and /or cost in excess of $500 for a 30 -day supply. ESI updates the list of Specialty Products as new drugs are brought to market. "Subrogation Claim" means subrogation claims submitted by any state or a person or entity acting on behalf of a state under Medicaid or similar United States or state government health care programs, for which Sponsor is deemed to be the primary payor by operation of applicable federal or state laws. "Usual and Customary Price" or "U &C" means the retail price charged by a Participating Pharmacy for the particular drug in a cash transaction on the date the drug is dispensed as reported to ESI by the Participating Pharmacy. ARTICLE 11- PBM SERVICES 2.1 Eligibility /Set Up. Sponsor will submit completed Set -Up Forms and Eligibility Files (initial and updated) on a mutually determined basis, which ESI will accurately implement. Changes to the Set -Up Forms must be documented on EST's standard amendment forms. Eligibility performed manually by ESI for Sponsor, or material changes to the Eligibility File processes requested by Sponsor during the term may be subject to additional fees set forth on Exhibit A. Sponsor will be responsible for all Prescription Drug Claims during the period of the Member's eligibility as indicated on the Eligibility File including for retroactively termed Members, except in the event of EST's negligence. 2.2 Pharmacy Network. (a) Participating Pharmacies. ESI will maintain a network(s) of Participating Pharmacies as identified in Exhibit A, and will make available an updated list of Participating Pharmacies on -line. ESI maintains multiple networks and subnetworks, and periodically consolidates networks or migrates clients to other networks and subnetworks. Upon Sponsor's written request, ESI will make good faith efforts to add any additional retail pharmacy to the Participating Pharmacy network for Sponsor, provided that such pharmacy meets ESI's network participation requirements and agrees to EST's standard terms and conditions. If ESI pays any such Participating Pharmacy a higher rate than EST's standard network rate, the rate charged to Sponsor for Prescription Drug Claims processed through such Participating Pharmacy will be the net ingredient cost plus the dispensing fee paid by ESI to such Participating Pharmacy (plus applicable sales or excise tax or other governmental surcharge, if any; Sponsor is sales tax exempt pursuant to Chapter 212, Florida Statutes). All such Prescription Drug Claims will be excluded from the pricing guarantees set forth in Exhibit A. 185275.2 Packet Page -537- 2/28/2012 Item 11.F. (i) ESI will require each Participating Pharmacy to meet EST's network participation requirements, including but not limited to licensure, insurance and provider agreement requirements. ESI also performs electronic and on -site audits of Participating Pharmacies to determine compliance with their provider agreements. ESI will attempt recovery of identified overpayments through offset, demand or other reasonable means; provided that ESI will not be required to institute litigation. Recovered overpayments are credited to Sponsor. To compensate ESI for the cost of conducting audits, ESI charges a standard audit fee in the amount set forth in Exhibit A upon recovery of overpayments. Copies of participation requirements and auditing processes are available upon request. (ii) ESI does not direct or exercise any control over the professional judgment exercised by any pharmacist in dispensing prescriptions or otherwise providing pharmaceutical related services at a Participating Pharmacy. (b) Mail Service Pharmacy. Members may have, prescriptions filled through the Mail Service Pharmacy. Subject to applicable law, ESI may communicate with Members regarding benefit design, cost savings, availability and use of the Mail Service Pharmacy, as well as provide supporting services. (c) Specialty Products and ASES. As elected by Sponsor on the Set -Up Forms, Members may have prescriptions filled through CuraScript on an exclusive basis (i.e., "CuraScript — Exclusive Care ") or at Participating Pharmacies and through CuraScript (i,e., "CuraScript — Open Care "). Subject to applicable law, ESI and CuraScript may communicate with Members and physicians to advise Members filling Specialty Products at Participating Pharmacies of the availability of filling prescriptions through CuraScript. Specialty Products will be excluded from any price guarantees set forth in the Agreement. In no event will the Mail Service Pharmacy or Participating Pharmacy pricing specified in the Agreement apply to Specialty Products. (i) ESI will notify Sponsor no more frequently than monthly of new Specialty Products that are introduced to the market on or after the Effective Date of this Agreement with their applicable reimbursement rates ( "Notice "). The parties agree as follows: (A) If Sponsor has expressly excluded a specific therapy class or product on a Set -Up Form, Specialty Products in such excluded classes will automatically be deemed excluded from coverage and will reject as "NDC Not Covered" through Participating Pharmacies, Mail Service Pharmacy and CuraScript; otherwise, all other Specialty Products will be implemented as Covered Drugs at the rate specified in the applicable Specialty Drug list or Notice. If Sponsor desires to cover otherwise excluded Specialty Products, Sponsor must notify ESI in writing that it desires to cover the Specialty Product before ESI will adjudicate as a Covered Drug, and if ESI receives such confirmation of coverage from Sponsor such Specialty Product will be loaded thereafter as a Covered Drug at the applicable reimbursement rate set forth in the Notice. (B) Sponsor must notify ESI in writing if it wants to exclude the Specialty Product from coverage. The exclusion will be implemented within seven (7) business days after the date of EST's receipt of such notification. There will not be any retroactive denials for Prescription Drug Claims processed prior to EST's receipt of the rejection notice and implementation of the exclusion as provided above and Sponsor will be responsible for the payment of such Prescription Drug Claims processed prior to the rejection of coverage. (ii) For Specialty Products filled through CuraScript only, Members may receive the following services from CuraScript, depending on the particular therapy class or disease state: ASES; patient intake services; pharmacy dispensing services and /or social services (patient advocacy, hardship reimbursement support, and indigent and patient assistance programs). (iii) Subject to Sponsor's prior authorization requirements, if applicable, at the rates set forth in Exhibit A, ESI will provide or coordinate ASES for Members through CuraScript or through other specialty pharmacies or other independent third party providers of ASES when ASES is required. If ESI or CuraScript engages a third party provider of ASES, ESI or CuraScript shall contractually obligate such third party provider of ASES to comply with all applicable laws, including, without limitation, all applicable laws relating to professional licensure. ESI does not direct or exercise any control over any third party provider of ASES in administering Specialty Products or otherwise providing ASES. 185275.2 Packet Page -538- 2/28/2012 Item 11.F. (iv) If Sponsor elects the CuraScript - Open Care option, then any ancillary supplies, equipment, and services provided or coordinated in connection with the dispensing of Specialty Products at Participating Pharmacies (for example, limited distribution products not then available through CuraScript or overrides) will be billed to Sponsor at the cost charged to ESI for such ancillary supplies, equipment, and services provided or coordinated, unless such ancillary supplies, equipment, and services provided or coordinated are included in the ingredient cost of the Specialty Product. 2.3 Claims Processing. (a) Claims Processing. (i) ESI will perform claims processing services for Covered Drugs dispensed by Participating Pharmacies, Mail Service and CuraScript. The "per Rx" administrative fees set forth in Exhibit A shall be charged for all claims processing services, including initial, rejected, reversed and reprocessed Prescription Drug Claim processing. (ii) ESI will perform a standard concurrent drug utilization review ( "DUR ") analysis of each prescription submitted for processing on -line by a Pharmacy in order to assist the dispensing pharmacist and prescribing physician in identifying potential drug interactions, incorrect prescriptions or dosages, and certain other circumstances that may be indicative of inappropriate prescription drug usage. EST's DUR processes are not intended to substitute for the professional judgment of the prescriber, the dispensing pharmacist or any other health care professional providing services to the Member. (iii) If elected by Sponsor, ESI will process Member Submitted Claims in accordance with the rules in the Set -Up Forms and ESI's standard procedures. (iv) If authorized by Sponsor on the Set -Up Forms, ESI will process Subrogation Claims in accordance with applicable federal and state laws, in which case Sponsor will pay such Subrogation Claims in accordance with Article III and Exhibit A. If Sponsor does not authorize ESI to process Subrogation Claims, ESI will refer claimants to Sponsor regarding such claims, in accordance with applicable federal and state laws. ESI is not legally responsible to pay Subrogation Claims to the extent Sponsor is not timely paying ESI with respect to such Subrogation Claims. (v) Sponsor or its third party designee (as applicable) will have the final responsibility for all decisions with respect to coverage of a Prescription Drug Claim and the benefits allowable under the Plan, including determining whether any rejected or disputed claim will be allowed. (b) Prior Authorization. For the fees set forth on Exhibit A (if applicable), ESI will provide prior authorization ( "PA ") services as specified and directed by Sponsor for drugs designated on the Set -Up Form. Prior authorized drugs must meet Sponsor- approved guidelines ( "Guidelines ") before they are deemed to be Covered Drugs. Sponsor authorizes coverage for an otherwise excluded use in the event of co- morbidities, complications and other factors not otherwise expressly set forth in the Guidelines, unless Sponsor directs that Sponsor be provided such issue for determination. In determining whether to authorize coverage of such drug under the PA Program, ESI will apply only the Guidelines and may rely entirely upon information about the Member and the diagnosis of the Member's condition provided to it from the prescriber. ESI will not undertake to determine medical necessity, make diagnoses or substitute ESI's judgment for the professional judgment and responsibility of the physician. (c) Claims for Benefits. ESI will process initial "claims for benefits" for Member Submitted Claims and PA requests consistent with the ERISA claims rules set forth in 29 CFR Part 2560 (or applicable state law if a non - ERISA plan) ( "Claims Rules "). ESI will not conduct any appeals of denied "claims for benefits," however, Sponsor may elect to have ESI facilitate appeals through MCMC, LLC ( "UM Company ") for the fees set forth in Exhibit A, or through a third party of Sponsor's choice. In any case, ESI will route Member appeals to UM Company (Sponsor or other Sponsor designated entity). Sponsor must execute a standard ESI "Internal Appeals Services" Set -Up Form, which may be requested through ESI Account Management, in order to receive such services from MCMC. 185275.2 Packet Page -539- 2/28/2012 Item 11. F. (d) UM Company. In the event Sponsor elects to utilize the UM Company, the UM Company will be responsible for conducting the appeal on behalf of Sponsor in accordance with the Claims Rules, and Sponsor acknowledges and agrees that: 0) ESI is not acting as a fiduciary in connection with the appeals being conducted by the UM Company, and ESI will not be named by Sponsor as a fiduciary in connection with such appeals; the UM Company, and not ESI, will be conducting appeals on behalf of Sponsor; the UM Company is an independent contractor of ESI and ESI does not in any way control or direct the UM Company with respect to appeals conducted by the UM Company. (ii) ESI represents to Sponsor that UM Company has contractually agreed that: (A) UM Company will conduct appeals in accordance with the Claims Rules and Sponsor's plan, (B) Sponsor is a third party beneficiary of UM Company's agreement with ESI (a copy of which is available upon request) and the remedies set forth therein, and (C) UM Company will indemnify Sponsor for third party claims caused by the UM Company's negligence or willful misconduct in providing the appeal services. ESI will not be liable to Sponsor for any injury or damages arising as a result of the UM Company's acts or omissions. (e) External Review Services. ESI will not conduct any external review services (as defined in the Patient Protection and Affordable Care Act of 2010 and its implementing regulations ( "PPACA ")); provided, however, Sponsor may elect to have UM Company facilitate the provision of external review services through MCMC contracted IROs (as such term is defined in PPACA), for the fees set forth on Exhibit A below (if applicable). Sponsor must execute a standard ESI "External Appeals Services" Set -Up Form, which may be requested through ESI Account Management, in order to receive such services from MCMC. In the event that Sponsor elects to utilize MCMC to facilitate the provision of external review services through MCMC contracted IROs, MCMC will be responsible for facilitating all such appeals (and the IROs will be responsible for providing all such appeals) in accordance with PPACA and all other applicable federal and state laws, and Sponsor hereby acknowledges and agrees that: 0) MCMC (with respect to facilitating the external reviews) and the IROs (with respect to performing the external reviews), and not ESI, will be providing external review services; MCMC is an independent contractor of ESI; the IROs are independent contractors of MCMC and not ESI; and ESI does not in any way control or direct either MCMC or the IROs with respect to facilitation or performance of external review services provided by each respectively. (ii) ESI represents to Sponsor that MCMC has contractually agreed that: (A) MCMC will facilitate all external review services in accordance with PPACA and all other applicable federal and state laws; (B) MCMC will contractually require its contracted IROs to perform all external reviews in accordance with PPACA and all other applicable federal and state laws; (C) to the extent not prohibited by law, MCMC will indemnify, defend and hold Sponsor harmless from and against any and all losses, damages, injuries, causes of action, claims, demands and expenses (including reasonable attorney's fees, costs and expenses), arising out of, resulting from, or related to any act, omission or default by the IROs in their performance of the external reviews; and (D) Sponsor has third party beneficiary rights to enforce the preceding indemnification and hold harmless provision. (f) Call Center. ESI will provide 24 -hours a day, 7 -days a week toll -free telephone, IVR and Internet support to assist Sponsor, Sponsor's agents and Members with Member eligibility and benefits verification, location of Pharmacies or other related Member concerns. 2.4 Formulary Support and Rebate Management. (a) Formulary Adherence and Clinical Programs. ESI may provide clinical, safety, adherence and other like programs as appropriate. Exhibit A sets forth certain available adherence, clinical, safety and /or trend programs that require additional fees hereunder. ESI will not implement any such program for which Sponsor may incur an additional fee without Sponsor's prior written approval and election of such program. 185275.2 Packet Page -540- 2/28/2012 Item 11. F. (b) Rebate Program. Subject to the remaining terms of this Agreement, ESI will pay to Sponsor the amounts set forth on Exhibit A. 2.5 Program Operations. (a) Reporting. ESI will make available to Sponsor EST's on -line standard management information reporting applications. Upon Sponsor's request, ESI may develop special reporting packages or perform custom programming at EST's standard hourly rate for such services, as set forth in Exhibit A. (b) Claims Data. (i) Claims Data Retention. ESI will retain Sponsor's claims data for a total of ten (10) years from the date the prescription is filled. Thereafter ESI will dispose of such data in accordance with its standard policies and practices and applicable state and federal law. Disposition of PHI shall be in accordance with the Business Associate Agreement. (ii) Claims Data to Vendors. Upon Sponsors written request and at no additional charge, ESI will provide regular prescription claims data in EST's standard format(s) to Sponsor's vendors ( "Vendors ") for disease management, flexible savings account and other "payment," "treatment" and "healthcare operations" purposes (as defined under HIPAA). Requests for retrieval of data beyond thirty (30) months are subject to the hourly custom programming charge set forth in Exhibit A. (iii) De- Identified Claims Data. ESI or its affiliates may use and disclose both during and after the term of this Agreement the anonymized claims data (de- identified in accordance with HIPAA) including drug and related medical data collected by ESI or provided to ESI by Sponsor for research; provider profiling; benchmarking, drug trend, and cost and other internal analyses and comparisons; clinical, safety and /or trend programs; ASES; or other business purposes of ESI or its affiliates, in all cases subject to applicable law. (c) Sponsor Audits. Provided that this Agreement has been duly executed by Sponsor and Sponsor is current in the payment of invoices under this Agreement, Sponsor may, upon written request, audit the prescription management services provided pursuant to this Agreement on an annual. basis (unless additional audits are warranted), consistent with the Audit Protocol set forth in Exhibit B. Sponsor may use an independent third party auditor ( "Auditor"), so long as such Auditor does not have a conflict of interest with ESI (as determined by ESI acting reasonably and in good faith), and provided that Sponsor's Auditor executes a mutually acceptable confidentiality agreement. Any request by Sponsor to permit an Auditor to perform an audit will constitute Sponsor's direction and authorization to ESI to disclose PHI to the Auditor. (d) Performance Standards. ESI will conform to the performance standards set forth on Exhibit E hereto. The payments set forth in Exhibit E will be Sponsor's sole monetary remedy for any failure by ESI to meet a performance standard in addition to any correction or reimbursement associated with payment or billing errors. ARTICLE III - FEES; BILLING AND PAYMENT 3.1 Fees. In consideration of the PBM Services provided by ESI, Sponsor will pay the applicable claims reimbursement amounts ( "Claims Reimbursements ") and other administrative fees ( "Administrative Fees," and together with Claims Reimbursements, "Fees ") pursuant to the terms set forth in Exhibit A. 3.2 Billing and Payment. (a) Billing. ESI will invoice Sponsor twice per month for all applicable Fees. (b) Payment. Sponsor will pay ESI by wire, ACH transfer or pre - authorized debit within two (2) days from the date of Sponsor's receipt of each ESI invoice. Sponsor will be responsible for all costs of collection, and agrees to reimburse ESI for such costs and expenses, including reasonable attorneys' fees. All amounts not paid by the due date thereof will bear interest in accordance with Chapter 218, Florida Statutes, also known as the "Local Government Prompt Payment Act." In addition to any rights under Section 6.2, ESI may apply Rebate amounts otherwise owed to Sponsor against any unpaid Fees. 185275.2 Packet Page -541- 2/28/2012 Item 11. F. ARTICLE IV — HIPAA; CONFIDENTIAL INFORMATION 4.1 HIPAA. The parties agree that as relates to use and disclosure of PHI, electronic transaction standards and security of electronic PHI under the Health Insurance Portability and Accountability Act of. 1996, as amended, they are subject to the terms of the Business Associate Agreement set forth in Exhibit C. Notwithstanding the foregoing, the parties acknowledge that in providing services to Members, CuraScript and the Mail Service Pharmacy are acting as separate health care provider covered entities under HIPAA and not as business associates to the Plan covered by the Business Associate Agreement. In providing services, CuraScript and the Mail Services Pharmacy shall abide by all HIPAA requirements applicable to covered entities and shall safeguard, use and disclose Member PHI accordingly. 4.2 Confidential Information. (a) Each party agrees that the terms of this Agreement and information of the other party, including, but not limited to and the following, will constitute confidential and proprietary information ( "Confidential Information "): (i) with respect to ESI: EST's reporting and other web -based applications, eligibility and adjudication systems, system formats and databanks (collectively, " ESI's Systems "), clinical or formulary management operations or programs, anonymized claims data (de- identified in accordance with HIPAA); CuraScript and Mail Service Pharmacy data; information and contracts relating to Rebates and Manufacturer Administrative Fees, prescription drug evaluation criteria, drug pricing information, and Participating Pharmacy agreements; and (ii) with respect to Sponsor: Participating Pharmacy Sponsor and Member identifiable health information and data, Eligibility Files, Set -Up Form information, business operations and strategies. Subject to Section 7.10 of this Agreement, neither party will use the other's Confidential Information, or disclose it or this Agreement to any third party (other than Sponsor attorneys and accountants), at any time during or after termination of this Agreement, except as specifically contemplated by this Agreement or upon prior written consent, which will not unreasonably be withheld. Upon termination of this Agreement, each party will cease using the other's Confidential Information, and all such information will be returned or destroyed upon the owner's direction. Confidential Information does not include information which is or becomes generally available to the public; was within the recipient's possession or knowledge prior to its being furnished to the recipient pursuant to this Agreement, or is independently developed by the recipient under circumstances not involving a breach of this Agreement. (b) Sponsor will not, and will not permit any third party acting on Sponsor's behalf to, access, attempt to access, test or audit ESI's Systems or any other system or network connected to EST's Systems. Without limiting the foregoing, Sponsor will not: access or attempt to access any portion or feature of EST's Systems, by circumventing EST's Systems access control measures, either by hacking, password "mining" or any other means; or probe, scan, audit or test the vulnerability of EST's Systems, nor breach the security or authentication measures of ESI's Systems. ARTICLE V - COMPLIANCE WITH LAW; PRICING BENCHMARKS; FIDUCIARY ACKNOWLEDGEMENTS; FINANCIAL DISCLOSURE 5.1 Compliance with Law: Change in Law. Each party shall be responsible for ensuring its compliance with any laws and regulations applicable to its business, including maintaining any necessary licenses and permits. Sponsor shall be responsible for any governmental or regulatory charges and taxes imposed upon the services provided hereunder, other than taxes based on the net income of ESI. With respect to any Plan that is subject to the provisions of ERISA, the Sponsor or the plan sponsor shall ensure that its activities in regard to such program are in compliance with ERISA, and shall be responsible for disclosing to Members any and all information relating to the Plan and this Agreement as required by law to be disclosed, including any information relating to Plan coverage and eligibility requirements, commissions, rebates, discounts, or provider discounts referred to in Section 5.4 hereof. If there is a new or change in federal or state laws or regulations or the interpretation thereof, or a regulatory, judicial or legal action that, among other things, materially burdens ESI, requires ESI to increase payments or shorten payment times for Covered Drugs to Participating Pharmacies, or materially changes the scope of services hereunder (a "Change in Law "), then there shall be an appropriate modification of the services, reimbursement rates, Administrative Fees and /or Rebates such that the parties are returned to their comparable economic position as of the Effective Date. If the parties cannot agree on a modification or adjusted fee or rates, then either party may terminate the Agreement on thirty (30) days prior written notice to the other. 185275.2 Packet Page -542- 2/28/2012 Item 11.F. 5.2 Pricing Benchmarks. The parties understand there are extra- market industry, legal, government and regulatory activities which may lead to changes relating to, or elimination of, the AWP pricing index that could alter the pricing intent under this Agreement. If the Pricing Source changes the methodology for calculating AWP or replaces AWP, or if, as a result of such change, ESI utilizes another recognized pricing benchmark other than AWP (e.g., to Wholesale Acquisition Cost), then Participating Pharmacy, CuraScript and Mail Service Pharmacy rates, rebates and guarantees, as applicable, will be modified as reasonably and equitably necessary to maintain the pricing intent under this Agreement. ESI shall provide Sponsor with at least ninety (90) days notice of the change (or if such notice is not practicable, as much notice as is reasonable under the circumstances), and written illustration of the financial impact of the pricing source or index change (e.g., specific drug examples). If Sponsor disputes the illustration or the financial impact of the pricing source, the parties agree to cooperate in good faith to resolve such disputes. 5.3 Fiduciary Acknowledgements. ESI offers pharmacy benefit management services, products and programs ( "PBM Products ") for consideration by all clients, including Sponsor. The general parameters of the PBM Products, and the systems that support these products, have been developed by ESI as part of EST's administration of its business as a PBM. The parties agree that they have negotiated the financial terms of this Agreement in an arm's - length fashion. Sponsor acknowledges and agrees that neither it nor the Plan intends for ESI to be a fiduciary (as defined under ERISA or state law) of the Plan, and neither will name ESI or any of EST's wholly -owned subsidiaries or affiliates as a "plan fiduciary." Sponsor further acknowledges and agrees that neither ESI nor any of EST's wholly -owned subsidiaries or affiliates: (a) have any discretionary authority or control respecting management of the Plan's prescription benefit program, or (b) exercise any authority or control respecting management or disposition of the assets of the Plan or Sponsor. Sponsor further acknowledges that all such discretionary authority and control with respect to the management of the Plan and plan assets is retained by Sponsor or the Plan. Upon reasonable notice, ESI will have the right to terminate PBM Services to any Plan (or, if applicable, Members) located in a state requiring a pharmacy benefit manager to be a fiduciary to Sponsor, a Plan, or a Member in any capacity. 5.4 Disclosure of Certain Financial Matters. In addition to the Administrative Fees paid to ESI by Sponsor, if any, ESI and EST's wholly -owned subsidiaries or affiliates derive margin from fees and revenue in one or more of the ways as further described in the Financial Disclosure to ESI PBM Clients set forth in Exhibit D hereto ( "Financial Disclosure "), as updated by ESI from time to time. In negotiating any of the fees and revenues described in the Financial Disclosure or in this Agreement, ESI and EST's wholly -owned subsidiaries and affiliates act on their own behalf, and not for the benefit of or as agents for Sponsor, Members or the Plan. ESI and ESI's wholly -owned subsidiaries and affiliates retain all proprietary rights and beneficial interest in such fees and revenues described in the Financial Disclosure and, accordingly, Sponsor acknowledges that neither it, any Member, nor the Plan, has a right to receive, or possesses any beneficial interest in, any such fees or revenues; provided, that ESI will pay Sponsor amounts equal to the amounts expressly set forth on Exhibit A. Nothing in the Financial Disclosure is intended to supersede any, of the specific financial terms and conditions agreed to under this Agreement. ARTICLE VI - TERM AND TERMINATION; DEFAULT AND REMEDIES 6.1 Term. (a) This Agreement is effective as of the later of January 1, 2012, or the date that is ten (10) business days following EST's execution of this Agreement ( "Effective Date "), and will continue for a period of three (3) years thereafter ( "Initial Term "), and may be terminated earlier or extended in accordance with the terms of Section 6.2 below. Thereafter, this Agreement may be renewed as agreed by the parties in writing for two (2) additional one (1) year periods under the same terms and conditions as set forth herein. (b) Not less than ninety (90) days prior to the end of the Initial Term or any renewal term of this Agreement either party may notify the other party in writing that it desires to terminate this Agreement effective as of the end of the then current term. 1852 ?5.2 Packet Page -543- 2/28/2012 Item 11. F. 6.2 Termination. (a) Without Cause. Following the initial twelve (12) months of this Agreement (but not before), either parry may terminate this Agreement for any reason or for no reason upon ninety (90) days prior written notice of such termination to the other party. (b) Breach or Default. Either party may give the other written notice of a material, substantial and continuing breach of this Agreement. If the breaching party has not cured said breach within thirty (30) days from the date such notice was sent, this Agreement may be terminated with a thirty (30) day written notice at the option of the non - breaching party. If the amount of time commercially reasonable for the breach to be cured is longer than thirty (30) days, this Agreement may not be terminated by the non - breaching party pursuant to this provision until such commercially reasonable period of time has elapsed; provided, however, that in no event will such period exceed sixty (60) days. (c) Non - Payment. Notwithstanding anything to the contrary herein, ESI (and its wholly -owned subsidiaries) may terminate or suspend their performance hereunder and cease providing or authorizing provision of Covered Drugs to Members upon forty -eight (48) hours written notice if Sponsor fails to pay ESI or provide a deposit, if required, in accordance with the terms of this Agreement. ESI attempts collection through written and verbal communications with Sponsor prior to sending the notice described herein. (d) Obligations Upon Termination. Upon notice of termination of this Agreement, the parties will mutually develop a run -off plan providing for: (i) Sponsor notification to Members of the timing of any transition to a successor pharmacy benefit manager at least thirty (30) days prior to the effective date of such termination; (ii) ESI provision of open Mail Service Pharmacy refill files and standard claims data and PA files for transition to the successor pharmacy benefit manager in accordance with then existing industry protocol; and (iii) whether Sponsor elects for ESI to process Participating Pharmacy or Member Submitted Claims for prescriptions filled during the Term but filed with ESI after the effective date of termination ( "Termination Date "). Sponsor will continue to pay ESI in accordance with this Agreement for any Fees for PBM Services provided during the term and any run -off period. ESI will continue filing for Rebates for claims incurred prior to the Termination Date and will pay Sponsor Rebates for such claims in accordance with the Rebate payment schedule set out herein. 6.3 Remedies. (a) Remedies Not Exclusive. A party's right to terminate this Agreement under Article VI will not be exclusive of any other remedies available to the terminating party under this Agreement or otherwise, at law or in equity. (b) Force Maieure. Neither party will lose any rights under this Agreement or be liable in any manner for any delay to perform its obligations under this Agreement that are beyond a party's reasonable control, including, without limitation, any delay or failure due to riots, earthquakes, storms, floods or other extreme weather conditions, fires, acts of terrorism, epidemics, embargoes, war or other outbreak of hostilities, government acts or regulations, the failure or inability of carriers, suppliers, or telecommunications providers to provide services necessary to enable a party to perform its obligations hereunder, or any other reason where failure to perform is beyond the party's reasonable control, and is not caused by the negligence, intentional conduct or misconduct of the defaulting party. This Section 6.3(b) may not be invoked to completely excuse a party's payment obligations hereunder; however, a force majeure event may be grounds for delay of payment for a reasonable period of time. ESI represents that it maintains and continually updates a business continuity plan designed to mitigate any disruption to the services provided by ESI under this Agreement. (c) Limitation of Liability. Except for the indemnification obligations set forth in Section 6.3(d), each party's liability to the other hereunder will in no event exceed the actual proximate fosses or damages caused by breach of this Agreement. In no event will either party or any of their respective affiliates, directors, employees or agents, be liable for any indirect, special, incidental, consequential, exemplary or punitive damages, or any damages for lost profits relating to a relationship with a third party, however caused or arising, whether or not they have been informed of the possibility of their occurrence. 10 185275.2 Packet Page -544- 2/28/2012 Item 11. F. (d) Indemnification (i) In addition to any indemnification obligations set forth in the Business Associate Agreement, ESI will indemnify and hold Sponsor harmless from and against any loss, cost, damage, expense or other liability, including, without limitation, reasonable costs and attorney fees ( "Costs ") incurred in connection with any and all third party claims, suits, investigations or enforcement actions ( "Claims ") which may be asserted against, imposed upon or incurred by Sponsor and arising as a result of (A) ESI's negligent acts or omissions or willful misconduct (including those of the Mail Service Pharmacy and CuraScript), or (B) EST's breach of this Agreement. (ii) Sponsor will indemnify and hold ESI harmless from and against any Costs for Claims which may be asserted against, imposed upon or incurred by ESI and arising as a result of (A) Sponsor's negligent acts or omissions or willful misconduct, benefit design and coverage decisions, or breach of this Agreement, or (B) any improper use Sponsor, an Auditor or Vendor may make of PHI or ESI System access provided to such party. The foregoing indemnification shall not constitute a waiver of sovereign immunity beyond the limits set forth in Section 768.28, Florida Statutes. (iii) As a condition of indemnification, the party seeking indemnification will notify the indemnifying party in writing promptly upon learning of any Claim for which indemnification may be sought hereunder, and will tender the defense of such claim to the indemnifying parry. No party will be obligated to indemnify the other with respect to any claim settled without the written consent of the other. 6.4 Survival. The parties' rights and obligations under the Sections 2.5, Articles III, IV and V; and Sections 6.2(c), 6.3, 6.4, 7.2, 7.3, 7.4 and 7.6 will survive the termination of this Agreement for any reason. ARTICLE VII — MISCELLANEOUS 7.1 Liability Insurance. Each party will maintain such policies of general liability, professional liability and other insurance of the types, including self insurance, and in amounts customarily carried by their respective businesses. Proof of such insurance will be available upon request. ESI agrees, at its sole expense, to maintain during the term of this Agreement or any renewal hereof, commercial general liability insurance, pharmacists professional liability insurance for the Mail Service and CuraScript pharmacies, and managed care liability with limits, excess of a self insured retention, in amounts of not less than $5,000,000 per occurrence and in the aggregate. ESI will provide Sponsor with a "Certificate of Insurance" showing current coverage. ESI does not maintain liability insurance on behalf of any Participating Pharmacy, but does contractually require such pharmacies to maintain a minimum amount of commercial liability insurance or, when deemed acceptable by ESI, to have in place a self- insurance program 7.2 Notice. Any notice or document required or permitted to be delivered pursuant to this Agreement must be in writing and will be deemed to be effective upon mailing and must be either (a) deposited in the United States Mail, postage prepaid, certified mail, return receipt requested, or (b) sent by recognized overnight delivery service, in either case properly addressed to the other party at the address set forth below, or at such other address as such party will specify from time to time by written notice delivered in accordance herewith: Express Scripts, Inc. Attn: President One Express Way St. Louis, Missouri 63121 With copy to Legal Department Fax No. (800) 417 -8163 Collier County Government Attn: Jeff Walker 3301 Tamiani Trail Naples, Florida 34112 11 Packet Page -545- 185275.2 2/28/2012 Item 11. F. 7.3 Independent Parties. No provision of this Agreement is intended to create or will be construed to create any relationship between ESI and Sponsor other than that of independent entities contracting with each other solely for the purpose of effecting the provisions of this Agreement. Neither party, nor any of their respective representatives, will be construed to be the partner, agent, fiduciary, employee, or representative of the other and neither party will have the right to make any representations concerning the duties, obligations or services of the other except.as consistent with the express terms of this Agreement or as otherwise authorized in writing by the party about which such representation is asserted. 7.4 Assignment and Subcontracting. Sponsor may assign this Agreement upon first obtaining EST's written consent, which consent will not be unreasonably withheld following a standard credit review of the proposed assignee. Sponsor acknowledges and agrees that ESI may perform certain services hereunder (e.g., mail service pharmacy and specialty pharmacy services) through one or more ESI subsidiaries or affiliates. ESI is responsible and liable for the performance of its subsidiaries and affiliates in the course of their performance of any such service. To the extent that ESI subcontracts any PBM Service under this Agreement to a third party, ESI is responsible and liable for the performance of any such third party. In addition, ESI may contract with third parties to provide information technology support services and other ancillary services, which services are not PBM Services hereunder, but rather are services that support EST's conduct of its business operations. This Agreement will be binding upon, and inure to the benefit of and be enforceable by, the respective successors and permitted assigns of the parties hereto. 7.5 Integration; Amendments. This Agreement and any Exhibits hereto constitute the entire understanding of the parties hereto and supersedes any prior oral or written communication between the parties with respect to the subject matter hereof. If there is a separate Business Associate Agreement between the parties, such an agreement will be incorporated herein for all applicable purposes. No modification, alteration, or waiver of any term, covenant, or condition of this Agreement will be valid unless in writing and signed by the parties or the agents of the parties who are authorized in writing, except as may be otherwise permitted pursuant to the terms and conditions of this Agreement or any Exhibit hereto. 7.6 Choice of Law. This Agreement will be construed and governed in all respects according to the laws in the State of Florida, without regard to the rules of conflict of laws thereof. 7.7 Waiver. The failure of either party to insist upon the strict observation or performance of this Agreement or to exercise any right or remedy will not be construed as a waiver of any subsequent breach of this Agreement or impair or waive any available right or remedy. 7.8 Third Party Beneficiary Exclusion. This Agreement is not a third party beneficiary contract, nor will this Agreement create any rights on behalf of Members as against ESI. Sponsor and ESI reserve the right to amend, cancel or terminate this Agreement without notice to, or consent of, any Member. 7.9 Authority to Contract. Sponsor hereby represents and warrants that it has obtained due and proper authority to enter into this Agreement through its governing body. 7.10 Open Records Requests. ESI acknowledges that Sponsor, as a government agency, may be subject to applicable freedom of information or open records laws, in particular Chapter 119, Florida Statutes, also known as the Public Records Law. ESI acknowledges that Sponsor must, upon request, disclose such materials as are covered by and not exempted from such laws. Pursuant to Section 4.2 hereof, Sponsor acknowledges that certain information contained herein or subject to this Agreement is proprietary and confidential to ESI and shall be exempt from that Act to the fullest extent permitted by law. Sponsor agrees to give ESI notice and the minimum statutory or regulatory period of time to oppose, request redactions or limitations on any disclosures under a third party freedom of information or open records request pertaining to this Agreement or any proposal related hereto. This provision shall survive termination of the Agreement. 12 185275.2 Packet Page -546- 2/28/2012 Item 111. - set forth. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year below EXPRESS SCRIPTS, INC. COLLIER COUNTY GOVERNMENT By: Printed Name: by BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY By: Title: Printed Name: Chairman Date: ATTEST: Dwight E. Brock, Clerk of Courts By: Printed Name: Attest as to Chairman and signature only APPROVED AS TO FORM AND LEGAL SUFFICIENCY: (4rated Name: Assistant County Attorney Date: 13 Packet Page -547- 1852752 2/28/2012 Item 11. F. EXHIBIT A PHARMACY PROGRAM FEES ESI shall be Sponsor's exclusive provider of PBM Services for Sponsor's Plans offering a prescription benefit. The financial terms set forth in Exhibit A are conditioned on such exclusive arrangement and all other specified conditions expressly incorporated in such exhibits, including, but not limited to the adoption by Sponsor of the specified network, qualifying co- payment structures, Formulary, a minimum of 4,500 Members implemented on the Effective Date of this Agreement, and no Members in (i) a 100% co- payment plan, (ii) consumer driven health plan (iii) Medicare Part D Plan or (iv) Medicaid, (if applicable). In the event one or more of the following occurs (whether between the date of the Cost Proposal and the Effective Date, or during the Term), ESI will have the right, upon notice, to make an equitable adjustment to the rates, guarantees, Administrative Fees and /or Rebates, solely as necessary to return ESI to its contracted economic position as of the effective date of such event: (a) There is a material change in: (i) the conditions or assumptions stated in this Agreement; or (ii) the size, demographics or gender distribution of Sponsor's Membership compared to data provided by Sponsor; (b) Sponsor changes its Formulary, benefit designs, implements OTC plans, clinical or trend programs or otherwise takes an action that has the effect of lowering the amount of Rebates earned by Sponsor; (c) Sponsor elects to use on -site clinics or pharmacies to dispense prescription drugs to Members which materially reduces Rebates and /or the number of Covered Drug claims submitted on -line; (d) Sponsor requests ESI to add a particular Participating Pharmacy in the network, which materially impacts any pricing guarantee; and /or (e) Rebate revenue is materially decreased because Brand Drugs unexpectedly move off - patent to generic status or due to a Change in Law. Exhibit A includes the following: Exhibit A -1 Pharmacy Reimbursement Rates Exhibit A -2 Administrative and Clinical Program Fees Exhibit A -3 Rebates 14 Packet Page -548- 185275.2 2/28/2012 Item 11.F. Exhibit A -1 Pharmacy Reimbursement Rates Sponsor will pay to ESI the amounts set forth below, net of applicable Copayments. Sales or excise tax or other governmental surcharge, if any, will be the responsibility of Sponsor. A Member's Copayment charged for a Covered Drug will be the lesser of the applicable Copayment or the U &C. Participating Pharmacy Reimbursement Rates (Does Not Apply to Specialty Products) Network Minimum 50,000 Participating Pharmacy Network Ingredient Cost - Brand Lesser of AWP -16% or U &C Ingredient Cost - Generic Lesser of AWP -16 %, MRA or U &C Ingredient Cost - Compound Drugs Lesser of U &C or combined AWP plus applicable service fee Brand Dispensing Fee /Rx $1.00 Generic Dispensing Fee /Rx $1.00 Administrative Fee /Rx $0.00 Notwithstanding the preceding, ESI will guarantee an average aggregate annual discount for Generic Drugs, as set forth in the table below. II. Mail Pharmacy Reimbursement Rates (Does Not Apply to Specialty Products). Ingredient Cost - Brand Drugs AWP - 23.25% Ingredient Cost - Generic Drugs AWP -23.25 % or, if lower, MRA Ingredient Cost - Compound Drugs Combined AWP plus applicable service fee Brand Dispensing Fee /Rx Subject to change for changes in defimy rates $0.00 Generic Dispensing Fee1Rx Subject to change for changes in delivery rates $0 $0.00 Administrative Fee /Rx $0.00 Minimum Rate/ Rx $8.99 Notwithstanding the preceding, ESI will guarantee an average aggregate annual discount for Generic Drugs, as set forth in the table below. III. Pricing Guarantees Ingredient Cost Guarantee. ESI will guarantee an average aggregate annual discount as reflected below on Sponsor utilization to be calculated as follows: [1- (total discounted AWP ingredient cost (excluding dispensing fees and claims with ancillary charges, and prior to application of Copayments) of applicable Prescription Drug Claims for the annual period divided by total undiscounted AWP ingredient cost (both amounts will be calculated as of the date of adjudication) for the annual period)]. Discounted ingredient cost will be the lesser of MRA, U &C or AWP discount adjudication methodology. Type of Participating Pharmacy Mail Service Pharmacy Claims Excluded Guarantee 2012: AWP - 68.00% 2012: AWP - 71.00% OTC, Compounds, Products subject to Generic 2013: AWP - 69.00% 2013: AWP - 72.00% patent actions, Single Source Generic 2014: AWP - 70.00% 2014: AWP - 73.00% Drugs and Specialty Products 15 185275.2 Packet Page -549- 2/28/2012 Item 11. F. Guarantees will be measured and reconciled on an annual basis within 90 days of the end of each contract year. The above guarantees are annual guarantees - if this Agreement is terminated prior to the completion of the then current contract year (hereinafter, a "Partial Contract Year"), then the above guarantees will not apply for such Partial Contract Year. To the extent Sponsor changes its benefit design or Formulary during the term of the Agreement, the guarantee will be equitably adjusted if there is a material impact on the discount achieved. Subject to the remaining terms of this Agreement, ESI will pay the difference of Sponsor's net cost for any shortfall between the actual result and the guaranteed result. IV. Specialty Products (a) Exclusive Care. CuraScript is the exclusive provider of Specialty Products for the reimbursement rates shown on the Exclusive CuraScript Specialty Product List. Any Specialty Product dispensed at a Participating Pharmacy (for example, limited distribution products not then available through CuraScript or overrides) will be reimbursed at the standard Participating Pharmacy Specialty Product rates shown below. Upon CuraScript acquisition of limited distribution products, Members will obtain prescriptions through CuraScript. (b) Open Care. Specialty Products shall be available through CuraScript and at Participating Pharmacies for the Participating Pharmacy Specialty Product reimbursement rates. (b) Pricing for ASES is as follows: (i) For Specialty Products needing an additional charge to cover costs of all supplies, equipment (e.g., pumps), nursing and clinical monitoring required to administer the Specialty Products, the following standard per diem and nursing fee rates shall apply. Exceptions to the standard per diem and nursing rates are set forth in (ii), below, which list may be updated from time to time by ESI. Pricing for home infusion supplies and services provided at Participating Pharmacies (for example, limited distribution products not then available through CuraScript or overrides) will be pass- through and based on the provider's rates. Ingredient Cost Dispensing Fee Exclusive CuraScript See Exclusive Specialty Product List $0.00 Standard Nursing Fee/ First 2 Hours Lesser of AWP discount or MRA $65/day Open CuraScript Open Specialty Product List $0.00 Lesser of AWP discount or MRA Participating Pharmacy Participating Pharmacy Specialty Product List $2.00 Specialty Products Lesser of AWP discount, U &C or MRA (b) Pricing for ASES is as follows: (i) For Specialty Products needing an additional charge to cover costs of all supplies, equipment (e.g., pumps), nursing and clinical monitoring required to administer the Specialty Products, the following standard per diem and nursing fee rates shall apply. Exceptions to the standard per diem and nursing rates are set forth in (ii), below, which list may be updated from time to time by ESI. Pricing for home infusion supplies and services provided at Participating Pharmacies (for example, limited distribution products not then available through CuraScript or overrides) will be pass- through and based on the provider's rates. (ii) Additional Exceptions to AWP Discount Rates and Standard Per Diem & Nursing Fees Brand Name AWP Discount Standard Per Diem $65 /dose 1.0% $65/day Standard Nursing Fee/ First 2 Hours $150 $65/day Standard Nursing Hour $75 (ii) Additional Exceptions to AWP Discount Rates and Standard Per Diem & Nursing Fees Brand Name AWP Discount Per Diem EPOPROSTENOL 1.0% $65/day REMODULIN 5.0% $65/day The TYVASO AWP discount includes Phone Support Nursing, Supplies, Pump, first two training visits, and Coordination of In- Person Nursing. In -home nursing that is requested /needed beyond the first two training visits will be charged at a rate of $150 for the first two hours and $75 for every hour after. (c) Specialty Products will be excluded from any price guarantees set forth in the Agreement. In no event will the Mail Service Pharmacy or Participating Pharmacy pricing terms specified in the Agreement, including, but not limited to, the annual average ingredient cost discount guarantees, apply to Specialty Products 16 185275.2 Packet Page -550- 2/28/2012 Item 11. F. dispensed through CuraScript. ESI will guarantee an effective discount of AWP -12% for Specialty Products filled through CuraScript. ESI shall reconcile the guarantee within ninety (90) days after each contract year and will, subject to the following, credit Sponsor for any deficits in any such guarantee within forty -five (45) days following such reconciliation period. ESI will pay Sponsor the difference of Sponsors net cost for any shortfall between the actual result and this guarantee. (d) Unless otherwise set forth in an agreement directly between CuraScript and Sponsor, if a Specialty Product dispensed or ASES provided by CuraScript is billed to Sponsor directly by CuraScript instead of being processed through ESI, Sponsor agrees to timely pay CuraScript for such claim pursuant to the rates above and within thirty (30) days of Sponsor's, or its designee's, receipt of such electronic or paper claim from CuraScript. CuraScript shall have 360 days from the date of service to submit such electronic or paper claim. (e) The list of Specialty Products and their corresponding rates set forth below are subject to addition, deletion, or modification by ESI from time to time. 8 -MOP 11.500/0 11.500/0 13.50 %. ABRAXANF11, 11'SDx"Jo r 11z SAa 13.'0°1v ACTEMRA 10.500/0 10.50% 12.50% ACTHAR H P, ' ' 1,.50 %` =' 11.50% ACT IMMUNE 11.50% 11.50% 13.50% ADAGEN 11.50 °rc LIMITED LIMITED DISTRIBUTION DISTRIBUTION ADCIRCA 11.50% 11.50% 13.50% ADRIAMYCI;V 11:50 °1a 1i:50 °l0 13:SQ�q ADRUCIL 11.50% 11.50% 13.50% 1.I�3°'si ..., . 2�.4JQ °!n 23rt��" ADVATE H 11.50% 22.00% 23.00% ADUA �: �� n vim, e �° r: S, .Ft < i2 ka x, a�'... -�� ADVATE M 11.50% 22.00% 23.00% AD1YlTE. SH :SO °7o 22:00° /o 23w0;pnlo ADVATE UH 11.50% 22.00% 23.00% A'FI'NITQR 11:Jfl %; 11.JrI�p /O 1:5Op /a ALDURAZYME 11,500/0 11.50% 13.50% AL`F1=1C11 111 `' 11,5.I °I° 1X 5DA14 13;50°10;' "' ALIMTA 11.50% 11.500/0 13.50% 77 7 7. 11;50/0 „1 .5i]% i3:50P1o• .. ALPHANATE 11.25% 21.50% 22.75% AMEVIVE 11.50% 11.500/0 13.50% AMII OSTIistE `, ........ ..; 11:5 ©°Jo.. " ,', • 7I AMPYRA 11.50% 11.50% LIMITED ARALAST I 11.500/a ARAN ES P 11.50% 17 Packet Page -551- 11.50% 11.50% 13.50% 13,, LIMITED TRIBUTION 185275.2 2/28/2012 Item 11. F. AREDIA 11.50% 11.50% 13.50% ARi�ftA 1E r 11.5.64 �` x h,s.. , ARRANON 11.50% 11.50°/0 13.50% ARZERR4 11'.5(1 °lo ", 11:509/ ATGAM 11.50% 11.50% 13.50% AV.ASTIN - 11.50% AVONEX 11.500/0 11.50% 12.00% BEBO.t=",VH IMMUNO 10.75 %i0.7% 12.004 BENEFIX 11.000/0 11.00% LIMITED DIST. PRODUCT 5.25% ' s i �`,:BERYi1iFaa" z`� �_a.4 BETASERON 11.50% 11.50% LIMITED DISTRIBUTION d$ BEXXAR o 11'.50 /ou�k LIMITED'v i' a 4ZR " DISTRIBUTION .• .3 . ., u BICNU 11.500/0 11.50% 13.500/c .,.,,BLENOXANE' 11:50% 11.50 ° /0 13.540/0 BLEOMYCIN SULFATE 11.500/0 11.50% 11.50% BQNIVA 9.50% 9.509 l�,�x 11.50% BOTOX 11.50% 11.50% 11.500/o €. BOTOX Ct�?'S3ETIC . 11.50% 11.50 °la 13.50 °l0 BRAVELLE 11.500/0 11.50% 13.50% BUSULFEX ? } 11.50% 11.50 %:. -' " 13.509/o CAMPATH 11.50% 11.50°/0 13.500/c CAMPTOSAR. 11.50% 11.509% 13.50% CARBOPLATIN 11.50% 11.50% 13.50% CARIMUNE NF NANOFILTERED 11.50 °!0 k 'X SO% LIMITED "R � .,,. �. DISTf iBUTI�TN CAYSTON 11.50% LIMITED 11.500/0 DISTRIBUTION CELLCEPT 11.50% �, 11.500Jo LIMIT r DISTRIJM TjW, I CEPROTIN 11.251% LIMITED 13.50% DISTRIBUTION CEREDASE" 11:500/o 11.50% 13.50% ....: _... . CEREZYME 11.500/0 11.500/0 13.50°/0 v " CERUBTDINE 11.50 % 11.50% 13::50 °Jo CETROTIDE 11.50% 11,50% Limited Distribution M HEN0DAL , 10.2511/0 Limited N 13.50 ° /qa v° kll R Distributionu,,;; CHORIONIC GONADOTROPIN 1 1'_.50% 11.50% 11.50°/0 CIMZIA 11.500/o 11.50% $:250/o CINRYZE 6.250/c 6.25% ! 3.50% CISPLATIN 11.50% "fir 11.50 °!0 13.50 CLADRIBINE 11.50% 11.500/0 13.50°/0 �t COPAXONE 11500/0 �', < 11.50% `a 13.500%,7q COPEGUS 11.50% 11.50 9!0 13.50% COSMEGEN � 1.1.50 0!0 11.50% 13..50% CYCLOPHOSPHAMIDE 11.500/0 11.50% 13.50% CYCLOSPORINE 11.50% 13.500,' LIMITED �- DISTRIBUTION 18 185275.2 Packet Page -552- ❑i 2/28/2012 Item 11. F. CYSTAGON Participating Pharmacies 11,50% Open LIMITED DISTRIBUTION Exclusive 13.50% ..ci£ kPaY A, 4 CYTOGAM 11.50% 11.50% 13.50% ff LL ,7, 4 "i . y 3:50% DACARBAZINE 11.500/0 11.50% 13,50% DACOGEN 11.5011/0 : 11.50% 13:50% DAUNORUBICIN HCL 11.50% 11.50% 13.50% 11.50% s" 11.50% 13:50% a 3 DDAVP 11.50% 11.50% 13.50% 11:50% DEPOCYT 11,50% 11.50% 13.50% DESFERAL 11:`50 °l0 11.50°!0 13.500/b DESFERAL MESYLATE 11.50% 1 11.500/0 13.50% DESMPPRESSIN ACNE 1'1.SQ% 11.50 ° %a DEXRAZOXANE 11.500/0 11.50% 13.500/c 50% Y1v✓a 13.50% DOXORUBICIN HCL 11.50% 11.50% 13.50% DTI C -DO'ME r ,.r. _ 11:Q °I° $ X , 11,50% DYSPORT 11.500/0 11.50 0k 13.50% ELAPRASE "` k #•,' w :1150% 11.5bb /o 13.50°10 ELIGARD 11.50% 11.500% 13.50% 11.50% 13:50% u ELLENCE 11.50% 11.500/c 13.509/o ELOXATTN i:" ,,.�.., a " � �. �s,A 11.5.0% 13.50% ELSPAR 11.500/0 11.50% 13.50% e. ENS R o 11.50 /0 0 ENOXAPARIN SODIUM 16,50% 16.50% 13.50% EPIRUB CII CL" 11 -50% EPOGEN 11.50% 11.500/0 13.50% ODIUMM,`." ��'.' ���tc���� .'�- '',1';�i�o�.''�,.. ERBITUX 11.50% 11.50% 13.50% ETHYOL 115005 11.50% :' 1150%7U ETOPOPHOS 11.500/0 11.500/0 11.50% 55 . ETOPQ� `t 11.500/0 11.500/0 12;50% EUFLEXXA 11.50% 11.50% 13.50 %0 EX3A& 4x00/0 11.5011/0 1.3.50% EXTAVIA 11.50% 11.500/. 13.50% ABRAZYME'' 11.50% 11.5011/0 23.25 ✓0 FASLODEX 11.50% 11.500/0 23.25% FEIBA NF 11:75% 22 OOot 1.1Q% FEIBA VH IMMUNO 11.750/c 22.00% 13.50% FIRMAGON 11.50 ° /0 1 "x 5 .! a„ .. 13.5,0 ;g FLEBOGAMMA 11.50% 11.50% LIMITED DISTRIBUTION FLEBOGAMMA.DIF. 50 °l4 wF� >„ ,13.50% FLOLAN 0.00% LIMITED DISTRIBUTION 13.50% FLOXURIDTNE 17:50% 13:50°/0 f, FLUDARA 11.50% 11.50% 13.50% 19 Packet Page -553- 185275.2 2/28/2012 Item 11.r=. Participatinq CuraScript CuraScriot Pharmacies Open FLUDARABINE FHOSP3A` *x�_,, �_ . t ,,....Q .' 11.50% Exclusive 13.50% FLUOROURACIL 11.50% 11.50% LIMITED DISTRIBUTION FOLLISTIM AQ 17 50 °iuF ? 11.50ol�r � ? 509% FOLOTYN LIMITED LIMITED DISTRIBUTION DISTRIBUTION 13.50% FORTED 9,50% 9.5fl% FRAGMIN 11.500/0 11.50% 13.50% FUDR,w. 11.50 ° /n 11.50 °l05is FUSILEV 11.500/C 11.500/0 13.50% 11.50% f GAMASTAN S -D 11.50% 11.500/o 13.50 %tt GAMMAGARD LIQUID 11.,50 °Jo GAMMAGARD S -D 11.50% 11.50°!0 13.50% GAMMAPLEX' o wr 11'.0010 ° 1.001° o z, GAMUNEX 11.500/0 11.500/0 13.50% GANIRELIX ACETATE.. „11':5fl °!n 1:50910 13:50% GEMZAR 11.500/0 11.50% 13.50% GENOTROPIN 11.50 %> GEREF DIAGNOSTIC 11,50% 11.50% 13.50% 11.500/0 GLASSIA 11.500/0 11.500/c 13.50% GLEEVEC 11.5fl% ; , 11'..50% 13.50°!0 GONAL -F 11.500/0 11.500/0 22.75% GONAL-F RFF 11.50% 11.5011/0.11 22J5 0%' tYs HELIXATE FS @ ` "'1 HEMOFIL'M j 11.25°/0 11.25% 21.75°/0 21-50% 13.50% 13.50/o �s HEPAGAM B 11.500/0 11.500/0 21000/o .:.., HERCEPTIN 11:50 °!0 11:50% 13.50 °!0 HUMATE -P 11.500/0 22.000/c 13.50% - 'N11±fF�DPE ' 11.50910 11.500/b 11.,50°10`; -. HUMIRA 11.50% 11.500/0 13.500/b HTALGAN 11:50nIo 11.509 /0. HYCAMTIN 11.50°/0 11.500/0 13.50°/0 hl � EP B =D 1i 50% 11.50 °7° 13.50% p.. HYPERRAB S -D 11.50% 11.50% 13.50% HYPERRHO S -D 11.50% 11.50% 13:509/o Mi IDAMYCIN PFS ;1.50°/° 11.500/0 13.50°!0 IDARI?1B TN HCL 1150% 11.50I? %o..X , s ;. s ! 3 500% IFEX 11.500/0 11.50% 1 13.50% IFEX- MESNEX IFOSFAMIDE ? .50 °io 11.50% 12.50% IFOSFAMIDE -MESNA j 11.50 ° /0 11 5 :¢Y: 13:509% ILARIS 10,509/o 10.500/0 13.50°/0 IMMUNE GLOBULIN 11.500/a 11.50% 0.000/0 IMOGAM RABIES -HT 11.50% 11.50°!0 13.50% IMPLANON 0.00% 0.00,% 13.50°/0 g INCRELEX 1-1,501)/o 11.50% 13.50% INFERGEN 1I.50 °!0 11.50 °!0 13.50 %: INNOH EP 1 -1.500/0 11.500/0 13.50% 20 185275.2 Packet Page -554- 2/28/2012 Item 11.F. 21 185275.2 Packet Page -555- Participating Pharmacies x Open a. >a�sr^. r,:• Exclusive °^e 3tt yr IPRIVASK 11.50% 11.50% 13.50% IRINOTECAN HCL 11.50% 11.50% 13.50% IXEMPRA n € V »�i;.._ � c ham. JEVTANA 11.50% 11.50% LIMITED DISTRIBUTION ,} p.'ue .. , . ;'„.' &" z yt KALBTTOG ca" �Z.A,,. -cz. 7 5 v�� o ,13.sa v - /o KEPIVANCE 11.50% LIMITED DISTRIBUTION 23.000/c KINERET 11:.50% 23.00% KOATE -DVI 11.50% 22.00% 13.50% KOGENATE FS 11.50% 2 dd% 13:50 °!0 KUVAN 11.50 0/0 11.501)/o 13.50% i '3 I5 11.500% 11.50 ° /a 13.50 LEUCOVORIN CALCIUM 11.500/c 11.500/o 13.50% LEUKINE 11.50 %F. .._ 11.50% LEUPROLIDE ACETATE 11.50% 11.50% 13.50% LEUSAi81���9 '- ] 1.501�1m,t'f. 1afJ%o 13fl°7o�' LOVENOX 11.50% 11.50% 13.50% L[ENTISr :• 1.1.';5,0% LUMIZYME 1.50% 11.500/0 11.50% LUPRON 11.500/0 LUPRON DEPOT 11.50% 11.50% 13.50% " n 0PRON D EPOT -FE 1.50% 3 50 1 l ° M. LUVERIS 11.50% 11.50% 13.50% MACUGEN.; 11.50 °!0 , f;: 11•.SA °110 13 5 10. MELPHALAN HCL 11.500/0 11.50% 1:3.50% MENOPUR 11.500/0 �,, <.,, 11.50% 13.500/a MESNA 11.50% 11.500/0 11.50% . MESNEX' 115Q °,° 1150% 13.50% METHOTREXATE 11.50°/ 11.50% I 13.50% 11,50% 11,50% LIMITED .. DISTRIBUTION MICRHOGAM PLUS 11,500/0 11.500/0 13.50% ��MIRENA 11.50% „d.,.,DISTRIBUTIONs`:,:,_ LIMITED 13:5fl MITOMYCIN 11.50 ° /o 11.50% 22.50% XA . M , ._ TO NTRONE "HCL 11..50 0 /o 1150 °l0 23.Ot3o� MONARC -M 11.00% 21.501)/o 23.00% A MONOCLATE -P 11=75 ° /q � vE 22.00 °X10 13.50% a *' MONONINE 11.50% 22.00% 13.509/o MQZOBIL MUSTARGEN 11.50% 11.50% 13.50% MUTAMYCIN ' 11.:5 0% 11.50% 0 MYLOTARG 11.50% 11.50% 13.50% Ke r < MYtJBi OC 11.50% 11.50% 1:50 ° /0 MYOZYME 11.500/0 11.50% 13.50% NABIB 11.50% 11.50% 13.50°!° NAGLAZYME 11.500/10 11.50% 13.50°!0 21 185275.2 Packet Page -555- 2/28/2012 Item 11. F. NEULASTA 11.50% 1150% 13.500/b .NEUMEGA NEUPOGEN I 11.50% 11.50% 13.500/c NEXAI/AR { 1'1.500% 1.50. �x,z 13'.50 °10 NIPENT 11.50% 11.50% 13.50% NORRqtOPIN 1150% 11.50% 13:50% NORDITROPIN FLEXPRO 11.500/0 11.50%0 13.50% ".rIVORDITROPIN NORDIFLEX. 1.1.50% NOVANTRONE 1;.50% 11.50% 22.75% NOVAREL 11:50% �.,_� a u NOVOSEVEN 11.25% 21.75'/b 13.50% N0 NSRT 11.50% 22.000% NPLATE 11.500/o 11.500/0 13.50% NR o- OPIN 11,50% " 11,50% 13'_50% r NUTROPIN AQ 11.500% 11.50% 13.50% OCTAGAM 11:500/c 11.50% _13.50% OCTREOTIDE ACETATE 11.50% 11.500/c 13.50% OFORTA 1' 11.50 % 11.50% OMNITROPE _1.50% 11.50% 11.50% ONCASPAR 11.50°/0" 11,50°/0 13:5D010 ONSOLIS 9.50% 9.50% 13.50% ONTAK' 11:50°/0 X1.50% 1351 4i ONXOL j 11.50% 11.50% LIMITED DISTRIBUTION ORENCIA 11.50% 11.50% I ke $. DISTRIBUTION +' ORFADIN 11.50% LIMITED DISTRIBUTION 11.50% a ORTHOCLONE OKT 3 11:50% LIMITED DISTRIBUTION., 135010 ORTHOVISC j 11.500/0 11.50% 13.50% 11.50% 11.509/0..,`, 13:50% PACLITAXEL 11.50% j 11.50% 13.50 °!0 PAMIDRONATW, DIUM 11.50% 11.50 0/0' 13,50% PANRETIN 11.50% 11.50°/0 13.50% PARAP,ikIN 11.50% 11.50% 13.500% M PEGASYS 11.50% I 11.50% 13.50% PEGINTRON I 11.50% 11.50% 1�;5k1°lo PEGINTRON REDIPEN 1:.50% 11.50% 13.50% PHOTO,* ,N 11.50°/0 11.50% PLENAXIS 11.50% 11.500/0 I 13.50% P.REGNYL 11:50 °l0 11.50 %50 °l0 PRIALT 11.500/0 11.50% 13.50% PRIVIGEN 11.50°/0 11.50°/0 23.00% PROCRIT 11.50% 11.50% 13.509/. PROFILNINE'SD 11.50% 22:00% 13.50% PROGESTERONE 11.50% 11.50% 11.500/0 PROGESTERONE IN OIL 11.50% 11.50 °l° LIMITED DISTRIBUTION . PROGRAF --1.50-/o 11.50% 13.50% 2� ]85275.2 Packet Page -556- C11 2/28/2012 Item 11.F. PROLASTIN Participating Pharmacies 115 °!a� Open Exclusive `e�� PROLEUKIN 11.50% 11.50% 13.50% PROs z .,.M.E . . PROMACTA 11.50% 11.50 %!. 13.50% i PULMOZYME 11.50% 11.500/0 13.50% RAPTIVA REBETOL 11.500/0 11.500/0 11.50% b BIF RECLAST 9.50% 9.50% 12.75% qK RECDINBINATE� 1'�p,M �•, 22.5?l0` REFACTO 11.75% 11.75% 13.50% REMICADE 11.50% 11.500/0 13.50% ;zEMODULI) 0.00% "r .OIJ °!n REPRONEX 11.50% 11.50% 1350% REVATIO 11.50% 11.50% 13.50% REVLMI��%.�a + ., r . 11 o RHOGAM 11.50% 11.50% 13.50% RHOGAM PLUS 115'�a°lo 11 50 °l0 3000a „��', RHOPHYLAC 11:50% 11.500/0 30.00% o OJo ; : o 22.00 /0 54a RIBASPHERE 11.50% 22.00% 54.25% :` RIBATAB 49.17% 13.50% RIBAVIRIN 11.50% 49.25% 13.500/o RILUTEK '` 11.50% - 11.500/0 13.50% RITUXAN 11.50% 11.500/0 12.50% C3FEi3I11 -A, 11.50% 11.50% 13.:50% SABRIL 10.50% 10.500/0 11.50% k 9MZEN 11.50% 11.5I).?1a SANDIMMUNE 11,50% 11.50% 13.50% SANDOSTATI'N;f 1.1.50% i1or aa' <:! 13;50% SANDOSTATIN LAP, 1-1.50% 11.50% 13.50% SEROSTIM n 11`.50°/0 11 a/0 13.50?/0 SIMPONI 1.500io 11.50% 13.50% SIMULECT :: 11.50 0/0 11.501 %n 13.50% SOURIS 11.50% 11.50% 12.50% SOMATULTNE DEPOT 1 11.50 010 13:50% 4 SOMAVERT 6.25% 11.50% 13.50% SPRY;CEL ._ Oa /o 11.500/0 11.50% STELARA 11.50% ! 11.50% 13.50% SUCRAID' 9.500/b 9.50% afffit SUPARTZ 11.500/0 11.50% 13.50% SUPQR'ELTN LA W. '.11:50% xiIU.%lr _> _5Q% SUTENT 11.50% 11.500/0 11.50% SYNAGIS 11:50% 23 185275.2 Packet Page -557- 2/28/2012 Item 11. F. Participating Pharmacies Open Exclusive SYNVISC 1 11.50% 11.50% 13.50% SYNVISC -ONE 11..50 11/0 11.50% 13;50% '+ TARABINE PFS 11.50% 11.50%0 13.50% �r�t.� TARGEVA 11.50 %° TASIGNA 11.50% 11.50% 13.50% TAXOi 11:50 °10 11.50 %h�b TAXOTERE 11.500/0 11.50% 13.50% TEMODAR 11.50 9!0 115 °lo fi � s TEV- TROPIN 11.50% 11.50% 13.50% ': :FHALOM Oi l': 11.50% J . THERACYS 11.50% 11.50% 13.50% Is a ` M� , WIF, THYMOGLOBULIN 11.50% 11.500/0 13.50% TICE BCG 11.50% 11.50% 13.509/o TOBI TOPOSAR j 11.50% 11.50% 13.50% TO'RISEL ;y;, 11.50 °Jo 11.50% 13:50°!0 TOTECT 11,500/c 11.50% 13.50% TRACLEER 11:50% 11..50,,% 13s5E!'n TREANDA 11.50% 1 11.50% 13.50% TRELSTAR DEPOT, TRELSTAR LA 11.50% 11.50% 13.509'0 TRISENOX 11:50% 11.500/b TYKERB 11.50% 11.50% 0.00% 11::50% 11:50 0/0 13:50% x z= TYVASO 0.00 %. 0.000/0 j 13.50% 11.50 °l0 11.50QJo 13.5(3, °l0 VANTAS 11.50% 11.50% 13.50% VARICELLA- ZOSPER IMM GLOBULIN 11:5YI x € -: 11.50°10 13.506/o VECTIBIX 11.500/c 11.500/0 LIMITED DISTRIBUTION VELCADE 1:1.500/0 11:50% 13:50 ° /° ' VENTAVIS 0.000/0 LIMITED DISTRIBUTION 13.50% VIADUR 11..50% 11,50 °la VIDAZA 11.50% 11.50% 13.50% VIN&ASTINE SULFATE 11.500/0 11.500/0 VINCRISTINE SULFATE 11.50% 11.50% 13.50% VINO;RELEMETARTRATE . 11`50 °l0 11.50% 13:50°!0 VISUDYNE 11.50% 11.50% 13.50% VIVAGLOBIN 11.50% k 11 5i°ya . X0% VIVITROL 11.50% 11.50% 13.50% VOTRIENT 11.50% 11.50% 13.50% VPRIV 11.50% 11.50% 13.50% f`r VUMON T11.. 0 ° /a 11.50% 13.5010 WINRHO SDF 0% 11.50% 12.50% XELODA 11.50% 3:SO °lo 13.50% XENAZINE 11.50% 11.50% 13.50% XEOMIN 10.50% 10.50% 13.,50% 24 185275.2 Packet Page -558- El �j IM 2/28/2012 Item 11.F. XIAFLEX 11.500/b 11.50% 23.000/a INFLUENZA 11:50% Ingredient Cost Participating Pharmacy Ingredient XYNTHA 11.50% 21.75% 13.50% c Xl'REM 6.259/b 77 6.25-1. Dispensing Fee Participating Pharmacy Dispensing Participating Pharmacy Dispensing Fee as set forth in the Agreement Fee as set forth in the Agreement LIMITED ZANOSAR 11.50% 11.50% DISTRIBUTION . ZAIIESCA 9.5010 pharmacist to inject the (capped at $15.50 per vaccine claim) (capped at $20 per vaccine claim) vaccine LIMITED LIMITED ZEMAIRA 10.000/a DISTRIBUTION DISTRIBUTION ZENAPAX '. 11.50% - ZEVALIN 11.50% LIMITED 13.50% DISTRIBUTION ZINECARD ''` .. 1150 ° /0 135D% ZOLADEX 11.50% 11.50% 13.50% r .,, . ZOLINZA "; " ?, ; .;'1 /o f ,, . 1 5t7 is x..;13.50 /a ZOMETA 11.50% 11.50% ... ZORBTIVE 8 -MOP 11.50% 11.50% 13.500/c ABRAXANE ACTEMRA 10.50% 10.50% 12.50% ACTHAR H. P:w -, ACTIMMUNE 11.50% 11.50% 13.50% ADAGEN ADCIRCA 11.50% 11.50% 13.50% ADRIAMYCIN:, ADRUCIL 11.50% 11.50% 13.50% ADVATE 11:509% 22.009/b 23=00% ADVATE H 11.50% 22.00% 23.00% :ADVATE L 11.50% 22.Q0 %a ADVATE M 11.500/10 22.00% 23.00% ADVATE SH 11.50% Z.2 lid 23.00% ADVATE UH 11.50% 22.00% 23.00% V. Influenza and Other Vaccinations Vaccinations shall adjudicate at the lower of: (a) 25 Packet Page -559- 185275.2 Participating Pharmacy Participating Pharmacy INFLUENZA OTHER VACCINES Ingredient Cost Participating Pharmacy Ingredient Participating Pharmacy, Ingredient Cost as set forth in the Agreement Cost as set forth in the Agreement Dispensing Fee Participating Pharmacy Dispensing Participating Pharmacy Dispensing Fee as set forth in the Agreement Fee as set forth in the Agreement Professional Service Fee (PSF); cost for Pass - through Pass - through pharmacist to inject the (capped at $15.50 per vaccine claim) (capped at $20 per vaccine claim) vaccine Vaccine Program $2.50 $2.50 25 Packet Page -559- 185275.2 2/28/2012 Item 111. Administrative Fee * I per vaccine claim per vaccine claim * The Vaccine Program Administrative Fee will be manually billed to Sponsor on a monthly basis or as otherwise agreed between ESI and Sponsor. This Vaccine Program Administrative Fee is in addition to any per Prescription Drug Claim administrative fee set forth in the Agreement. or (b) the combined ingredient cost, dispensing fee (if any) and professional service fee (if any) that the Participating Pharmacy generally charges an individual paying cash, without coverage for prescription drug benefits. Coverage is subject to Plan provisions. No vaccine claims will be included in any guarantees set forth in the Agreement and /or amendments thereto. 26 185275.2 Packet Page -560- 2/28/2012 Item 11. F. Exhibit A -2 Administrative Services and Clinical Program Fees Administrative Services PBM Services - No Additional Fee + Customer service for Members + Electronic claims processing + Electronic /on -line eligibility submission + Plan seta + Standard coordination of benefits (COB) reject for primary carrier + Software training for access to our on -line system(s) + FSA eligibility feeds Network Pharmacy Services + Pharmacy help desk + Pharmacy reimbursement + Pharmacy network management + Network development upon request Home Delivery Services + Benefit education + Prescription delivery – standard Reporting Services + Web -based client reporting – produced by Sponsor + Annual Strategic Account Plan report + Ad -hoc desktop parametric reports + Billing reports + Claims detail extract file electronic NCPDP format + Inquiry access to claims processing system + Load 12 months claims history for clinical reports and reporting Website Services + Express- Scripts.com for Sponsor — access to reporting tools, eligibility update capability, contact directory, sales and marketing information, and benefit and enrollment support secured through Risk Base Authentication + Express PreviewsM enrollment option — available during open enrollment to enable members to evaluate prescription benefit plan options + Express- Scripts.com for Members — access to benefit, drug, health and wellness information; prescription ordering capability; and customer service Implementation Package and Member Communications + New Member packets (includes two standard resin ID cards) + Member replacement cards printed via web + implementation support + Clinical appeals + Non - clinical appeals Clinical + Concurrent Drug Utilization Review (DUR) + Prior Authorization – Administrative • Non - clinical Prior Authorization • Lost/stolen overrides • Vacation supplies + + + + Emerging Therapeutics Prior Authorization – Clinical Base List Blood Glucose Monitoring Program Call4Generics 27 185275.2 Packet Page -561- 2/28/2012 Item 111. PBM Services Fees ♦ Manual/hardcopy eligibility submission $10.00 /update (includes initial entry) ♦ Member - submitted paper claims processing fee $2.50 /claim ♦ Medicaid subrogation claims fee $2.50 /claim Network Pharmacy Services ♦ Pharmacy Audit Compliance 20% of audit recoveries ♦ Program Integrity (Fraud, Waste and Abuse — includes quarterly reporting) - > 30,000 lives $0.03 /claim - 10,000 — 30,000 lives $0.04 /claim - < 10,000 lives $0:05 /claim - If mixed lives with Medicare Part D $0.02/claim Re orting Services ♦ Web -based client reporting — produced by $100 /report ESI ♦ Custom ad -hoc reporting $150/hour, with a minimum of $500 Replacement Member Communication Packets ♦ Member requested replacement packets $1.50 + postage per packet ♦ Sponsor requested re-carding $1.50 + postage per packet Appeals by MCMC ♦ Clinical appeals $350 /review ♦ Non - clinical appeals $160 /review ♦ External review for non- grandfathered plans $800 /review * Plans subject to state law (non -ERISA plans) will be charged a retainer fee of $1,000 per month for appeals handled by MCMC Medicare Part D ♦ Part D subsidy enhanced service (ESI sends reports $1.12 PMPM for Medicare - qualified Members with a to CMS on behalf of Sponsor) minimum annual fee of $7,500 • Notice of Creditable Coverage $1.35/letter + postage ♦ Part D Subsidy standard service (ESI sends reports $0.62 PMPM for Medicare - qualified Members with a to Sponsor) minimum annual fee of $5,000 • Notice of Creditable Coverage $1.35 /letter + postage ♦ Using Outside Cost ReporterNendor (ESI provide $0.42 PMPM for Medicare- qualified Members with a final rebate figures) minimum annual fee of $1,500 ♦ Medicare Part D Fraud, Waste and Abuse Program $0.05 /claim — includes quarterly reporting and Audit Compliance Medicare Part B ♦ Part B Services (Participating Pharmacy and Mail $0.42 PMPM for Medicare qualified Members Benefit II. Selected Clinical/Trend Programs. ESI offers a comprehensive list of trend, safety, care and disease management programs, a limited number of which are identified below, and which may change or be discontinued from time to time. ESI also offers savings guarantees under certain conditions. Information concerning such programs, guarantees and fees, if applicable, is available from the ESI Account Team. 28 tF:iiU04 Packet Page -562- 2/28/2012 Item 11. F. Reduce Prescription Waste Fees • Drug Quantity Management * $0.05 PMPM • Prior Authorization – Base List* No additional fee • Prior Authorization —Clinical Supplemental List* $0.05 PMPM • Prior Authorization – Pharmacogenomics List* $0.01 PMPM • Prior Authorization – Proactive PA* $0.02 PMPM • Prior Authorization – Specialty List* $0.06 PMPM($0.03 PMPM if implemented with the Supplemental List) • Prior Authorization — Other Clinical Overrides (e.g. non- $35 /request standard Prior Authorization medications, medical exceptions) $45 /physician review • Step Therapy — Individual modules and packages available Pricing varies by module • More than 50 modules available. The most utilized include: Leukotrienes, Cox -2, other antidepressants, SSRI, Hypnotics, ACE, ARB, PPI, Brand NSAID, HMG. • Formulary Rapid Response $0.01 PMPM • Zero Dollar Generic Copay $1.25 /Member mailing or $1,000 for Member identification and authorization of $0 Copay • RxSavings Select $2.50 /targeted Member • Turn2Generics $0.01 PMPM Manage Medication Therapy and Safety • Medication Adherence $0.02 PMPM Includes all seven modules • Retrospective DUR $0.03 PMPM Retrospective DUR — Seniors $0.02 PMPM Enrich Care Continuum • ExpressAlliance Basic Pharmacist Support Basic Pharmacist Support Includes • Quarterly webcasts on drug updates 2 targets: $0.10 PMPM • Support for general drug questions 3 -5 targets: $0.12 PMPM • Monthly grand rounds case review 6+ targets: $0.14 PMPM • Regular review status calls (monthly or quarterly) • Clarification of clinical targeting within the web based application • ExpressAlliance Comprehensive Pharmacist Support Comprehensive Pharmacist Support includes all of the items with Basic Pharmacist Support plus: 2 targets: $0.14 PMPM • Proactive Web Target Screening (Weekly Review for High 3 -5 targets: $0.16 PMPM Risk Target Opportunities and Summary) 6+ targets: $0.18 PMPM • Full Case Review • Case Summary or Switch Opportunities • Post Hospital Patient Services • ExpressAlliancew Additional Services • ESI Managed Administration List – ESI coordinates match 2 targets: $0.02 PMPM process with the plan Sponsor's ESI - specific ID, client- 3 -5 targets: $0.02 PMPM specific IDs, and vendor - specific IDs for their Member 6+ targets: $0.01 PMPM population • Sponsor Managed Administration List – Plan Sponsor 2 targets: $0.01 PMPM provides Member ID match list to auto load into Web 3 -5 targets: $0.01 PMPM application, match between ESI ID, client - specific ID, and 6+ targets: No additional charge vendor - specific ID already complete • Emerging Therapeutic Communications (included with all No additional charge targeting packages) Additional Reporting • Predictive Modeling - (Adult and /or Pediatric): Report identifies 2 targets: $0.05 PMPM Members predicted to have high medical expenditures in the 3 -5 targets: $0.03 PMPM following six months. 6+ targets: No additional charge • Specialty Care Management Reporting – The CMC report 2 targets: $0.05 PMPM 29 185275.2 Packet Page -563- 2/28/2012 Item 11. F. identifies members who have qualified for the Specialty Program 3 -5 targets: $0.03 PMPM offered by CuraScript. Each qualified Member is assessed by a 6+ targets: No additional charge certified Clinical Nurse Manager and the evaluation details are stored in their system as a referral. The CMC reports are generated monthly and contain detailed information collected during the patient's assessment interview. The CMC nurse manager then sends all completed reports to ExpressAUlance® for distribution. There are six disease states included in the CMC reports; Multiple Sclerosis, Rheumatoid Arthritis, Psoriasis, Respiratory Syncytial Virus (RS \/), Hemophilia, and Hepatitis C. Value Based Insurance Design BID Priced upon request • Physician Consultation Phone -based Program: $5,800 set -up cost plus $100 per targeted physician with a minimum of 100 physicians. Subsequent quarters $1,000 set -up cost plus $100 per targeted physician with a minimum of 100 physicians. Mailed Profiles Only (i.e., no telephone consultation): $5,800 set -up plus $1.70 per mailed profile. Subsequent implementations $1,000 plus $1.70 per mailed profile. Phone -based Program plus additional profiles to physicians other than the group targeted for consultations: Same price as phone -based program plus $1.70 per additional profile. • Physician Report Card Mailed Profiles Only: $500 set -up plus $1.70 per mailed profile. Subsequent implementations $500 plus $1.70 per mailed profile. Enable Better Health and Value • Care Management $0.01 /claim — Asthma $0.01 /claim — Cardiovascular Disease $0.02 /claim — CHF $0.02/claim — Depression $0.01 /claim — Diabetes $0.02 /claim — Hypertension $0.02/claim — Migraine • Wellness Priced upon request • InteilAct $0.40 PMPM usi vi uruys suvlect to cnange at the oiscretion or tai. "' All programs are optional and will only be implemented upon Sponsor request. * ESI and Sponsor each understand that client conditions and vendor status changes may occur from time to time. If Sponsor changes its program operations or otherwise takes an action that has the effect of materially increasing the costs of the pharmacist consulting phase of the program, ESI shall have the right to make an equitable adjustment to the program price as of the effective date of the event upon notification to the Sponsor. Material costs are defined and increasing the pharmacist time by greater than 20% due to increased calls or services above the agreed upon service levels. 30 185275.2 Packet Page -564- EXHIBIT A -3 Rebates 1. Rebate Amounts 2/28/2012 Item 11.F. A. Subject to the conditions set forth in Sections 2. — 4. below and elsewhere in this Agreement, ESI will pay to Sponsor an amount equal to the greater of: (i) 100% of the Rebates and Manufacturer Administrative Fees received by ESI; Or (ii) Subject to Sponsor meeting the Plan design conditions identified in the table below, the following guaranteed amounts: Formulary: ESI National Preferred Copayment Design: Less than $15 Copayment differential Minimum $15 or 20% Copayment differential Participating Mail Service Participating Mail Service Pharmacies and Pharmacy Pharmacies and Pharmacy CuraScript CuraScript Per Brand Claim Year 1: $10.25 Year 1: $32.25 Year 1: $14.50 Year 1: $43.00 Year 2: $11.50 Year 2: $37.50 Year 2: $16.00 Year 2: $50.00 Year 3: $12.00 Year 3: $39.00 Year 3: $17.00 Year 3: $52.00 Based on the following days 30 days 90 days 30 days 90 days supply: B. If the Plan design conditions identified in the table in Section 1.A.(ii) above are not met, the "greater of methodology and the guaranteed amounts shall not apply, and ESI will, subject to the remaining terms of this Agreement, pay Sponsor Rebate amounts pursuant to the percentage set forth in Section 1.A.(i) above. 2. Exclusions Member Submitted Claims, Subrogation Claims, OTC products, claims older than 180 days, claims through Sponsor -owned or 340b pharmacies, and claims pursuant to a 100% Member Copayment plan are not eligible for the guaranteed Rebate amounts set forth in Section 1.A.(ii) above. 3. Rebate Payment Terms A. Subject to the conditions set forth herein, ESI shall pay Sponsor the percentage amount set forth in Section 1.A.(i) above for Rebates and Manufacturer Administrative Fees collected by ESI during each calendar quarter hereunder within approximately one hundred and fifty (150) days following the end of such calendar quarter. ESI shall also pay Sponsor the percentage amount set forth in Section 1.A.(i) 31 185275.2 Packet Page -565- 2/28/2012 Item 111. above for residual Rebates and Manufacturer Administrative Fees collected by ESI, if any, related to such calendar quarter, which are collected by ESI in subsequent quarters. B. On an annual and aggregate basis, ESI shall reconcile the guaranteed amounts set forth in Section 1.A.(ii) above (against the percentage amount paid to Sponsor quarterly) within two hundred and forty (240) days following the end of each calendar year and shall credit Sponsor for any deficit on the next invoice immediately following the reconciliation to the extent such deficit is not offset by ESI against excesses achieved in other guarantees offered pursuant to this Agreement. If, upon reconciliation, the annual aggregate percentage amount paid to Sponsor for the calendar year pursuant to Section 1.A.(i) and 3.A. above is greater than the guaranteed aggregate amounts set forth in Section 1.A.(ii) above, ESI shall be entitled to make up for, and offset, a shortfall in other guarantee(s) set forth in this Agreement with such excess annual aggregate percentage amount, and such excess amount shall be applied either directly to the other shortfall guarantee(s) or applied as a credit against future Rebate payments and Manufacturer Administrative Fee payments (or as a direct invoice amount to be paid by Sponsor, if a credit is not feasible). 4. Conditions ESI contracts with pharmaceutical manufacturers for Rebates and Manufacturer Administrative Fees on its own behalf and for its own benefit, and not on behalf of Sponsor. Accordingly, ESI retains all right, title and interest to any and all actual Rebates and Manufacturer Administrative Fees received from manufacturers. ESI will pay Sponsor amounts equal to the Rebate and Manufacturer Administrative Fees amounts allocated to Sponsor, as specified above, from ESL's general assets (neither Sponsor, its Members, nor Sponsor's plan retains any beneficial or proprietary interest in EST's general assets). Sponsor acknowledges and agrees that neither it, its Members, nor its Plan will have a right to interest on, or the time value of, any Rebate payments or Manufacturer Administrative Fee payments received by ESI during the collection period or moneys payable under this Section. No amounts for Rebates or Manufacturer Administrative Fees will be paid until this Agreement is executed by Sponsor. ESI will have the right to apply Sponsor's allocated Rebate amount and Manufacturer Administrative Fees amount to unpaid Fees upon notice to Sponsor. 32 185275.2 Packet Page -566- EXHIBIT B AUDIT PROTOCOL 1. AUDIT PRINCIPLES 2/28/2012 Item 11. F. ESI recognizes the importance of its clients ensuring the integrity of their business relationship by engaging in periodic audits of their financial arrangements with ESI. ESI provides this audit right to each and every client. In granting this right, EST's primary interest is to facilitate a responsive and responsible audit process. In order to accomplish this goal, for all clients, ESI has established the following Protocol. Our intent is in no way to limit Sponsor's ability to determine that ESI has property and accurately administered the financial aspects of the Agreement, but rather to create a manageable process in order to be responsive to our clients and the independent auditors that they may engage. If Sponsor has any concern that this Protocol will prohibit Sponsor from fully confirming its financial arrangement with ESI, we encourage Sponsor to express such concern at the audit kick -off meeting. 2. AUDIT PREREQUISITES A. The financial aspects of the Agreement can be broken down into the following three main components. Sponsor has the right to audit any or all three of these components, if applicable: • Claims • Rebates • Performance Guarantees At Sponsors discretion, Sponsor may conduct an audit of each component separately, or may combine all three components in one audit. In addition to the above audit rights, Sponsor may address general claim inquiries, which do not require an audit, by contacting Sponsors ESI Account Management team at any time. B. ESI will provide all data reasonably necessary for Sponsor to determine that ESI has performed in accordance with contractual terms. C. ESI engages a national accounting firm, at its sole cost and expense, to conduct a SAS 70 audit on behalf of its clients. Upon request, ESI will provide the results of its most recent SAS 70 audit. Testing of the areas covered by the SAS 70 is not within the scope of Sponsor's audit rights (i.e., to confirm the financial aspects of the Agreement) and is therefore not permitted. However, if requested, ESI will explain the SAS 70 audit process and findings to Sponsor in order for Sponsor to gain an understanding of the SAS 70. 3. AUDITS A. ESI recommends that the initial audit period for a claims audit cover a timeframe not to exceed twenty -four (24) months immediately preceding the request to audit (the "Audit Period "). This Audit Period allows a reasonable amount of time for both parties to conclude the audit before claims data is archived off the adjudication system. ESI will accommodate reasonable requests to extend the Audit Period, but this may delay EST's response time to audit findings due to the age of the claims. B. When performing a Rebate audit, Sponsor may perform an on -site review of the applicable Rebate rate components of manufacturer agreements, selected by Sponsor, as reasonably necessary to audit the calculation of the Rebate payments made to Sponsor by ESI. C. ESI recommends that Sponsor select an initial number of manufacturer contracts to enable Sponsor to audit fifty percent (50 %) of the total Rebate payments due to Sponsor for two (2) calendar quarters during the twelve (12) month period immediately preceding the audit, ESI will accommodate reasonable requests to extend this audit scope, but this may delay EST's on -site preparation time as well as response time to audit findings. 4. AUDIT FINDINGS A. Following Sponsors initial audit, Sponsor (or its Auditor) will provide ESI with a written report of suspected errors, if any. In order for ESI to evaluate Sponsor's audit report, Sponsor shall provide an electronic data file in a mutually agreed upon format containing either a representative sample of claims, or the entire suspected error population, and the dollar amount associated with the suspected errors. B. If Sponsor provides the entire suspected, error population, consistent with generally accepted industry audit standards, ESI will evaluate a statistically valid sample of claims in order to provide a timely response. ESI will use commercially reasonable best efforts to respond to the audit report in no more than thirty (30) days from EST's receipt of the report. Please be aware, however, that audits that require evaluation of six (6) or more findings typically require additional time to respond due to the complex nature of such audits. Our pledge to respond within the foregoing timeframe is predicated on a good faith and cooperative effort between Sponsor and /or its Auditor and ESI. C. Following EST's evaluation of Sponsors (or its Auditor's) audit report, if the audit findings warrant an increase in the Audit Period or the number of contracts reviewed, then ESI and Sponsor will mutually determine the scope of further analysis. D. Sponsor agrees that once audit results are accepted by both parties, the audit shall be considered closed and final. 33 185275.2 Packet Page -567- 2/28/2012 Item 111. E. Subject to and in conformance with any applicable law, ESI shall promptly pay overpayments (or Sponsor shall promptly pay underpayments, if applicable) upon closure of the audit. 5. CONFIDENTIALITY EST's contracts are highly confidential and proprietary. For this reason, ESI only permits on -site review rather than provide copies to our clients. During on -site contract review, Sponsor (or its Auditor) may take and retain notes to the extent necessary to document any identified errors, but may not copy (through handwritten notes or otherwise) or retain any manufacturer or Participating Pharmacy agreements (in part or in whole) or related documents provided or made available by ESI in connection with the audit. ESI will be entitled to review any notes to affirm compliance with this paragraph. 34 185275.2 Packet Page -568- 2/28/2012 Item 11.F. EXHIBIT C BUSINESS ASSOCIATE AGREEMENT Express Scripts, Inc. ( "ESI ") and Sponsor are parties to an agreement ( "PBM Agreement ") whereby ESI provides certain pharmacy benefit management services to the Sponsor's prescription drug plan (Sponsor and Sponsor's prescription drug plan collectively referred to hereinafter as "Plan "). This Business Associate Agreement addresses the parties' rights and obligations concerning the use and disclosure of patients' protected health information. The HIPAA Rules (as defined below) require ESI and the Plan to enter into a "business associate agreement" to comply with applicable sections of the HIPAA Rules as of the applicable Compliance Dates. If Sponsor or a third party authorized by Sponsor provides health information related to Sponsor's medical plan to ESI to perform PBM Services, and to the extent such information constitutes PHI, the parties agree that the terms of this Business Associate Agreement shall also apply with respect to such medical plan PHI. Definitions. (a) "Breach" shall mean the unauthorized acquisition, access, use, or disclosure of Protected Health Information that compromises the security or privacy of such information, except where an unauthorized person to whom such information is disclosed would not reasonably have been able to retain such information. "Breach" shall not include: (i) any unintentional acquisition, access, or use of PHI by an employee or individual acting under the authority of Plan or ESI, as long as such acquisition, access, or use was made in good faith and within the course and scope of the employment or other professional relationship of such employee or individual with Plan or ESI and such information is not further acquired, accessed, used, or disclosed by any person; or (ii) an inadvertent disclosure from an individual who is otherwise authorized to access PHI at a facility operated by Plan or ESI to another similarly situated individual at the same facility, provided that any such information received as a result of such disclosure is not further acquired, accessed, used, or disclosed by any person. (b) "Compliance Date(s)" shall mean the date established by HHS or the United States Congress for effective date of applicability and enforceability of the HIPAA Rules and HITECH Standards. (c) "Designated Record Set" shall mean a group of records maintained by or for Plan that is (i) the medical records and billing records about individuals maintained. by or for Plan, (ii) the enrollment, payment, claims adjudication, and case or medical management record systems maintained by or for a health plan; or (iii) used, in whole or in part, by or for Plan to make decisions about individuals. (d) "Electronic Health Record" shall mean an electronic record of health - related information on an individual that is created, gathered, managed, and consulted by authorized health care clinicians and staff. (e) "Electronic PHI" shall have the same meaning as the term "electronic protected health information" in 45 C.F.R. § 160.103. (f) "Health Plan" or "Plan" shall have the same meaning as the term "Health Plan" in 45 C.F.R. § 160.103. (g) " HIPAA Rules" means the collective privacy, transaction and code sets, and security regulations promulgated pursuant to the Health Insurance Portability and Accountability Act, as codified at 45 C.F.R. Parts 160, 162 & 164. (h) "HITECH Standards" means the privacy, security and security Breach notification provisions applicable to a Business Associate under Subtitle D of the Health Information Technology for Economic and Clinical Health Act ( "HITECH "), which is Title XIII of the American Recovery and Reinvestment Act of 2009 (Public Law 111 -5), and any regulations promulgated thereunder. (i) "Individual" shall have the same meaning as the term "individual" in 45 C.F.R. § 160.103 and shall include a person who qualifies as a personal representative in accordance with 45 C.F.R. § 164.502(g). (j) "Protected Health Information" or "PHI" shall have the same meaning as the term "protected health information" in 45 C.F.R. § 160.103, limited to the information created or received by ESI from or on behalf of Plan. (k) "Privacy Rule" shall mean the Standards for Privacy of Individually Identifiable Health Information at 45 C.F.R. Part 160 and 45 C.F.R. Part 164, Subpart A and Subpart E, as they exist now or as they may be amended. 35 185275.2 Packet Page -569- 2/28/2012 Item 11. F. (1) "Required by Law' shall have the same meaning as the term "required by law" in 45 C.F.R. § 164.103. (m) "Secretary" shall mean the Secretary of the Department of Health and Human Services or his designee. Adw (n) "Security Incident" shall have the same meaning as "security incident" in 45 C.F.R. § 164.304 (o) "Security Standards" shall mean the Security Standards, 45 C.F.R. Part 160 and 45 C.F.R. Part 164, Subpart A and Subpart C, to be effective no later than April 20, 2005, as they exist now or as they may be amended. (p) "Transactions Standards" shall mean the Standards for Electronic Transactions, 45 C.F.R. Parts 160 and 162, as they exist now or as they may be amended. Terms used, but not otherwise defined, in this Business Associate Agreement shall have the same meaning as those terms in the HIPAA Rules and the HITECH Standards. 2. General Use and Disclosure Provisions. ESI and Plan acknowledge and agree as follows: (a) Use or Disclosure. ESI agrees not to use or further disclose PHI other than as expressly permitted or required by this Business Associate Agreement or as Required by Law. (b) Minimum Necessary. ESI will take reasonable efforts to limit requests for, use and disclosure of PHI to the minimum necessary to accomplish the intended request, use or disclosure. (c) Specific Use or Disclosure Provisions. Except as otherwise limited in this Business Associate Agreement, ESI may use and disclose PHI to properly provide, manage and administer the PBM Services required under the PBM Agreement and consistent with applicable law to assist the Plan in its operations, as long as such use or disclosure would not violate the HIPAA Rules if done by the Plan, or such use or disclosure is expressly permitted in (i) through (iii) below: (i) ESI may use PHI for the proper management and administration of ESI or to carry out EST's legal responsibilities. (ii) ESI may disclose PHI to third parties for the proper management and administration of ESI or to carry out the legal responsibilities of ESI provided that the disclosures are Required by Law, or ESI obtains reasonable assurances from the person to whom the information is disclosed that: (A) the information will remain confidential, (B) the information will be used or further disclosed only as Required by Law or for the purpose for which it was disclosed to the person, and (C) the person notifies ESI of any instances of which it is aware in which the confidentiality of the information has been breached. (iii) ESI may use PHI to perform Data Aggregation services on behalf of the Plan as permitted by 45 C.F.R. § 164.504(e)(2)(i)(B). (d) Reporting. ESI agrees to promptly notify Plan if ESI has knowledge that PHI has been used or disclosed by ESI in a manner that violates this Business Associate Agreement. To the extent that ESI creates, receives, maintains or transmits Electronic PHI, ESI agrees to report promptly to Plan any Security Incident, as determined by ESI, involving PHI of which ESI becomes aware. Effective thirty (30) calendar days after the effective date of applicable regulations issued by the Secretary, ESI shall, following the discovery of a Breach of Unsecured PHI, notify Plan of such Breach without unreasonable delay and in no event later than sixty (60) calendar days after the discovery, including the identification of each individual whose Unsecured PHI has been, or is reasonably believed to have been, accessed, acquired or disclosed during the Breach. A Breach shall be treated as discovered as of the first day on which such Breach is known or reasonably should have been known by ESI. (e) Safeguards. ESI agrees to use appropriate safeguards, consistent with applicable law, to prevent use or disclosure of PHI in a manner that would violate this Business Associate Agreement. ESI shall provide Plan with such information concerning such safeguards as Plan may reasonably request from time to time. To the extent that ESI creates, receives, maintains or transmits Electronic PHI, ESI agrees to use appropriate administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of the Electronic PHI that ESI creates, receives, maintains or transmits on behalf of the Plan as required by the Security Standards. (f) Mitigation. ESI agrees to mitigate, to the extent practicable, any harmful effect that is known to ESI of a use or disclosure of PHI by ESI in violation of this Business Associate Agreement or the PBM Agreement. 36 185275.2 Packet Page -570- 2/28/2012 Item 111. (g) Subcontractors and Agents. ESI agrees to ensure that any agent, including a subcontractor, to whom it provides PHI received from, or created or received by ESI on behalf of the Plan, agrees to the same restrictions, terms and conditions that apply through this Agreement to ESI with respect to such information, including the requirement that it implement reasonable and appropriate safeguards to protect any Electronic PHI that is disclosed to it by ESI. (h) Access. Within fifteen (15) business days of a request by the Plan, ESI shall provide access to Plan to PHI in a Designated Record Set in order to meet the requirements under 45 C.F.R. § 164.524. If ESI receives a request directly from an Individual, or if requested by the Plan that access be provided to the Individual, ESI shall provide access to the Individual to PHI in a Designated Record Set within thirty (30) days in order to meet the requirements under 45 C.F.R. § 164.524. (i) Amendment. Within sixty (60) days of a request by the Plan or subject Individual, ESI agrees to make any appropriate amendment(s) to PHI in a Designated Record Set that Plan directs or agrees to pursuant to 45 C.F.R. § 164.526. (j) Accounting. Within thirty (30) days of a proper request by the Plan, ESI agrees to document and make available to Plan, for a reasonable cost -based fee (under conditions permitted by HIPAA if an Individual requests an accounting more than once during a twelve month period), such disclosures of PHI and information related to such disclosures necessary to respond to such request for an accounting of disclosures of PHI, in accordance with 45 C.F.R. § 164.528. Within sixty (60) days of proper request by subject Individual, ESI agrees to make available to the Individual the information described above. ESI shall retain copies of any accountings for a period of six (6) years from the date the accounting was created. (k) Restrictions on Use or Disclosure. Within fifteen (15) business days of a request of the Plan, ESI agrees to consider restrictions on the use or disclosure of PHI agreed to by the Plan on behalf of an Individual in accordance with 45 G.F.R. § 164.522. (I) Audit and Inspection. ESI agrees to make internal practices, books, and records relating to the use and disclosure of PHI received from, or created or received by ESI on behalf of the Plan, available to Plan within ten (10) business days, or at the request of the Plan or the Secretary, to the Secretary in a time and manner directed by the Secretary, for purposes of the Secretary determining the Plan's compliance with the HIPAA Rules. Any release of information regarding ESL's practices, books and records is proprietary to ESI and shall be treated as confidential and shall not be further disclosed without the written permission of ESI, except as necessary to comply with the HIPAA Rules. (m) Compliance with the HITECH Standards. Notwithstanding any other provision in this Business Associate Agreement, no later than February 17, 2010, unless a separate effective date is specified by law or this Business Associate Agreement for a particular requirement (in which case the separate effective date shall be the effective date for that particular requirement), ESI shall comply with the HITECH Standards, including, but not limited to: (i) compliance with the requirements regarding minimum necessary under HITECH § 13405(b); (ii) requests for restrictions on use or disclosure to health plans for payment or health care operations purposes when the provider has been paid out of pocket in full consistent with HITECH § 13405(a); (iii) the prohibition of sale of PHI without authorization unless an exception under HITECH § 13405(d) applies; (iv) the prohibition on receiving remuneration for certain communications that fall within the exceptions to the definition of marketing under 45 C.F.R. § 164.501 unless permitted by this Agreement and Section 13406 of HITECH; (v) the requirements relating to the provision of access to certain information in electronic access under HITECH § 13405(e); (vi) compliance with each of the Standards and Implementation Specifications of 45 C.F.R. §§ 164.308 (Administrative Safeguards), 164.310 (Physical Safeguards), 164.312 (Technical Safeguards) and 164.316 (Policies and Procedures and Documentation Requirements); and (vii) as of the separate compliance date set forth in regulations promulgated under HITECH on this topic, the requirements regarding accounting of certain disclosures of PHI maintained in an Electronic Health Record under HITECH § 13405(c) to the extent that ESI discloses any PHI maintained in an Electronic Health Record on behalf of the Plan pursuant to this Business Associate Agreement. 3. Plan Obligations. (a) Plan shall notify ESI of any limitation(s) in the notice of privacy practices of Plan in accordance with 45 C.F.R. § 164.520, to the extent that such limitation may affect EST's use or disclosure of PHI. (b) Plan shall notify ESI of any changes in, or revocation of, permission by an Individual to use or disclose PHI, to the extent that such changes may affect EST's use or disclosure of PHI. (c) Plan shall notify ESI of any restriction to the use or disclosure of PHI that Plan has agreed to in accordance with 45 C.F.R. § 164.522, to the extent that such restriction may affect EST's use or disclosure of PHI. (d) Plan shall not request that ESI use or disclose PHI in any manner that would exceed that which is minimally necessary under the HIPAA Rules or that would not be permitted by a Covered Entity. 37 185275.2 Packet Page -571- 2/28/2012 Item 11. F. (e) Plan agrees that it will have entered into "Business Associate Agreements" with any third parties (e.g., case managers, brokers or third party administrators) to which Plan directs and authorizes ESI to disclose PHI. 4. Transactions Standards. The HIPAA Rules provide for certain Transactions Standards for transfer of data between trading partners. While certain of the standards may or may not be adopted by the Plan (e.g., for eligibility), ESI will be prepared to accept the following in accordance with 45 C.F.R. Part 162.1502: ASC X12N 834 — Benefit Enrollment and Maintenance. In addition, to the extent applicable, ESI shall comply with other applicable transactions standards for claims processing functions between ESI and provider pharmacies. Each party hereby agrees that it shall not change any definition, data condition or use of a data element or segment in a standard, add any data elements or segment to the maximum defined data set, use any code or data elements that are either marked "not used" in the standard's implementation specification or are not in the implementation specification, or change the meaning or intent of the implementation specification. 5. Breach; Termination. (a) Without limiting the termination rights of the parties pursuant to the PBM Agreement, upon Plan's knowledge of a material breach by ESI of this Business Associate Agreement, Plan shall notify ESI of such breach and ESI shall have thirty (30) days to cure such breach. In the event ESI does not cure the breach, or cure is infeasible, Plan shall have the right to immediately terminate this Business Associate Agreement and the PBM Agreement. If cure of the material breach is infeasible, Plan shall report the violation to the Secretary. (b) As of February 17, 2010 and without limiting the termination rights of the parties pursuant to the PBM Agreement, upon EST's knowledge of a material breach by the Plan of this Business Associate Agreement, ESI shall notify Plan of such breach and the Plan shall have thirty (30) days to cure such breach. In the event the Plan does not cure the breach, or cure is infeasible, ESI shall have the right to immediately terminate this Business Associate Agreement and the PBM Agreement. if cure of the material breach is infeasible, ESI shall report the violation to the Secretary. (c) To the extent feasible, upon termination of the PBM Agreement for any reason, ESI shall, and shall cause any subcontractors and agents to, return or destroy and retain no copies of all PHI received from, or created or received by ESI on behalf of, the Plan. If ESI determines, in its sole discretion, that return or destruction of such information is not feasible, ESI shall continue to limit the use or disclosure of such information as set forth in this Agreement as if the PBM Agreement had not been terminated. 6. Indemnification. Each party (the "Indemnifying Party ") shall indemnify and hold the other party and its officers, directors, employees and agents (each an "Indemnified Party") harmless from and against any claim, cause of action, liability, damage, cost or expense ("Liabilities ") to which the Indemnified Party becomes subject to as a result of third party claims (including reasonable attorneys' fees and court or proceeding costs) brought against the Indemnified Party, which arise as a result of: (i) the material breach of this Business Associate Agreement by the Indemnifying Party; or (ii) the gross negligence or willful misconduct of the Indemnifying Party, except to the extent such Liabilities were caused by the Indemnified Party. THE FOREGOING INDEMNIFICATION SHALL NOT CONSTITUTE A WAIVER OF SOVEREIGN IMMUNITY BEYOND THE LIMITS SET FORTH IN SECTION 768.28, FLORIDA STATUTES. A party entitled to indemnification under this Section 6 shall give prompt written notification to the Indemnifying Party of the commencement of any action, suit or proceeding relating to a third party claim for which indemnification is sought, subject to applicable confidentiality constraints. The Indemnifying Party shall be entitled to assume control of the defense of such action; suit, proceeding or claim with competent counsel of its choosing. Indemnification shall not be required if any claim is settled without the Indemnifying Party's consent, which such consent shall not be unreasonably withheld. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 6, IN NO EVENT WILL AN INDEMNIFYING PARTY BE LIABLE TO AN INDEMNIFIED PARTY UNDER CONTRACT, TORT, OR ANY OTHER LEGAL THEORY FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE, OR SPECIAL LOSSES OR DAMAGES OF ANY kIND. 7. Miscellaneous. (a) Amendment. The parties acknowledge that the foregoing provisions are designed to comply with the mandates of the HIPAA Rules and HITECH Standards. ESI shall provide written notice to Plan to the extent that any final regulation or amendment to final regulations promulgated by the Secretary under HITECH requires changes to this Business Associate Agreement. Such written notice shall include any additional amendment required by any such final regulation and the Business Associate Agreement shall be automatically amended to incorporate the changes set forth in such amendment provided by ESI to Plan, unless Plan objects to such amendment in writing within fifteen (15) days of receipt of such written notice. In the event that Plan objects timely to such amendment, the parties shall work in good faith to reach agreement on an amendment to the Business Associate Agreement that complies with the final regulations. If the parties are unable to reach agreement regarding an amendment to the Business Associate Agreement within thirty (30) days of the date that ESI receives any written objection from the Plan, either ESI or Sponsor may terminate this Business Associate Agreement upon ninety (90) days written notice to the other party. Any other amendment to this Business Associate Agreement unrelated to 38 185275.2 Packet Page -572- 2/28/2012 Item 11. F. compliance with applicable law and regulations shall be effective only upon execution of a written agreement between the parties. (b) Effect on PBM Agreement. Except as relates to the use, security and disclosure of PHI and electronic transactions, this Business Associate Agreement is not intended to change the terms and conditions of, or the rights and obligations of the parties under, the PBM Agreement. (c) No Third -Party Beneficiaries. Nothing express or implied in the PBM Agreement or in this Business Associate Agreement is intended to confer, nor shall anything herein confer, upon any person other than the parties and the respective successors or assigns of the parties, any rights, remedies, obligations or liabilities whatsoever. (d) Interpretation. Any ambiguity in this Business Associate Agreement shall be resolved in favor of a meaning that permits the Plan to comply with the HIPAA Rules and the HITECH Standards. (e) Effective Date. This Business Associate Agreement shall be effective as of the applicable Compliance Dates or the effective date of the PBM Agreement, whichever is later. 0 185275.2 Packet Page -573- 2/28/2012 Item 11. F. EXHIBIT D FINANCIAL DISCLOSURE TO ESI PBM CLIENTS This disclosure provides an overview of the principal revenue sources of Express Scripts, Inc. ("ESI") and does not supersede any of the specific financial terms and conditions between ESI and an individual client. In addition to administrative and dispensing fees paid to ESI by our clients for pharmaceutical benefit management ( "PBM ") services, ESI derives revenue from other sources, including arrangements with pharmaceutical manufacturers, wholesale distributors, and retail pharmacies. Some of this revenue relates to utilization of prescription drugs by members of the clients receiving PBM services. ESI may pass through certain manufacturer payments to its clients or may retain those payments for itself, depending on the contract terms between ESI and the client. Network Pharmacies — ESI contracts for its own account with retail pharmacies to dispense prescription drugs to client members. Rates paid by ESI to these pharmacies may differ among networks (e.g., Medicare, Workers Comp, open and limited), and among pharmacies within a network, and by client arrangements. PBM agreements generally provide that a client pay ESI an ingredient cost, plus dispensing fee, for drug claims at a uniform rate. If the rate paid by a client exceeds the rate contracted with a particular pharmacy, ESI will realize a positive margin on the applicable claim. The reverse also may be true, resulting in negative margin for ESI. ESI also enters into pass- through arrangements where the client pays ESI the actual ingredient cost and dispensing fee paid by ESI to the pharmacy. In addition, when ESI receives payment from a client before payment to a pharmacy, ESI retains the benefit of the use of the funds between these payments. ESI may charge pharmacies standard transaction fees to access EST's pharmacy claims systems and for other related administrative purposes. Brand /Generic Classifications — Prescription drugs may be classified as either a "brand" or "generic;" however, the reference to a drug by its chemical name does not necessarily mean that the product is recognized as a generic for adjudication, pricing or copay purposes. ESI distinguishes brands and generics through a proprietary algorithm ( "BGA ") that uses certain published elements provided by First DataBank (FDB) including price indicators, Generic Indicator, Generic Manufacturer Indicator, Generic Name Drug Indicator, Innovator, Drug Class and ANDA. The BGA uses these data elements in a hierarchical process to categorize the products as brand or generic. The BGA also has processes to resolve discrepancies and prevent "flipping" between brand and generic status due to price fluctuations and marketplace availability changes. The elements listed above and sources are subject to change based on the availability of the specific fields. Updated summaries of the BGA are available upon request. Maximum Allowable Cost/Maximum Reimbursement Amount ( "MAC ") — As part of the administration of the PBM services, ESI maintains a MAC List of drug products identified as requiring pricing management due to the number of manufacturers, utilization and /or pricing volatility. The criteria for inclusion on the MAC List are based on whether the drug has readily available generic product(s), is generally equivalent to a brand drug, is cleared of any negative clinical implications, and has a cost basis that will allow for pricing below brand rates. ESI also maintains correlative MAC price lists based on current price reference data provided by FIDE or other nationally recognized pricing source, market pricing and availability information from generic manufacturers and on -line research of national wholesale drug company files, and client arrangements. Similar to the BGA, the elements listed above and sources are subject to change based on the availability of the specific fields. Updated summaries of the MAC methodology are available upon. request. Manufacturer Formulary Rebates, Associated Administrative Fees, and PBM Service Fees — ESI contracts for its own account with manufacturers to obtain formulary rebates attributable to the utilization of certain brand drugs and supplies (and possibly certain authorized generics marketed under a brand manufacturer's new drug application). Formulary rebate amounts vary based on the volume of utilization_ as well as a client's benefit design and formulary position applicable to the drug or supplies, and in certain instances also may vary based on the product's market - share. ESI often pays an amount equal to all or a portion of the formulary rebates it receives to a client based on the client's PBM agreement terms. ESI retains the financial benefit of the use of any funds held until payment of formulary rebate amounts is made to the client. In addition, ESI provides administrative services to formulary rebate contracted manufacturers, which include, for example, maintenance and operation of the systems and other infrastructure necessary for managing and administering the PBM formulary rebate process and access to drug utilization data, as allowed by law, for purposes of verifying and evaluating the rebate payments and for other purposes related to the manufacturer's products. ESI receives administrative fees from the participating manufacturers for these services. These administrative fees are calculated based on the price of the rebated drug or supplies along with the volume of utilization and do not exceed the greater of (1) 4.58% of the average wholesale price, or (ii) 5.5% of the wholesale acquisition cost of the products. In its capacity as a PBM company, ESI also may receive service fees from manufacturers as compensation for the performance of various services, including, for example, formulary compliance initiatives, clinical services, therapy management services, education services, medical benefit management services, and the sale of non - patient identifiable claim information. These service fees are not part of the formulary rebates or associated administrative fees. ESI Subsidiary Pharmacies — ESI has several licensed pharmacy subsidiaries, including our specialty pharmacies. These entities may maintain product purchase discount arrangements and /or fee - for - service arrangements with pharmaceutical manufacturers and wholesale distributors. These subsidiary pharmacies contract for these arrangements on their own account in support of their various pharmacy operations. Many of these subsidiary arrangements relate to services provided outside of PBM arrangements, and may be entered into irrespective of whether the particular drug is on one of ESI's national formularies. Discounts and fee - for - service payments received by EST's subsidiary pharmacies are not part of 40 185275.2 Packet Page -574- 2/28/2012 Item 11. F. the PBM formulary rebates or associated administrative fees paid to ESI in connection with EST's PBM formulary rebate programs. From time to time, ESI also may pursue and maintain for its own account other supply chain sourcing relationships not described below as beneficial to maximize EST's drug purchasing capabilities and efficiencies, and ESI may realize an overall positive margin with regard to these initiatives. The following provides additional information regarding examples of ESI subsidiary pharmacy discount arrangements and fee - for - service arrangements with pharmaceutical manufacturers, wholesale distributors, and third party data aggregators: ESI Subsidiary Pharmacy Discount Arrangements — ESI subsidiary pharmacies purchase prescription drug inventories, either from manufacturers or wholesalers, for dispensing to patients. Often, purchase discounts off the acquisition cost of these products are made available by manufacturers and wholesalers in the form of either up -front discounts or retrospective discounts. These purchase discounts, obtained through separate purchase contracts, are not formulary rebates paid in connection with our PBM rebate programs. Drug purchase discounts are based on a pharmacy's inventory needs and, at times, the performance of related patient care services and other performance requirements. When a subsidiary pharmacy dispenses a product from its inventory, the purchase price paid for the dispensed product, including applicable dispensing fees, may be greater or less than that pharmacy's acquisition cost for the product net of purchase discounts. In general, our pharmacies realize an overall positive margin between the net acquisition cost and the amounts paid for the dispensed drugs. ESI Subsidiary Pharmacy Fee - For - Service Arrangements — EST's subsidiary pharmacies also may receive fee -. for - service payments from manufacturers or wholesalers in conjunction with various programs or services, including, for example, patient assistance programs for indigent patients, dispensing prescription medications to patients enrolled in clinical trials, various therapy adherence and fertility programs, administering FDA compliance requirements related to the drug, product reimbursement support services, and various other pharmacy programs or services. As a condition to having access to certain products, and sometimes related to certain therapy adherence criteria or FDA requirements, a pharmaceutical manufacturer may require a pharmacy to report selected information to the manufacturer regarding the pharmacy's service levels and other dispensing- related data with respect to patients who receive that manufacturer's product. A portion of the discounts or other fee -for- service payments made available to our pharmacies may represent compensation for such reporting. In addition, ESI may sell non - patient identifiable claim information it maintains as a PBM or through one of its subsidiaries to data aggregators or manufacturers on a fee - for - service basis. All reporting activities are conducted in compliance with applicable patient and pharmacy privacy laws Other Manufacturer Arrangements — ESI also maintains other lines of business that may involve discount and service fee relationships with pharmaceutical manufacturers and wholesale distributors. Examples of these businesses include a wholesale distribution business, a group purchasing organization, a drug sample fulfillment company (Phoenix Marketing Group), and a medical benefit management company. Compensation derived through these business arrangements is not part of the PBM formulary rebates or associated administrative fees paid to ESI in connection with EST's PBM formulary rebate programs. Services related to these arrangements are provided to manufacturers irrespective of whether a drug is on one of EST's national formularies. THIS EXHIBIT REPRESENTS ESI'S FINANCIAL POLICIES. ES1 MAY PERIODICALLY UPDATE THIS EXHIBIT AND THE FINANCIAL DISCLOSURES CONTAINED HEREIN TO REFLECT CHANGES IN ITS BUSINESS PROCESSES: THE CURRENT FINANCIAL DISCLOSURE IS AVAILABLE UPON REQUEST AND ACCESSIBLE ON EXPRESS - SCRIPTS.COM FOR CLIENTS & ADVISORS. 41 185275.2 Packet Page -575- 2/28/2012 Item 11.F. EXHIBIT E PERFORMANCE STANDARDS In the event that any failure by ESI to meet any performance standard is due to a "force majeure" as defined in the Agreement, failure of Coalition to perform its obligations under the Agreement, or actions or inactions of Coalition that adversely impact EST's ability to maintain the subject standard (e.g., faulty eligibility, changes in benefit design not adequately communicated to Members and benefit designs that substantially change the Members' rights under the Plan), ESI will be excused from compliance with such performance standards until such circumstances have been resolved and any existing backlogs or other related effects have been eliminated. Within forty -five (45) business days after the end of each quarter, ESI shall quarterly report to Sponsor ESI's performance under each performance standard. Notwithstanding the foregoing, for purposes of determining whether ESI has met or failed to meet each performance standard, performance standards will be measured and reconciled on an annual basis and amounts due resulting from an ESI failure to meet any performance standard(s), if any, shall be calculated and paid to Sponsor within ninety (90) days following the end of each annual reconciliation period. No performance penalties, if any, will be paid until this Agreement is executed by Sponsor. In no event will the sum of the payments to Sponsor, as a result of EST's failure to meet the performance standards exceed $10 per Member per year for the annual performance standards. The following performance standards are based on 15,000 Members as of the Effective Date and throughout the Term. Any material change below such number may result in a renegotiation of the standards and penalties set forth below. Performance standards for EST's Mail Service Pharmacy assume a minimum of 1,000 Mail Service Pharmacy prescriptions submitted annually ESI guarantees that calls will be answered in an average of 30 seconds or less. This guarantee is predicated on the Average Speed of installation of a toll -free number unique to the sponsor. Answer 42 Packet Page -576- ESI will pay Sponsor $0.35 per member for each full second above the standard 30 seconds on an annual basis. The maximum annual penalty will be $0.70 per member. The calculation will be based on the average speed of answer. 185275.2 ESI will guarantee a blockage rate of 2% or less. Blockage is defined as a caller receiving a busy signal. Blockage Rate This guarantee is predicated on the installation of a toll -free (Busy Signal) number unique to Sponsor. 2/28/2012 Item 11. F. ESI will pay Sponsor $0.35 per member for each full percentage point above the standard 2 %, on an annual basis. The maximum annual penalty will be $0.70 per member. The calculation will be based on the blockage percentage. ESI will pay Sponsor $0.35 per member for each full The abandonment rate on Sponsor's dedicated toll -free line percentage point above the will be 2% or less (excluding calls terminated by the member standard 2% on an annual Percent of Calls in less than 30 seconds). basis. The maximum annual Abandoned penalty will be $0.70 per member. The calculation will be based on the average percentage of calls abandoned. 43 185275.2 Packet Page -577- ESI guarantees 90% of prescriptions not subject to ESI will pay Sponsor $0.35 Turnaround Time intervention will be dispensed within two (2) business days. per member for each full for Routine ESI guarantees an annual average 99% system availability of percentage point below the (Clean) Whereas ESI strives for 100% accuracy, ESI guarantees standard of 99.99 %, on an Dispensing 99.99% dispensing accuracy. Guarantee measured at book annual basis. The maximum Accuracy of business level. annual penalty will be $0.70 Adjudication regularly scheduled systems maintenance or systems per member. The downtime attributed to telecommunications failure or other calculation will be based on Turnaround Time ESI guarantees that 90% of prescriptions subject to the average prescription for Prescriptions intervention will be dispensed within five (5) business days. accuracy. 43 185275.2 Packet Page -577- ESI guarantees 90% of prescriptions not subject to ESI will pay Sponsor $0.35 Turnaround Time intervention will be dispensed within two (2) business days. per member for each full for Routine ESI guarantees an annual average 99% system availability of percentage point below the (Clean) the point -of -sale adjudication system on a book -of- business 90% standard on an annual Prescriptions basis. basis. The maximum annual Availability and This guarantee excludes systems downtime attributed to penalty will be $0.70 per Adjudication regularly scheduled systems maintenance or systems member. downtime attributed to telecommunications failure or other ESI will pay Sponsor $0.35 Turnaround Time ESI guarantees that 90% of prescriptions subject to per member for each full for Prescriptions intervention will be dispensed within five (5) business days. percentage point below the Subject to 90% standard on an annual Intervention basis. The maximum annual penalty will be $0.70 per member. 43 185275.2 Packet Page -577- For each full percentage point which the yearly ESI guarantees an annual average 99% system availability of average of the online the point -of -sale adjudication system on a book -of- business computer systems Data Systems basis. availability is below 99 %, Availability and This guarantee excludes systems downtime attributed to ESI will pay Sponsor $0.35 Adjudication regularly scheduled systems maintenance or systems per member. downtime attributed to telecommunications failure or other The maximum annual circumstances outside the control of ESI. penalty for availability and adjudication will be $0.70 per member. 43 185275.2 Packet Page -577- 2/28/2012 Item 11. F. One random sample member survey will be completed annually on a book -of- business basis. ESI guarantees that Satisfaction 90% of survey participants' responses to a question ESI will put $0.70 per Survey measuring overall satisfaction with the prescription benefit member as a total amount of program will indicate "satisfied" or "very satisfied." This penalty at risk. standard will be measured and reported annually. Timely Production of Replacement ESI guarantees that standard replacement 1D cards will be ESI will put $0.70 per ID Cards produced within an annual average of five (5) business days member as a total amount of of the receipt of machine - readable eligibility information. penalty at risk. Timely Production of Management ESI guarantees access to the online reporting data will be ESI will put $0.70 per Reports available within an annual average of ten (10) days after member as a total amount of month -end. Billing data will be available within an annual average of ten (10) days after the billing cycle. penalty at risk. Management Account Express Scripts agrees to provide an annual Account Management Satisfaction Surrey. Express Scripts guarantees that the Sponsor's overall satisfaction with Account Account Management will be greater than or equal to Meets Management — Expectations. For the purposes of this guarantee, Sponsor's ESI will put $0.70 per Satisfaction rating shall be defined on the following scale: Exceeds member as a total amount of Expectations, Meets Expectations, Does Not Meet penalty at risk. Expectations in any contract year. ESI shall be responsible for survey design, data collection, analysis, and all costs associated with conducting the surreys. Eligibility — , Timeliness of ESI guarantees that electronic eligibility will be installed and ESI will put $0.70 per Installations eligibility status will be effective within an annual average of member as a total amount of two (2) business days of receipt. penalty at risk. ESI guarantees that electronic eligibility records will be Eligibility — loaded with 99.5% accuracy (as provided by Sponsor). This Accuracy guarantee is contingent upon receipt of clean eligibility data ESI will put $0.70 per delivered in an agreed upon format and that it can be member as a total amount of determined with certainty that ESI incorrectly loaded the penalty at risk. eligibility. Express Scripts guarantees 100% of calls or written inquiries (including e-mail) will be returned or responded to within 24 Express Scripts will put Account Service business hours. Calculated as the number of calls returned $0.70 per member as a total Responsiveness or responded to by an account service representative within amount of penalty at risk. 24 business hours of receipt divided by the total number of calls received. 44 185275.2 Packet Page -578- Express Scripts guarantees that standard reports provided by Account Service Express Scripts will be delivered within 45 days after the Reporting reporting period. Reports requiring customization will be delivered on a mutually agreed upon date. 45 Packet Page -579- 2/28/2012 Item 11.F. Express Scripts will pay $0.70 per member for every quarter the standard is not met. Express Scripts will put $0.70 per member as a total amount of penalty at risk. 185275.2 x W m E m N .N U ' U� C UN 0 UCL O L a V) Immmo wm r wommommN �r *A' 1.1- Well Z 1,OZ /8Z /Z O N C (6 Ch O N _N O N O N m c m ti> m s -08S- 3Sed ;@Ped w O (N 0) N N O O O m N O 7 O�r--, 0 0 (D O M O O I- O- O O c— O CD 00 O O O N O O(D M (D CD O N~ _O (D O CD 00 I` O m N (D O O0 O O r O � OD O I-- (f3 M((') lf) Efl O � 6i m 63 O 64 00 (D m co O EA 69 fA Vt Ef3 EH Q4 y} CD CD I— co O O !� �~ co co 00 co N N • �Y N �t M O N M (f� O N O O N 00 Vi � N (f7 Lo- co (0 co O It I— to (n O N r— O O t` ti O 00 — CO 00 (D co N CO r O ((7 O 0 N 00 V O O N C 0 0) m O M I� r1 C6 (o ti ti� ct N (!') 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F. 2012 PBM Proposal Analysis Summary Willis Packet Page -581- 2/9/2012 Difference From Difference From % Change from PBM PBM Current Pricing 3 Year Total Current Pricing Current Pricing Rank ESI - Current 0.0% $74,397;508 $0, 0.0% 0 ESI w/o Walgreens With Willis Terms 1 $66,707,586 $7,689,922 - 10.3% 1 Benecard - BAFO $67,729,833 $6,667,675 -9.0% 2 Willis Packet Page -581- 2/9/2012 Difference From % Change from % Change from PBM 3 Year Total Current Pricing Current Pricing Rank ESI - Current $76,476,563 $0 0.0% 0 ESI w/o Walgreens With Willis Terms $71,034,559 $5,442,003 -7.1% 1 Benecard - BAFO $71,481,119 $4,995,443 -6.5% 2 Willis Packet Page -581- 2/9/2012 Difference From Difference From % Change from PBM 3 Year Total 3 Year Total Current Pricing Current Pricing Rank ESI - Current $787,433 $0 $0 0 ESI w/o Walgreens With Willis Terms $656,194 $0 $0 1 Benecard - BAFO $1,615,484 $992,330 $992,330 2 Willis Packet Page -581- 2/9/2012 Difference From % Change from PBM 3 Year Total Current Pricing Current Pricing Rank ESI - Current $787,433 $0 0.0% 0 ESI w/o Walgreens With Willis Terms $656,194 $131,239 - 16.7 %° 1 Benecard - BAFO $1,615,484 ($828,051) 105.2% 2 Rebates Difference From % Change from PBM 3 Year Total Lowest Lowest Rank ESI - Current $2,866,488 $0 0.0% 0 ESI w/o Walgreens With Willis Terms $4,983,168 ($2,116,680) 73.8% 2 Benecard - BAFO _ $6,359,100 ($3,492,612) 121.8% 1 Willis Packet Page -581- 2/9/2012 2/28/2012 Item 11. F. Willis CCHCC Pricing Guarantees Benecard BAFO retail discounts were reduced 1.5% and mail discounts 3% to address contract terms they would not agree to which inflate their apparent discounts. These were: * Including U &C claims in the calculation of discount guarantees. Willis recommends this not be done. ESI agreed to the Willis approach. * Including single source or originator medications in the calculation of brand discounts, not in generic as Willis recommends. ESI agreed to the Willis approach. Willis Packet Page -582- 2/9/2012 ESI - Current ES1 w/o Wal reens With Benecard - BAFO Retail 2012 2013 2014 2012 2013 2014 2012 2013 2014 Administrative Fees Administrative fee per claim $0.00 $0.00 $0.00 .` $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Administrative fee PEPM $0.00 $0.00 $0.00 ". $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Administrative fee PMPM $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $1.40 $1.40 $1.40 Dispensing fee Brand legend $1.20 $1.20 $1.20 $1.00 $1.00 $1.00 $1.30 $1.30 $1.30 Generic legend $1.20 $1.20 $1.20 $1.00 $1.00 $1.00 $1.30 $1.30 $1.30 Guaranteed Discounts Brand % 14.20 % 14.20 % 14.20% 16.00% 16.00% 16.00% 12.58% 13.00% 13.42% Generic % 58.70% 58.70% 58.70% 68.00% 69.00% 70.00% 69.10% 69.75% 71.75% Rebates Rebates per Script $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $8.20 $6.80 $6.05 Rebates per Brand $8.25 $8.25 $8.25 $14.50 $16.00 $17.00 $0.00 $0.00 $0.00 Rebates PEPM $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Rebates Share % 100% ' 100% 100% 100% 100% 100% 100% 100% 100% Mail 2012 2013 2014 2012 2013 2014 2012 2013 2014 Administrative Fees Administrative fee per claim $0.00 $0.00 $0.00 ' $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Dispensing fee Brand legend $0.00 $0.00 $0.00 > $0.00 $0.00 $0.00 $7.71 $7.71 $7.71 Generic legend $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $7.71 $7.71 $7.71 Guaranteed Discounts Brand% 22.00 % 22.00% 22.00% 23.25% 23.25% 23.25% 18.61% 18.61% 18.61% Generic % 64.30% 64.30% 64.30 %: 71.00% 72.00% 73.00% 84.45% 84.45% 84.45% Rebates Rebates per Script $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $19.11 $18.75 $15.90 Rebates per Brand $32.00 $32.00 $32.00 $43.00 $50.00 $52.00 $0.00 $0.00 $0.00 Rebates Share % 100% 100% 1 100% 100% 100% 100% 100% 100% 100% Benecard BAFO retail discounts were reduced 1.5% and mail discounts 3% to address contract terms they would not agree to which inflate their apparent discounts. These were: * Including U &C claims in the calculation of discount guarantees. Willis recommends this not be done. ESI agreed to the Willis approach. * Including single source or originator medications in the calculation of brand discounts, not in generic as Willis recommends. ESI agreed to the Willis approach. Willis Packet Page -582- 2/9/2012 2/28/2012 Item 11.F. Packet Page -583- TO - 0 �. n n ' 4 N� �ao R v w m ti m n O' tD y 7 N N R h 1.0 m W y,.A yy O r(A N AW N A W V[ tN H �A vi vi N i. lA L4 OA N N y H H r IN �N.1 tin .A,7 Ct, W fJV.1 J W H W C C !O N VA ;] C 1 00 N '00 69 H 00 N H H H po _ _ H u�+ U b C7 H H H ^ .� p O H A A 0 00 4" O V vi O A W O A N 00.4 N V A `. zo O Q� b9 H U N H H H cc J 65 �O W O V 1 H H H ^ N n N N Or H H 10 N O H .0.. O Go J W Co O [J N O^ W N W A O 0A0 W N i� O� O W I O 1 65 H 00 to H H H A A H N N N 00 H H H m H IAI It 00 W N J U o, 00 w w m �, tw 00 HO H 00 W H H H CT 65 00 N W H H H ` H H N 69 N H G y A A O to !A a J: A a W P th N tOJ` Hi H H H H H 0qO QIDi O a H H H r tl N N N 69 N H H H N H H N H► W W N p O H H p W W a b 000 W N N 00 6e HW NJ OHO JHH ► N � R F 69 A N 69 N N H N = - 4 a' N. W H H O A H H O N p, a, 00 Vii O•. A N' CC O C1 a 00 O J V N W A N r pN S S W O W ► C �D Cn to W A 00 U O W Obi O 00 A to Q, a J d a N.ti N.O U Nb Nto H HN W NN VHH .� 0 H d9 N 69 N. W A 69 b9 N p H H H ^ H N p = H w A H H W p d 0 tl� W A W r A 07 N H W A A N A O 00 r J W A OWO 000 A O a -,4 GO W' Cc, A J H H Packet Page -583- TO - 0 �. n n ' 4 N� 2/28/2012 Item 11. F. Packet Page -584- -z n _ D W LA N 00 y. h F b � N N H H W J�IG 00 0 W H H O O O O J H H O A 0 0 J O O O ^ N ER 6^ Q1 � Qi N H y r N H H W N .yj a 7 t o W C H W W H 10 lz N W fie W A W 0 0 O v0 7 .NAP W .N- O p HH O LA O� O C C b9 v9 Wi N H N y H W W U Yi 0 N P O H O1 1D 'T J� V l 69 A H N W H A A H N J W W H H H A N CT 'Cl W C N �'' I,J b -ice.. J O O O N N H H O O V1 OD A O NCB N r H Cli C.-D w (A r r A � r Y U HH O 0J0 OA0 H N N H V A 01 H H H N J 00 00 ? U 01 N 0 0 p -0, O -OWN V� -O' W O Jr HH O WO .6, NW COO C` m ^� H m A Vr w vo 69 W U tv A C1 H^ 00 O W A V, O W ff9 y H w H O O H O J r H H H O � � N C W W A O W V1 H H J O 00 W J A O N N I A A tf W In �C A W J A A 00 H� A L r0 A 3 In — 69 �i„n L J O 69 H O UI^ C H U W^ H H H JO C�1p N 00 C h W :1� A U U O Co O b9 f19 b9 N = W H y N c` W Vi O O N W 1D W W y U 10 ^ a U cc 1p N O OD r p J 1p U H �O 01 1D D\ 1D A a N N N H H m w N iw J 0 0 0 7 m � VI N 1p W H U 00 OD W N A 4- Y Q H �.N W X01 HH O S^' Alp HH O A S W N N A ,h� W Vr W O T W V0i H a twl C J ,O7i N J O O O 00 J 00 00 U U O b J 00 H J A 0* 0' 1D A O C Packet Page -584- -z n _ D W LA N 2/28/2012 Item 11. F. Packet Page -585- O G !_ 0 0^, iY r� N Q. V J C° Z e O a G] w Ci% Q7 0 D D D 3 s A ... `7 a Ln w d 0 a ^ 7 < < < p7w a m m � 17 m 00 b^ 00 by N yi � N fide .�• A N -4 W 00 V9 b W O J. b J O W 69 69 N O N W --14 O U EA V9 69 N = fA A N m •� O O A 69 W. \D W w . N + J b 49 69 00 ± ;.7 •-• tn. A O Yi 69 O A 'O r 69 O 0a,0 W O 1A 69 69 �O Eyq �D d9 ,may w N N = &9 yq N A W J A V .AA 69 .N. A =,-Q 69 N 'A 69 0 Al w y 00 69 69 W 69 J Obi r G5 49 6A O A 11,01 H9 fI9 O N N N V9 C C C H9 N = a N Or ^ G9 A W N Or 4 �] t°n IJ 69 00 00 00 N (N ON 69 69 O\ O..•+ �] A b9 v i N W O 69 O �D 69 O J O J 69 00 N I0 U V! h 69 00 0 -00--4 O W O O O O A Vi �D O O a` N Gn y9 C VC J U NN CCO C >n 6 v "° N a y O 69 O A 'S Go w W A 00 OD J o W o t/i 00 J J 69 f.9 �l di O fI9 O� A U VO i V 69 uj � W O� p W W 01 O O yS!! �D O W W w W �O U 69 b9 O U 'O 00 N p C E 69 d9 W W 69 W O U O w N � 9A 00 J W U h h b9 p O I== iA N 49 i9 �. J 69 o0 69. O O� 1p N N� p by r � N OD H 69 b A p N N OD fA 69 O N O N A O �D N 'JI fJi 00 Gi W 00 VI 01 N pp 01 N a1 W .0 00 r °, N A 69 Vf N T ip 10 W J O J O J J W J b W O O Q\. w N O ao W 00 J OD O 4. f/ N O J W GD 00 O O n 00 Ey, 00 y, O W b � N O N O 6M ' j -+ 00 0 N O W O N. w W N J �0 U w l0 V9 a W w W W O V9 h 00 pp W A W '. G 6 O N ut J A O O N 00 0\ iA 0�0 ? OWO '0 4If F/f �O r 00 W W C O y r D N N N N W OD 1i 69 FA 69 _A N A J �O N N O V9K N N N V9H o O �D A O OD �0 0\ W A to A 'S = C1 W C w OD d N W W O O OD W .+ 06 C N N W J Vf O z g '0 A OD Packet Page -585- O G !_ 0 0^, iY r� N Q. V J 2/28/2012 Item 11.F. Packet Page -586- YJ o n• C N a 7 O s rD C O �• a W W rn �� A a s o. A 77 7d m� �� A 3 o n> M cm m o m =° ro e a.. n b•an Vt EA. th N 6A 49 N 4n se 4A W N G1 �O A fA FA 49 O L N N U 6'9 W 01 01 A 69 69 69 �"� tn. Cn 01 in 00 � W? b O 4 J 4/f 49 J O V 1D 00 N N 0. O A J W 69 W J 69 W U01 000 i 69 69 K W O O O O OD FA fA O W 0 00 J N O C C N 0 N 69 69 N y, W N W A Hi' A N W 00 O N J N � � U 1O 49 19 � J V .l GO to (a9 A 69 OJi fr9 A 0�0 fA J W .�+ A fA 69 iA 'P 69 69 W O 00 N W D\ O d9 to N O ` 49 fA rA A p a, J Q` J 6A O 69 W W Vf N 'Z 000 61 1 J O Vf of b9 O W V N O b b + O 00 O O O C O OW1 0 p _ :Ag p - 0U C w 69 fa'9 N K 69 0�1 f�9 CN W 01 6A 69 O A tn. YO Fig 69 01 U 69 O 7-4 O A 69 01 01 00 O V9 49 69 10 00 0 E 10 O A O iAh N•_^' W 10 S; G E9 O 69 69 = fA fA W N rt W A O y A O O A fA A N a U N A 3 N N W EA .A J 49 V V 69 00 69 A O O O f9 69 G9 O 0 W1. 0 O O 00 D, V9 U9 C A N b W J C O O 69 N N IJ w1 in O N N W K U N b J W O A .. 69 0� A 49 w N U C C O N O 01 U N J J a A N O 69 U 10 W N 10 01 C A A 69 M b9 N 0 6r9 N 69 = W 4A m y W In mil. 0` �• ► � f9 y � � O 00 fA N9 a O �,' d 0 O N P .P W b A a W W 6'! W 000 b 000 W 01 L W N V O O J •- W O W N K A D\ N a O J 49 J H N O b 45 K 01 C 4- A 00 O N A a A CN ON1 A6969 A J001 OIQ' J 00 AA Oo0 C V0N1 +000-4 01 W �` (A 00 •� W '-• J 01 A W 69 01 A J C1 Packet Page -586- YJ o n• C N a 7 O s 2/28/2012 Item 11. F. d 'n @ fiz =pOO C)Mz n r tid 07� a3. - gym 07'0 aac9.3 o e va m o' h �ro Km Nh �' �ro �, Km 0 IQ T .� e. '� Vl 6 C<o ^ti tp C/J G (<D N (�D •17 m 3 N N N 00 J W N 00 H N � �1 H9 W O �D 00 H H H N O "� WJ C+O C0� 0C1 W OOO W W O N t D H H O P O W W J O O 69 b9 N O � A N H H A N m 6 0. 00. 69 A O H Al A .N O U Co 64 W H b H �"� O�0 69 ji O OHO H H H W O O 0 � O O ;F ;O O00 7 •fit :N U 00 C aN HH O AO J J i-O 000 � N � p fA 69 ^ N ilo N to CA O 'N N N U .n H9 A ^ O H O H ? tJl 0 U N H �D 69 OO f/� O 00 H H H al A C N W H t7 H N C O f�J N H A W O N O A 00 H H W ?�J HHH N r O U v. v. o O p N 1 N p O O O O O U to U p Q+ OO H H O •+ O O+ LA 0 m_ w Q• O U N W A O C {- N J N D1 O W A � U C A H H O VW1 Cn tpp b OOp O N O •T W 69 W O 6M H O= W5 H < N OW .Np bO 9 ? H Obi H W U H LA -1 J HO HO H A �A O O+ O Ci '� -tAp � a 01 A O d U N— O O T O+ N O C O O O.4 O N di N H r N ^ H P U J �D W J OD N W N N 00kQ C V TOO A w W O AtJ t0� H W J a op H^ W O H W W iA b9 U N NtO w O J U 0 W L i H H tO = W N WO 00 O W N W V1 O" `• tD W j N� W O N O O N � W tNle ONO 0 W pAi 01 O H it � 000 N OD •17 W W H y lHi. lli N D\ EY9 W O. W N •.!1 W O W C J O W A H H N A W (A H A N N O U J in w O� to t0 b H :O C0 W A lz N b U H H 00 O O a\ N U Go O Oo 00 J W N .60 oW J W a H 0 V T O 00 O O lz go N Packet Page -587- Cn �• CD N D 0)_ r�r�� N_ Y, N• VV11:11S Collier Count Claims and Utilization Retail Brand Retail Generic Mail Brand Mail Generic NCH AWP Ingredient Cost Scripts 2010 2010 2010 $3,984,915 $1,427,214 $1,797,815 $587,092 $2,373,879 $850,215 $1,070,987 $349,740 11,119 25,122 2,814' 3,777 $7,797,036 $4,644,821 42,832 Calculated 40.4% 40.4% 40.4% 40.4% Note: Because NCH eliminated mandatory mail order, data was adjusted to reflect average retail and mail use for other CCHCC employers Retail Brand Retail Generic Mail Brand Mail Generic Retail Brand Retail Generic Mail Brand Mail Generic Retail Brand Retail Generic Mail Brand Mail Generic Retail Brand Retail Generic Mail Brand Mail Generic School Board AWP Ingredient Cost Scripts 2010 2010 2010 $5,252,558 $3,910,336 $2,221,017 $1,578,861 $4,514,829 $1,654,313 $1,732,365 $587,664 25,121 56,756 4,680 6,957' $12,962,771 $8,489,190 93,514 Government AWP Ingredient Cost Scripts 2010 2010 2010 $3,970,356 $3,237,152 $798,628 $669,263 $3,397,477 $1,292,793 $623,630 $238,641 19,871 45,282 1,767 2,865 $8,675,399 $5,552,541 69,785 Sheriffs AWP Ingredient Cost Scripts 2010 2010 2010 $1,565,810 $1,021,614 $1,661,901 $1,116,791 $1,344,917 $419,274 $1,295,938 $392,521 6,945 15,524 3,752 4,594 $5,366,116 $3,452,649 30,815 Total AWP Ingredient Cost Scripts 2010 2010 2010 $14,773,639 $9,596,316 $6,479,361 $3,952,006 $11,631,102 $4.216,594 $4,722,941 $1,568,566 63,056 142,684 13,013 18,193 $34,801,323 $22,139,202 236.946 Claims $22,139,202 Admin Fees 0 Dispensing Fees $246,888 Rebates $936,638.10 2010 Plan Cost $21,449,451.52 Calculated % 14.0% 57.7% 22.0% 62.8% Calculated % 14.4% 60.1% 21.9% 64.3% Calculated °10 14.1% 59.0% 22.0 % 64.9% Calculated 21.3% 56.1% 27.1% 60.3% 2/28/2012 Item 11.F. Willis Packet Page -588- 2/9/2012 w�ll�s -end Assumptions Trend Brand 2013 Generic °o Inflation x:010' 2/28/2012 Item 11. F. 2010 NCH 2013 AW P Scripts 2012 2013 2014 2012 2013 2014 25,372 Retail Brand $4,184,161 $4,393,369 $4,613,038 11,230 11,342 11,455 Retail Generic $1,498,575 $1,573,504 $1,652,179 26,127 27,172 28,259 Mail Brand $1,887,705 $1,982,091 $2,081,1951 2,843 2,871 2,900 Mail Generic $616,447 $647,269 $679,6321 3,928 4,085 4,248 2/28/2012 Item 11. F. 2010 2012 2013 1 2014 2012 2013 2014 Retail Brand $5,515,185 $5,790,945 $6,080,492 25,372 25,626 25,882 Retail Generic $4,105,853 $4,311,146 $4,526,703 59,026 61,387 63,843 Mail Brand $2,332,068 $2,448,671 $2,571,105 4,727 4,774 4,822 Mail Generic $1,657,804 $1,740,694 $1,827,729 7,235 7,525 7,826 Gov 2012 2013 2014 2012 2013 2014 Retail Brand $4,168,874 $4,377,318 $4,596,183 20,070 20,270 20,473 Retail Generic $3,399,010 $3,568,960 $3,747,408 47,093 48,977 50,936 Mail Brand $838,560 $880,488 $924,512 1,785 1,803 1,821 Mail Generic $702,726 $737,862 $774,755 2,980 3,099 3,223 2/28/2012 Item 11. F. 2010 2012 2013 1 2014 2012 2013 2014 Retail Brand Retail Generic Mail Brand Mail Generic $1,644,101 $1,072,694 $1,744,997 $1,172,63011 $1,726,306 $1,126,329 $1,832,246 $1,231,262 $1,812,621 $1,182,646 $1,923,859 $1,292,825 7,014 16,145 3,790 4,778 7,085 16,791 3,827 4,969 7,155 17,462 3,866 5,168 Total 1 $36,547,4251 $38,374,4981 $40,292,9241 250,1781 257,642 265,381 2/28/2012 Item 11. F. 2010 Current Employee Count Current Member Count.a5i8 ~.2,598b 2010 Current Employee Count Current Member Count 5,237? 6 485` 2010 Current Employee Count Current Member Count :2,039;; 4,550 2010 Current Employee Count Current Member Count,"IT 12fi5 Willis Packet Page -589- 2/9/2012 2/28/2012 Item 11. F. Exhibit II Exhibit II - Analysis of Including Single Source Generic Medications in Generic Versus Brand Discounts ESI Dispensing Fee Reduction for not Including Walgreens in Network $.40 /script Three -Year Total Scripts Reduction DSBCC 261,137 $104,455 CCSO 71,653 $28,661 NCH 115,586 $46,234 CCG 207.820 $83,128 Total 656,194 $262,478 If single source drugs moved are moved from brand to generic, discount percentages drop but dollar savings is unaffected Ingredient Average % of Before AWP Cost Discount Total Retail Brand $14,773,639 $11,631,102 -21.3% 73.4% Retail Generic $9,596,316 $4,216,594 -56.1% 26.6% Total $24,369,955 $15,847,695 -35.0% 100.0% Assume single source drugs represent 5% of brand total and provide 30% discount Ingredient Average % of AWP Cost Discount Total Single Source Drugs $1,218,498 $852,948 30.0% 5.0% Ingredient Average % of Totals without Single Source Drugs AWP Cost Discount Total Retail Brand $13,555,142 $10,778,153 -20.5% 71.9% Retail Generic $9,596,316 $4,216,594 -56.1% 28.1% Total $23,151,458 $14,994,747 -35.2% 100.0% Ingredient Average % of After AWP Cost Discount Total Retail Brand $13,555,142 $10,778,153 -20.5% 68.0% Retail Generic $10,814,814 $5,069,542 -53.1% 32.0% Total $24,369,955 $15,847,695 -35.0% 100.0% Willis 11 2/9/2012 Packet Page -590- 2/28/2012 Item 111. Collier County Health Care Consortium Request for Proposal for Managed Pharmacy Services February 2011 DUE: APRIL 6.2011 Prepared by: Willis EMPLOYEE BENEFITS National Actuarial Practice 720 5T" AVENUE SOUTH, SUITE 203 NAPLES, FL 34102 239 - 659 -4500 CONTACTS: Sue Wiesing, Assistant Vice President/Account Executive Sue.wiesing awillis.com Steve Buell, Vice President/Account Executive Stephen. buellna,wiII is. corn Doug Ley, Senior Vice President/Director douglas.leyna.willis.com Willis NOTICE, This Request for Proposal is the property of Willis. All information presented in this document is proprietary and cannot be used without the express written consent of Willis. Packet Page -591- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Pharmacy Services A 00k TABLE OF CONTENTS A. BACKGROUND ......................................................................... ..............................1 B. INTENT ..................................................................................... ............................... 2 C. CONTRACT PERIOD ...................................... ............................... D. AUDIT ................. E. CLAIMS RECORD RETENTION / TRANSFER ........................... ..............................6 F. TIMETABLE ............................................................................... ..............................6 G. EXHIBITS ................................................................................. ............................... 7 H. INSURANCE REQUIREMENTS ............................................... ............................... 7 I. EVALUATION PROCESS ........................................................ ............................... 8 J. STATEMENT OF COMPLIANCE ............................................. ............................... 9 K. WILLIS REMUNERATION ........................................................ .............................10 L. VERISK AND MCKESSON DATA REQUIREMENTS .............. .............................10 M. QUESTIONNAIRE .................................................................... .............................10 EXHIBITS I. Plan Designs II. Historical cost and utilization data III. Top 50 Drug Per Pill Pricing Exhibits (to be competed my respondents) IV. Financial Terms (to be competed by respondents) V. Contract terms (to be competed by respondents) VI. Verisk and McKesson Data Layouts VII. Formulary Comparison Exhibit (to be comlpeted by respondents) M Packet Page -592- February 2011 2/28/2012 Item 115. Collier County Health Care Consortium Request for Proposal for Managed Prescription Druq Services Page 1 A. BACKGROUND The Collier County Health Care Consortium (CCHCC) is comprised of the following major Collier County employers, • Collier County Government • Collier County Sheriffs Department • District School Board of Collier County • NCH Healthcare System, Inc. This group is committed to better understand the factors that drive health care costs and pursue a partnership with select local providers. Through this partnership the CCHCC employers wish to foster the creation of a process and strategy to ensure efficient delivery of health care that is appropriate provides optimal patient outcomes and supports prudent expenditures of financial resources. The CCHCC employers have approximately 11,100 employees covered under various medical plan options that include pharmacy benefits. When spouses and children are included with employees, the total number of covered lives is in excess of 22,100. Provider network access and utilization review, case and disease management processes are provided through a partnership agreement with Community Health Partners (CHP) For three years the members of the CCHCC have collectively utilized the services of Express Scripts to manage their pharmacy benefit programs. By using a single pharmacy benefit manager (PBM) the CCHCC employers achieve the following goals: ✓ Minimize administrative costs; ✓ Maximize rebates in a thoughtful way recognizing that bigger rebates are not necessarily in the best interest of plan sponsors as large rebates stem from the use of more expense medications; ✓ Utilize a consistent formulary; ✓ Create consistent administrative processes and functions; ✓ Utilize consistent cost management processes (i.e. step therapy, generic substitution, therapeutic MAC's concurrent drug utilization management, etc.); ✓ Provide access to online interactive detailed reporting functions for Willis, CHP and other parties that may be designated; ✓ Provide access to prior authorization approval processes to CHP, members of the CCHCC and other parties as may be designated in the future; ✓ Allow regular electronic exchanges of eligibility information between the CCHCC members, their third party administrators and Community Health Partners; ✓ Partner with the CCHCC employers, CHP and Willis in the creation of innovative, custom processes designed to slow the upward trend in pharmacy costs; and ✓ Conduct educational programs for local physicians concerning pharmacy cost issues and special programs designed to improve the financial efficiency of the CCHCC employer' pharmacy programs. Packet Page -593- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 2 Of interest to the CCHCC employers and its provider partners are quality service, administrative flexibility, real time reporting, good relationships with pharmacies, administrative efficiency and transparency. B. INTENT Over the last several year the pharmacy benefits landscape has changed. The industry is consolidating while at the same time new PBMs are entering the market place. The AWP lawsuit exposed issues concerning base pricing, there has been an increased focus of the way that discounts are measured and guaranteed, what drives larger rebates and large retailers are selling select generic drugs for a flat cost of $2.00 per script and greater transparency to name a few of the issues that have emerged. Of continued interest to the members of the CCHCC is the movement toward greater "transparency" — having a full understanding of contract terms, how performance guarantees are developed /measured, disclosure of reimbursement rates, how rebates are negotiated, how they are passed or not passed back to clients, etc. Further, as more medications become available through multiple sources as patients expire, there are tremendous opportunities to manage costs within class. The same can be said for generic medications within the same therapeutic class. Given the evolving landscape, it is matter of public trust and financial stewardship to periodically conduct a market due diligence to assess the markets ability to work in collaboration with the CCHCC employers, CHP and local providers to deliver cost effective pharmacy programs and financing. The Florida Benefit Practice of Willis, in conjunction with the National Actuarial Practice, has been asked to conduct a rigorous market assessment to assess the service and financial capabilities of firms interested in responding to this Request for Proposal. The CCHCC employers recognize the benefits of jointly using a single PBM to partner with them to administer and manage the pharmacy benefits provided to employees and dependents. Therefore, only a single PBM will be selected to administer the pharmacy programs PLEASE NOTE: The unique prescription benefit design and separate accounting for each employer must be maintained. The CCHCC employers want a proposal from you incorporating how you will meet these key requirements: • Minimize administrative costs and thoughtfully maximize rebates (recognizing that bigger rebates come from more expensive medications that may not provide superior outcomes). The CCHCC is seeking full pass through of rebates with a guaranteed minimum rebate. Rebate guarantees should be based on all drugs not just those for which rebates are obtained. • Bend or eliminate trend in future years by striving for the lowest ultimate cost by delivering a transparent innovative programs that optimizes both the cost and clinical outcomes to the CCHCC and its covered employees and dependents; • Deliver a consistent formulary which carefully balances rebates and lowest net cost and is updated as appropriate with sufficient notice of changes to employers, employees and providers; Packet Page -594- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 3 • Provide monthly claims extracts as required by the Verisk and McKesson systems in use at Community Health Partners and provide Willis with access to a robust real time ad hoc and standard data reporting system. • Demonstrate the ability to provide at least the current level of cost management processes (i.e. ability to provide a therapeutic MAC for PPIs, step therapy, generic substitution, concurrent drug utilization management, OTC programs etc.); • Provide a structured program to assist CCHCC employers and CHP in addressing potential abuse or diversion of narcotic medications such as oxycodine; • Demonstrate the ability to implement new innovative programs to address opportunities that are uncovered through the ongoing analysis of both medical and pharmacy claims; • Commit to conducting onsite educational seminars and developing educational materials to CHP's participating physician providers regarding pharmacy issues and cost management programs; • Provide quarterly reporting on an individual employer and aggregate CCHCC level regarding key cost drivers, effectiveness of cost management programs and overall financial performance. You must also be willing to make changes in these reports address the needs of the CCHCC on an ongoing basis; • Provide online real time prior authorization approval processes access to CHP, members of the CCHCC and other parties as may be designated by the CCHCC employers in the future; • Provide specific communication support to reinforce current programs as well as new ones that may be implemented in the future; • Provide a seamless retail and mail order process that is friendly to both employees and physicians. Note that the CCHCC members have evaluated and will not pursue a mandatory mail order program; • Work with First Service Administrators (FSA) and Meritain Health (MH) (or newly selected) Third Party claims administrators and Community Health Partners (CHP), to provide seamless and regular electronic exchanges of eligibility information; and • CCHCC employers want to address trends where employees are increasingly dissatisfied with their medical plans because of poor and confusing communications, substandard customer service and employers are increasingly dissatisfied with a continued upward spiral in cost. Of equal concern is the perception of a deteriorating relationship between administrators and the provider community; • With the exception of the CCSO, all the employers plan designs are based on an approach where the member pays a significant percentage of the cost of medications. Therefore, it is vital that the PBM have the necessary on line and other educational tools to assist covered members in considering alternative medications that produce the same clinical outcome for them while producing lower cost to both the employer and employee. To meet its key requirements, the CCHCC employers are seeking a three -year agreement with the successful vendor. The main objectives of this are: • Employees and their dependents should perceive administration as equal to or better than the current program; • The trend in prescription drug costs should decrease, not increase; Packet Page -595- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Paqe 4 • Continue to build on and expand the collaborative approach to working in partnership with all stakeholders (employers, employees, CHP and local providers) to better manage pharmacy costs while improving patient outcome; • Work to develop methods to control costs as drugs become available generically or over -the- counter and others remain on patent — be willing to stand up to the drug manufactures and resist the "sirens" call of larger rebates; • Demonstrate processes to identify either individuals or pharmacies that are abusing the program; • Provide access to detailed information and be willing to integrate pharmacy data with medical claims data; and • Be willing to work with participants and physicians to encourage acceptance of and compliance with cost management processes. Due Date for Response This procurement process is being overseen by the DSBCC Purchasing Department in order to meet their public sector procurement requirements. • Eight 8 hard copy proposals are due by 4:30 p.m. EST on Wednesday April 6, 201 Ito the District School Board of Collier County's Purchasing Department. • Two (2) duplicate hard copy and electronic copies of this proposal must be sent to the Naples office of Willis and emailed to Douglas Ley and Sue Wiesing of Willis no later than the due date noted above. Proposals returned after the due date will not be considered. Your proposal must include the following by the stated due date: • Proposals returned after the due date will not be considered. Your proposal must include the following by the stated due date. • Both the hard copy and electronic copies of the response must be complete duplicates and include each of the following: • Section I - Signed Signature by Bidder page • Section III - Questionnaire - without reformatting • Section III - TBD o Section IV — TBD These will be interpreted as your company's proposal. Therefore, it is important that any exceptions, deviations, etc. are noted on these forms. All information contained in this Request for Proposal is confidential and proprietary to the extent permitted under Florida Public Records Law. This information must be used solely for the purpose of responding to the CCHCC employers Request for Proposal. The proposal is binding during the 180 day period following the due date. A proposal may not be withdrawn or changed during this period without written agreement from Willis and the CCHCC employers. Packet Page -596- 1 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 5 Hard copies of the response for the DSBCC Purchasing Department must be delivered to the following address by the due date: District School Board of Collier County Administrative Offices Attention: Victoria White 5775 Osceola Trail Naples, Florida 34109 No Solicitation This process is being overseen by the purchasing department of the DSBCC. As outlined, a formal selection process is being followed. Vendors are not to contact any members of the administration, employees, employee organizations or Board members regarding this RFP. All questions are to be directed to Willis as noted below. The CCHCC employers may, at its option, hold a bidders conference to further answer questions to this RFP. Any responses to questions will be shared with all prospective bidders. The CCSO will be conducting a separate RPF process though it's Purchasing Department. That RFP will provide specific guidelines concerning contacting the CCSO for questions regarding their RFP. Any vendor who discusses this RFP with administration, employees, employee organizations, or Board members unless expressly authorized in writing the respective entity will be disqualified from consideration. Contacts Willis is assisting the CCHCC employers with this effort. Please note e-mail addresses for electronic copies of the responses. All questions should be directed to: Sue Wiesing Douglas J. Ley Assistant Vice President/Account Senior Vice President / Director Executive National Actuarial Practice Sue.wiesing(a.willis.com Willis Employee Benefits 330 East Kilbourn Avenue Suite 1400 or Milwaukee, Wisconsin 53202 (414) 203 -5248 Steve Buell Vice President/Account Executive or Willis of Florida 720 5th Avenue South 720 5th Avenue South Suite 203 Suite 203 Naples Florida 34102 Naples Florida 34102 (239) 659 -4500 ext 5 (239) 659 -4500 ext 6 Stephen. buell(cwillis.com douglas.ley(a.willis.com Packet Page -597- 2/28/2012 Item 11. F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Paqe 6 C. CONTRACT PERIOD Your terms must be guaranteed from January 1, 2012 through December 31, 2014. The ability to extend beyond this contract period with contractual maximums would be looked upon favorably. D. AUDIT You must agree to allow CCHCC members individually or as a group the rights to audit the financial and non- financial records of the prescription drug administrator and its agents as they relate to the administration of their programs whenever deemed appropriate. Such audits may be performed by CCHCC personnel or outside auditors selected by the CCHCC employers. E. CLAIMS RECORD RETENTION/TRANSFER The claims administrator will be required to maintain all pertinent claim records for seven years from the date of each claim payment. In the event of termination, the prescription drug administrator must agree to transfer to the Members of the CCHCC (or another party as designated by the CCHCC employers within thirty (30) days notification, all required data and records necessary to administer the plans. This data would include, but not be limited to, the following: List of covered employees and dependents. Preauthorization information for specific medicines. w- Records or hard copy of claims transaction data as designated by the CCHCC employers. ,v- No fees required to retrieve data less than 2 years old. F. TIMETABLE Distribution of RFP 3/14/2011 Proposals Due to Willis and DSBCC Purchasing Department 4/6/2011 Proposal Analysis 4/7/11 - 4/19/2011 Selection of Finalists 4/19/2011 Interviews 4/27- 29/2011 Discussion of Contract Terms 5/1- 19/2011 Notification of Final Decision 5/20/2008 Program Implementation 6/1/2011- 12/31/2011 Program Becomes Effective 1/1/2011 Packet Page -598- i� 2/28/2012 Item 115. Collier County Health Care Consortium Request for proposal for Maria ed prescAn floe Drug Services Page 7 Upon selection of a new vendor, it is expected that contracts, necessary administrative forms, administrative manual, employee communications, deductible transfer data and other materials will be prepared as quickly as reasonably possible. The chosen administrator will be expected to bear the cost of installation of appropriate administrative systems, contract preparation, billing, network enhancements, related administrative manuals, enrollment forms, and communication with employees and providers. G. EXHIBITS There are exhibits included with this RFP. You must complete each exhibit and provide these completed exhibits in your response. The following exhibits included with this RFP need to be completed: Exhibit III Top 50 Pricing Exhibit IV Financial Terms Exhibit V Contract Terms Exhibit VII Formulary Comparison Note: Please carefully review question C9 as it contains important information regarding your options to complete Exhibits II and III. H. INSURANCE REQUIREMENTS Please confirm you maintain the following: • Professional liability insuring against vendor's errors or omissions in the performance of the services outlined in this RFP in an amount of not less than $2,000,000 per claim /aggregate. • Workers Compensation Insurance with statutory limits covering all employees in accordance with the laws of the country, state, province or territory exercising jurisdiction over the employee. • Employer's Liability Insurance with a minimum limit of $1,000,000 per occurrence (per employee / per disease / policy limit) • Carriers furnishing Workers Compensation and Employer's Liability Insurance shall be required to waive all rights of subrogation against the CCHCC Members and its officers, directors, stockholders, employees, subsidiaries and agents. • Commercial general liability insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate. • Coverage against theft or other misappropriation of funds, including Client's funds / property, by whatever means for the vendor, its directors, officers, partners, shareholders, employees or agents. • Automobile Liability Insurance covering the use of all owned, non -owned and hired automobiles with a minimum combined single limit of $1,000,000 per occurrence for bodily injury and property damage liability. • Network Security and Privacy in the amount of $5,000,000 per occurrence /aggregate. • Upon execution of this agreement, and at any time upon request, Client shall submit to the CCHCC Members a certificate(s) of insurance reflecting the coverages listed above are in force. Said Packet Page -599- Collier County Health Care Consortium 2/28/2012 Item 11. F. Request for Proposal for Managed Prescription Dn1g Services Pa e 8 certificate shall state that not less than thirty (30) days prior written notice shall be given to the CCHCC Members in the event of a cancellation of coverage. The Commercial General Liability and Automobile Liability policies shall contain endorsements naming the CCHCC Members as an additional insured. All policies required there under shall be written by licensed insurers with A. M. Best ratings of at least A -VII. In the event the vendor will utilize subcontractors to perform any of the services required in this RFP, the vendor shall require that the sub contractor comply with the above insurance requirements. A certificate of insurance should be provided to evidence that the client has the appropriate coverages in place. EVALUATION PROCESS Willis is assisting the members of the CCHCC with several areas related to this RFP process. For example, Willis has assisted the members in developing this RFP, as well as identifying critical selection criteria. A final recommendation and selection will be made via the following process. The members of the CCHCC have identified a project selection team. The project selection team is made up of representatives appointed from each member organization. This team, with the technical support and guidance of Willis will be responsible for providing the necessary evaluations of potential vendors responding to this RFP. The analysis and selection will adhere to the following steps: 1. Each member of the evaluation team will review and score the written responses to the RFP according to a predetermined scoring tool. 2. Willis will perform an evaluation of the financial terms and provide a summarization of the qualitative aspects of the RFP. 3. Willis will tabulate scores to the written responses to the RFP. 4. The financial terms of your response will be evaluated by a process where the lowest vendor overall financially will receive the highest possible score. Scores for the remaining vendors will be determined utilizing the following formula: Score = (number responding x [lowest cost] / vendor cost) 5. Based on a composite evaluation of the financial terms and the project team's evaluation of the written responses to this RFP, two or more finalists will be selected. 6. Finalists will be expected to travel to Naples, Florida to be interviewed. Additionally, representatives of the CCHCC employers may want to tour the PBM operations. During these tours, finalists will be subjected to a consistent set of predetermined questions. Each member of the evaluation team will independently score response to these questions. 7. A final recommendation and selection will be based on the weighted scores of the evaluation team with respect to the following: b Scores regarding written responses to the proposal Packet Page -600- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 9 * Scores regarding financial response * Scores regarding finalist interviews During the entire process, Willis will provide technical support, as well as objective tabulation of the responses and assistance in drafting a collective recommendation for each entities board or decision makers. This RFP process and the terms you provide are to be based on the assumption that all of the entities that make up the CCHCC contracting with your organization collectively for the contract term. Any and all entities reserve the right independently or collectively to not contract with the respondent. If any one entity elects not to participate, your proposal becomes null and void. The CCHCC employers reserve the right to modify their final section process, to modify the factors for consideration and make their selection in the manner they choose. STATEMENT OF COMPLIANCE In preparing your proposal, you must adhere to the specifications outlined in this request for proposal document. In addition, the questionnaire must be responded to fully and completely. Respondents are advised that each and every question in this RFP must be completely answered or your response will be considered non responsive may be excluded from further consideration. In addition, the responses to this RFP will be incorporate by reference into the contract with the CCHCC employers. In the event your proposal deviates from the requested specifications or you are unable to complete portions of the questionnaire for any reason, you are requested to clearly identify such deviations and omissions in your proposal. All deviations from specifications outlined in this request for proposal document must be clearly outlined in your proposal to the CCHCC employers will assume you comply fully with all proposal requirements. Further, the members of the CCHCC are committed to meeting all State and Federal laws and regulations providing for equal employment opportunity. The CCHCC members will refuse to contract with any firm that has not evidenced its own commitment as an equal opportunity employer. The respondent agrees to provide such evidence to the CCHCC members upon request. We acknowledge receipt of this RFP and agree to the requirements and our responses except as listed below. Name Date Signature Title Exceptions: Packet Page -601- 2/28/2012 Item 111. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Paqe 10 K. L. Please attach additional sheets if necessary. WILLIS REMUNERATION To ensure a level playing field for all prospective vendors all proposals should be quoted NET of any commission or fees payable to Willis or any other third party. If, through the nature of your agreement with other parties or PBMs you are required to paying fees or commissions to parties other than Willis those amounts must be disclosed as a separate line item and clearly stated as such in your response. Please delete all commissions or payments from your quoted core administrative fees and note them as a separate line item. . The Willis consulting and brokerage service agreements with certain CCHCC employers allow for a per script fee to be collected and paid to Willis with the consent of those clients. Post selection, you will be advised of those fees and asked to add them to your financial terms. Please confirm you ability to comply with this requirement. VERISK AND MCKESSON DATA REQUIREMENTS Through a master agreement with CHP the CCHCC employers have ha access to a medical and pharmacy claim data aggregator known as D2Verisk. This is an Internet -based data analysis tool that enables the CHP, the CCHCC employers and Willis to identify potential high -cost claims and areas of high utilization through the use of data - driven, fact -based research, and develop targeted intervention programs. CHP uses the McKesson System to support is utilization management processes. The system consolidates claim information at the diagnosis and procedure code levels and delivers a series of online interactive reports via a secure web application. Vendors must agree to provide data at their expenses on a monthly basis in the format provided. QUESTIONNAIRE A. Eligibility Al A full eligibility file will be sent to you daily or weekly. Please confirm that this is acceptable. File layouts can be provided upon request. Have you had experience with file transfers from First Service Administrators, Meritain and enrollment firms such at Hodges Mace and eBenefits? A2 Can you accept faxes of employee terminations so that they can be promptly handled to minimize program use by employees and dependents after coverage is terminated? Alternatively will you allow CCHCC members online access to make these changes immediately? How will you reconcile changes made on line with files received from the TPAs? A3 As with any eligibility process there is the possibility for files to become out of sync. How do you propose to address this? Packet Page -602- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Druq Services Page 11 A4 When in 2011 would you need to receive the eligibility file in order to have identification cards delivered prior to January 1, 2012 to each CCHCC employer? B. Performance Guarantees B1 Describe in detail performance guarantees you are willing to include in the contract regarding the implementation. Please be specific regarding penalties, incentives, and ways to monitor these performance guarantees. The following are required guarantees. Please confirm that you agree to each and the penalty associated with a failure to meet the required measures: o Program implemented and ID cards distributed by December 23, 2011 • Acceptable monthly claims data extracts provided to CHP, Verisk and Willis by the 15th of the close of each month for prior month. • Generic efficiency rates for 2012, 2013 and 2014 by client (Generic Fill Rate GFR) • The date by which quarterly and year end reports will be delivered • Discount guarantees for the flowing areas: 1. Retail /Generic 2. Retail /Brand 3. Retail /Specialty 4. Mail /Generic 5. Mail /Brand 6. Mail /Specialty Mail order processing turn around time B2 For the above areas where applicable, clearly define the assumptions you will use in calculating your performance against the guarantees. For example: • Are discounts entered on aggregate minimum post -AWP Settlement AWP basis: • Do composite discounts assume that zero - balance due claims are calculated at actual ingredient cost? Are any medications excluded? Are zero - balance due claims valued at a 100% discount? Do composite discounts include or exclude U &C, compound, and OTC claims. Will composite discounts contain any shared savings elements — assume? Will discounts in excess of guarantees accrue to the benefit of CCHCC members? Do your composite generic discounts guarantees exclude any specific generic drugs such as single source generics? B3 If Generic Fill Rate, GFR, performance falls short of guarantees, PBM will credit the shortfall on a dollar- for - dollar basis. How will the performance against the goal be calculated? Will you do a separate calculation for retail and mail? If you miss the guarantee, how will you calculate what is due the CCHCC member? B4 Please outline the conditions that will govern the Drug Mix performance guarantee. Packet Page -603- 2/28/2012 Item 111. Collier County Health Care Consortium Request for Proposal for Managed Prescription Druq Services Page 12 • When will these performance guarantees be settled? B5 Many times single source generic medications may not be classified as generic. Please fully disclose the instances in which this may occur and how this is addressed in your reporting of performance as compared to guarantees. B6 Are you willing to offer a guarantee not to exceed average drug cost net of specialty medications for 2012, 2013 and 2014? If yes, please include this with pricing proposal and outline how this would work. Here is a brief example of what the CCHCC is interested in: PBM is pleased to offer the CCHCC members the following guarantee. PBM guarantees that [name of CCHCC member] contract year one (2012) pharmacy drug cost will not exceed $xx.xx Der claim or emolovee. PBM guarantees that [name of CCHCC member] contract year two (2013) pharmacy drug cost will not exceed Lxx xx per claim or employee. PBMguarantees that [name of CCHCC member] contract year three (2014) pharmacy drug cost will not exceed $xxxx per claim or emolovee. Details Provide details of how this will be settled Conditions Provide any limitations associated with this guarantee. B7 In addition to the required guarantees outlined above, please outline other guarantees you believe are appropriate and the financial penalties you will associate with a failure to reach those goals. Please note that each must stand alone and cannot be offset by exceeding the goals in other areas. C. Price and Utilization Management Processes FOR EACH QUESTION, PLEASE DETAIL YOUR RESPONSE SEPARATELY FOR THE RETAIL AND MAIL ORDER PROGRAMS WHERE PROCESSES MAY DIFFER. C1 Please describe your ability to implement a. proactive therapeutic alternative program. Under this program, after the first prescription is filled, would you seek authorization from the prescribing physician to dispense a therapeutically equivalent prescription drug on the formulary in place of a more expensive non - formulary or formulary drug? C2 The CCHCC employers have implemented a therapeutic MAC process. This process applies the generic copayment and limits to reimbursement after the copayment for all medications in a Packet Page -604- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Druq Services Page 13 defined class to a predetermined maximum allowable cost (MAC). If the members cost is higher, they pay the difference. The current program applies to Proton Pump Inhibitors (PPIs). If the member wanted a brand name equivalent medication such as Nexium, Protonix or Acifex, payment is limited to the "MAC" amount for Omeprazole. For individuals meeting certain clinical criteria, CHP would have access to your system to allow the patient to access Prevacid or Nexium at the brand name copayment. Please describe whether your system would support this approach and how you would see it working. This may be expanded to other classes of medications in the future C3 Describe your approach to developing your Maximum Allowable Cost (MAC) program for generics. How many drugs are on your MAC list? What is the effective discount that your MAC pricing yields off of AWP? Do you bundle generics with rebate negotiations with manufacturers? How does this affect you MAC pricing? In addition, please also address the following: o If the pharmacy bills less than the MAC price, is the client billed for the lesser amount or are they billed at the MAC level o If the copayment is less than the MAC price, what is the cost to the employee and then what is the employer billed? C5 How often do you update your MAC list in response to the changes in manufacturer prices and the number of firms dispensing a particular drug? How do you control repackaging to prevent a manufacturer from creating its own AWP to circumvent MAC pricing? C6 Do you enforce any MAC programs for name brand drugs based on a common purchase size requirement? C7 Please describe in detail how participating pharmacists are paid under your program. How do you agreements differ from chain to chain compared to independents? What is the typical contract term with each chain? Are the terms of the contract with major chains the same nationally or does it differ by region? C8 Transparency of drug costs, rebates and administrative fees is important to the CCHCC. They have no problem paying an equitable fee for services rendered. However, they want to know what and how you are being paid behind the scenes. Please describe how your approach will provide verifiable transparency in fees, rebates and pricing. A report showing rebates for each client each quarter does not necessarily mean transparency. How will you prove the CCHCC is getting full pass through of rebates? Address your feelings about transparency; pass through pricing and traditional pricing approaches. The CCHCC is seeking full pass through with a guaranteed floor. If you have not quoted a separate fee for administration, how are you getting compensated? C9 Please carefully review the plan design data in Exhibit I and the utilization data in Exhibit II Exhibit I and II contains files and data you will need upon which to base your quote. Exhibit III contains abridged files. Please provide your per pill pricing as of March 1St had the terms you are quoting for 2012 been in force. In other words you apply your discount terms to the current base price used as of March 1St 2011. The retail per pill costs should reflect a weighted average of the current claims distribution between CVS and Walgreens for your current SW Florida Packet Page -605- Collier County Health Care Consortium 2/28/2012 Item 111. _Request for Proposal for Managed Prescription Drug Services Paqe 14 book of business. Please indicate whether your pricing with these firms applies to the full state of Florida or differs by region. For mail order apply the proposed terms to your mail per pill mail order pricing as of March 1, 2011. Note: If you believe that a narrow network will provide better terms, please complete duplicate exhibits III and IV labeled narrow network and provide the details of that narrow network in Collier and Lee Counties as compared to your standard network Is your pricing for other vendors such as Wal -Mart and Publics the same as for CVS and Walgreens or different.? C10 The CCHCC used Cura Scrpts a subsidiary of Express Scripts to provide management of specialty medications. This is the fastesr growing area of pharmacy spend for the CCHCC. Please describe your approach to helping CCHCC members address cost trends in this area. D. Vendor Information D1 Please confirm your organization's willingness to allow the CCHCC employers the right to independently audit your claims processing unit. D2 Describe the history, organization and ownership of your company. D3 Describe your malpractice and errors and omissions coverage for the mail order program. In addition, provide a copy of the Certificate of Insurance for your Errors and Omissions coverage and all stated insurance requirements. E. Claims Processing, Cost Management Edits and Customer Service E1 Describe the procedure network pharmacists follow to collect proper co -pays and process claims in routine circumstances. E2 Describe the options available to collect co- payments from members under the mail order program when the co- payment is a percent of the cost. E3 Please detail common program edits. For example, does the program have a computer system linking, on a real time basis, the following edits? a. "Too soon" refills b. Duplicate prescriptions C. Number of refills d. Day's supply e. Concomitant therapies E4 Describe your drug utilization review procedures (DUR). Include a list of the criteria used in the DUR evaluation. How do you act on problems uncovered through DUR? Packet Page -606- 2/28/2012 Item 11.F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Druq Services Page 15 E5 Please describe the procedures followed if there is a problem accessing the computer network system. Discuss situations where pharmacists have been unable to access the system and the steps you have taken to ensure such situations will not be repeated. E6 How many times have pharmacists been unable to access the system in the last 12 months? How have you dealt with it? E7 What are your customer service hours? Are pharmacists available during that time? Provide information for both your retail and mail order services. Please provide information regarding the information that is available to plan members through your member portal web site to help them manage their costs; understand the medications they are taking, etc. E8 Describe your capabilities to administer coordination of benefits. E9 How do you monitor participant satisfaction with your services? E10 Will you make a representative available to support the members of the CCHCC during employee meetings to present the new program? Will you attend an annual benefit fair? E11 Provide samples of the communication materials you would mail to participants explaining the new program. E12 Please evaluate how well your pharmacy network covers the Collier County area. Are you willing to pursue adding pharmacies to your provider network if you are selected as the vendor? Please indicate how successful you have been in upgrading your network for specific clients in the past. Do you have Internet access to your pharmacy directory? Is the Harrington Pharmacy a part of your network in Naples? E13 Describe your ability to provide claims history extracts to third party administrator's and utilization review firms so data can be mined and integrated data reporting provided. E14 Describe how participants access the mail order pharmacy. Outline the documentation that must be submitted, how prescriptions are filled, and anticipated turnaround time, including shipping. Can physicians phone prescriptions to your mail order facility? E15 There have been documented cases of abuse and resale of narcotic medications within one of the CCHCC employers. How will you detect, act on and prevent such abuses? F. Data Reporting and Access F1 Please describe the systems you will utilize and show how you will provide online real time access to utilization data for the CCHCC employers, Willis and CHP to support analysis and input to decision support. Can Willis, CHP and others as designated by the CCHCC members have direct access to this system or will they need to work through and account manager? Lack of direct access will not be viewed favorability. F2 Please provide a sample of your standard utilization reports both on line and paper. Packet Page -607- Collier County Health Care Consortium 2/28/2012 Item 11. F. Request for Proposal for Managed Prescription Drug Services Page 16 F3 Please outline the nature of the ad hoc reporting system you can make available to Willis and Community Health Partners to support its reporting needs. F4 Please describe how you will provide the CCHCC employers, in total and individually, with access to a pharmacist to assist with data analysis, plan management and decision - making. F5 CHP needs access to a reporting system to support monitoring physician prescribing patterns. This must be on line and physician specific. Please describe the capabilities you have in this area to support CHP in this area. Provide samples of the reports that can be generated from the system. F6 CHP and Willis works with a medical claim data aggregator known as Verisk an Internet -based data analysis tool that enables the clients to identify potential high -cost claims and areas of high utilization through the use of data - driven, fact -based research, and to develop targeted intervention programs and monitor results. Community Health Partners also works with the McKesson system to support its utilization management programs. F7 Please confirm that you will be able to accept outstanding pre - authorization orders from CHP or the incumbent PBM to ensure continuation of care where applicable. Appendix VII contains details concerning the data extracts needed for these systems. Please confirm that you can provide the necessary data monthly to support the Verisk and McKesson systems. G. Additional Information G1 In your response, please include the following information: • Copies of your standard prepaid claim submission envelopes, brochures, announcement letters, and educational materials that will accompany identification cards. • A copy of your proposed contract. • Your standard utilization and expense reports, plus a description of each report. • Copies of your provider directories for Collier and Lee Counties for the network you propose to use and your narrow network if quoted? G2 Please confirm that you are able to administer the current plan designs outlined in Exhibit I. G3 What is your source for post AWP pricing? Why did you select that source? How often is it updated? G4 Please be advised and confirm your understanding that all information in your response and information concerning an ongoing business relationship between the parties is subject to the Florida Public Records Law. Packet Page -608- 2/28/2012 Item 11. F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 17 G5 Please describe your approach to formulary development. Please see Exhibit A which outlines the current medications on the Express Scripts formulary for select medications. Please note if the medication is on your formulary and if not what medications are on your formulary for that class of medications. G6 What is your firm doing in the area of behavioral research and communications that focus on therapy continuance, how people make decisions to change a course of therapy, view generic medications etc? G7 What additional member education services can you offer that help make people better consumers and bend trend? Packet Page -609- 2/28/2012 Item 11. F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 18 EXHIBIT I — PLAN DESIGNS District School Board of Collier County Drugs Retail Mail Deductible $150/$300 (combined with retail) Generic 80% 80% Preferred 80% 80% Non - preferred 60% 60% Out of Pocket Maximum Generic Requirement Member pays brand name co -pay Same as retail plus difference in cost between brand generic drug Collier County Government Drugs Retail Mail Deductible $150 $150 Generic 80% 80% Preferred 80% 80% Non - preferred 60% 60% Out of Pocket Maximum $450/$900 (combined with retail) Generic Requirement Member pays brand name co -pay plus difference in cost between brand generic drug Collier County Sheriffs Office Drugs Basic Plan Retail Deductible $0 Generic $7 Preferred $14 Non - preferred $21 Out of Pocket Maximum $1,500 / $3,000 Generic Requirement Member pays brand name co- pay plus difference in cost between brand generic drug Drugs Mail Order Deductible Generic $10 Preferred $20 Non - preferred $30 Out of Pocket Maximum Standard Plan Retail $0 $7 $14 $21 $1,250 / $2,500 Member pays brand name co -pay plus difference in cost between brand generic drug Mail Order $10 $20 $30 Mail order out of pocket combined with retail. Packet Page -610- Premium Plan Retail $0 $7 $14 $21 $750 / $1,500 Member pays brand name co -pay plus difference in cost between brand generic drug Mail Order $10 $20 $30 2/28/2012 Item 11. F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 19 NCH Healthcare System Drugs Deductible Generic Preferred Non - preferred Out of Pocket Maximum Generic Requirement EXHIBIT I — PLAN DESIGNS (continued) Retail $75/$150 80 %; minimum copay $10 80 %; minimum copay $25 50 %; minimum copay $40 None Member pays brand name co -pay plus difference in cost between brand generic drug Mail (combined with retail) 3xPercent of 3xCopay 3xPercent of 3xCopay 3xPercent of 3xCopay None EXHIBIT II — Historical Utilization Data (See Attachments) EXHIBIT III — Pricing Exhibits Per Pill Prices (See Attachments) Packet Page -611- 2/28/2012 Item 11. F. Collier County Health Care Consortium Request for Proposal for Managed Prescripfion Druq Seivlces Page 20 EXHIBIT IV — Financial Terms PBM Name: Pricing Approach: 2012 Retail Administrative fee per employee per month Administrative fee per claim Dispensing fee a. Brand legend b. Generic legend c. Compounded drugs d. Non - legend e. Speciality Basis of claim payment to retail pharmacy - -- (% off AWP)* a. Brand legend b. Generic (exclude single source) c. Compounded drugs d. Non - legend e. Speciality 2013 2014 *If your claim payment to pharmacies is other than a percent off AWP, please describe your approach and estimate what the expected savings off AWP will be. Rebates 2012 2013 2014 Minimum Guaranteed Rebate for all Retail Scripts along with full pass through Implementation Credit Please confirm that you are quoting full pass through of rebates and a minimum guarantee. Does your rebate calculation exclude or include zero pay claims? What do you define as zero pay claims? If you are willing to guaranteed costs over the three year as referenced on page 10 of this RFP, please provide the cost Packet Page -612- 2/28/2012 Item 11. F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 21 EXHIBIT IV— CONTINUED 2012 2013 2014 Other Fees - Please Specify* *List each type of fee (e.g., ID cards, data reports, toll -free lines, concurrent drug utilization reviews, etc.) Packet Page -613- 2/28/2012 Item 11. F. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Pape 22 EXHIBIT IV— CONTINUED PBM Name: Pricing Approach: 2012 2013 2014 Mail Order Administrative fee per employee per month Administrative fee per claim Dispensing fee a. Brand legend b. Generic legend c. Compounded drugs d. Non - legend e. Specialty Basis of claim payment to retail pharmacy (% off AWP)* f. Brand legend g. Generic h. Compounded drugs i. Non - legend j. Specialty *If your claim payment to pharmacies is other than a percent off AWP, please describe your approach and estimate what the expected savings off AWP will be. Rebates 2012 2013 2014 Minimum Guaranteed Rebate for all mail order Scripts Indicate whether this is a guarantee of estimated amount. If estimated indicate what portion of the rebate you will retain versus pass back to CCHCC members Please confirm that you are quoting full pass through of rebates and a minimum guarantee. Does your rebate calculation exclude or include zero pay claims? What do you define as zero pay claims? Please confirm that you are quoting full pass through of rebates and a minimum guarantee. Does your rebate calculation exclude or include zero pay claims? What do you define as zero pay claims? If you are willing to guaranteed costs over the three year as referenced on page 10 of this RFP, please provide the cost Packet Page -614- 2/28/2012 Item 111. Collier County Health Care Consortium Request for Proposal for Managed Prescription Drug Services Page 23 EXHIBIT V — Contract Terms There is considerable variance in contract terms between PBMs that affect the terms quoted. Please note how your proposed contact with the CCHCC members addresses each of these items. Further please comment on why your agreement is structured the way it is. How do you define each of the following? 1. The "Adjudicated Dispensing Fee 2. The "Adjudicated Ingredient Cost 3. The "Average Wholesale Price" or "AWP" 4. A "Brand" claim 5. A "Covered Drug(s)" 6. A "Dispense As Written" or "DAW" claim 7. A "Generic" claim 8. The "Ingredient Cost" of a claim 9. "MAC" or "Maximum Allowable Cost" 10. A "Member's Copayment" 11. A "Paid" claim. 12. A claim's "Sales Tax" 13. "Usual and Customary" or "U &C" Packet Page -615-