HomeMy WebLinkAbout25D - AGMT - DISCOUNT PHARMACY CARD PRGMREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
OCTOBER 3, 2011
TITLE:
AGREEMENT WITH INFORMED RX TO
PROVIDE A DISCOUNT PHARMACY CARD
PROGRAM
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 1" Reading
? Ordinance on 2I'd Reading
? Implementing Resolution
? Set Public Hearing For_
CONTINUED TO
FILE NUMBER
Authorize the City Manager and Clerk of the Council to execute the attached agreement with
Informed Rx to provide a discount pharmacy card program for the City of Santa Ana for a two-year
period, subject to non-substantive changes approved by the City Manager and City Attorney.
DISCUSSION
The growing cost of medical care is one of our nation's most pressing social, medical and
economic challenges. Millions of Americans struggle to afford the medications they need,
frequently forgoing them due to price. While the focus is often on senior citizens, the high cost of
prescription drugs is a daunting challenge for Americans of all ages, particularly those who are
uninsured. A half-million Orange County residents lack health insurance, according to a U.S.
Census Bureau survey released in September 2009. The US Census Bureau estimates that 32.7%
of Santa Ana's 357,000 residents are uninsured.
Through this agreement Informed Rx will develop and maintain a comprehensive pharmacy
network to consistently deliver discounted prescription drug services to individuals and families that
participate in the program. The objectives of the program are to 1) save community members
money on medications, and 2) provide an additional revenue source for the City that will be used to
discount health and fitness related classes at our recreation centers. The program primarily
benefits those with no other form of health insurance. All funds needed to support the program will
come from the pharmaceutical industry. No City funds will be used to support the program and no
City staff will be used to run the program.
The Parks, Recreation and Community Services Agency presented the Discount Pharmacy Card
program to the Board of Recreation and Parks on March 23, 2011, and the Parks, Recreation,
Education and Youth (PREY) Council Committee on March 31, 2011 and both the Board and the
Committee recommended approval of the proposed program. The City Council approved the
release of the RFP on April 4, 2011.
25D-1
Informed Rx Agreement
October 3, 2011
Page 2
On May 20, 2011, Requests for Proposals (RFPs) were issued to companies soliciting proposals
for a discount pharmacy card program. A pre-proposal conference was conducted on June 7,
2011 and three vendors submitted proposals for consideration. The Discount Pharmacy Card
Group, Informed Rx, and United Networks of America each submitted proposals for review. A four
member evaluation committee consisting of representatives from PRCSA Administration, Library,
Recreation, and CDA evaluated and rated the four proposals.
The proposals were evaluated based on the vendor's Responsiveness to the RFP (30%),
Experience of Firm and Personnel (30%), and Past Performance on similar contracts (40%). The
results of the evaluation process are as follows.
Vendor Score
Informed Rx 370
United Networks of America 331
The Discount Pharmacy Card Group 282
Informed Rx was rated highest, scoring 370 out of a maximum 400 points. United Networks of
America scored 330, and The Discount Pharmacy Card Group scored 282 points. The evaluation
committee rated Informed Rx the highest as a result of the quality of their proposal and the
company's experience with similar public sector programs.
The program will be available to all Santa Ana community members - individuals who live, work
and visit Santa Ana will be eligible. The agreement will have a two-year term and will include a
provision that allows the City to extend the agreement for two additional two-year terms. An
estimated $20,000 in annual revenue will be generated to supplement healthy leisure class
programming.
FISCAL IMPACT
Funds for this agreement will be deposited in the PRCSA Special Fees and Donations revenue
account (no. 02213002 57010).
APPROVED AS TO FUNDS AND ACCOUNT:
Gerardo Mouet,
Executive Direct
Parks, Recreation and
Community Services Agency
Francisco Gutierrez,
Executive Director
Finance and Management Services Agency
2501-2
DISCOUNT CARD CLIENT SERVICES AGREEMENT
BETWEEN
INFORMEDRX, INC.
AND
THE CITY OF SANTA ANA
This Client Services Agreement (this "Agreement") is entered on between InformedRx, Inc. ("IRx") a
Delaware corporation, and the City of Santa Ana ("Client"), a municipal corporation and charter city organized
under the constitution and laws of the State of California, each a "Party" and together the "Parties".
Defined terms used throughout this Agreement are provided in Exhibit C attached hereto and incorporated herein by
reference.
The Parties agree:
1. Obligations of IRx.
(a) Prescription Drug Card Services. IRx shall provide "Prescription Drug Card Services", as set
forth in IRx Proposal for Pharmacy Benefit Management Services, dated July 12, 2011, attached hereto and
incorporated by this reference, through which individuals may utilize identification cards entitling them and their
dependents access to contracted, discount pricing for prescription drugs and drug products dispensed at participating
pharmacies on or after the Activation Date. Individuals will be responsible for proper co-payment.
(b) Retail Participating Pharmacy Network.
(i) National Network. IRx will work with subcontractor, ParamountRx to provide a national
network of Participating Pharmacies ("National Network") to provide Prescription Drug Card Services to Members.
(ii) Customer Service for Participating Pharmacies and Provider Inquiries. IRx will provide a
call center telephone line available to all Participating Pharmacies 24-hours per day, 7 days per week.
(c) Mail Service Pharmacy. IRx shall provide the following services from its mail service pharmacy:
(i) receive prescriptions from Members via U.S. mail or commercial carrier, facsimile or
telephone at an address or phone number as specified by IRx from time to time, subject to and in accordance with
the Plan Design Document.
(ii) fill prescriptions during normal business hours, subject to the professional judgment of the
dispensing pharmacist, provided that the prescription is accompanied by the correct copay, deductible, or coinsurance
amount as applicable;
(iii)., -provide Members toll-free telephone access to a pharmacist and customer service
representative;
(iv) provide to Client for review, any promotional materials that explain to Members how to use
the mail service program, as well as any other materials Members may require to begin using the mail service
program. At the direction of Client, IRx shall make available or distribute, upon request, mutually agreed upon
standard materials to Members at no additional cost. Client will be responsible for all costs associated with the
distribution of custom materials to Members;
(v) ship all prescription orders to Members via U.S. Postal Service or other appropriate carrier to
the address provided by Client and/or the Member, as long as such addresses are located in the United States; and
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(d) Client and Member Services.
(i) Account Management. IRx, or its subcontractor, shall provide trained, experienced account
service resources to serve as liaison between Client and IRx for the purpose of facilitating operational activities,
resolving issues, and providing consultative support. Account management support includes scheduling conference
calls to monitor and discuss outstanding priorities. Account management staff will act as the primary contact to
Client after the implementation process is completed.
(ii) Member Customer Service. IRx shall make available trained, experienced Member
Customer Service representatives to provide Eligible Members with information regarding pharmacy locations,
eligibility, claims status and general information regarding their Prescription Drug Card Services. Member
Customer Service is available 24 hours a day, 7 days a week, 365 days a year.
(e) Payment for Discount Card Program. IRx shall make payments to Client in the form of a single
check each month for compensable Claims under this Agreement.* Payments will occur thirty (30) days following
the end of each month. The first payment will be due on and continue each month thereafter until such time
as IRx no longer processes any Claims under this Agreement. IRx's payments made in any given month shall be
calculated by taking the sum of $1.50 times the number of compensable retail claims during the prior month plus
$1.50 times the number of compensable mail Claims for the prior month. (For example, if there were 100 retail
compensable Claims and 50 mail compensable Claims during the month of , 20 then the payment due
on would equal $ [(100 x $ ) + (50 x $ )].) Delinquent payments will incur late interest
charges at the rate equal to the lesser of one and one-half percent (I'/z%) per month or the highest rate allowed by
law, pro-rated on a daily basis for each day the payment is late. Unless otherwise directed by Client, IRx will send
monthly payments to:
Parks, Recreation and Community Services Administration
Robert Carroll
26 Civic Center Plaza (M-75) Santa Ana CA 92702
Under no circumstances will IRx pay any fees or other payments on Claims where no Processing Fee has been
received by IRx.
* Subcontract service providers, brokers/consultants/administrators, and IRx may also be receiving/
retaining a fee in connection with compensable Claims hereunder.
Client Responsibilities.
(a) Monthly Reports for Discount Card Program. IRx shall provide Client and, upon request, its
designated representatives with a monthly report electronically, which shall include utilization data showing generic
and brand utilization, and U&C breakdown of prescription drug use amongst Members. Such reports will not
include any reference to individual Members or contain Patient Health Information as defined under HIPAA.
(b) Non-pa went. If a Member fails to meet any co-payment obligations at the point of sale, the Member
will be unable to utilize Prescription Drug Card Services.
Term and Termination.
(a) Term. This Agreement will become effective on the date hereof and continue for two (2) years
after the Activation Date (the "Initial Term"). Thereafter, this Agreement may be extended up to two additional
two-year terms (each a "Renewal Term"), upon the mutual agreement of the Parties. Notwithstanding any
provision in this Agreement to the contrary, in no event may either party terminate this Agreement without cause
prior to the expiration of the Initial Term.
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(b) Termination for Cause. Either Party may terminate this Agreement following a material breach
by the other Party. The non-breaching Party shall notify the breaching Party of the breach and the breaching Party
shall have thirty (30) days (the "Cure Period") to cure the breach to the reasonable satisfaction of the non-
breaching Party. If the breaching Party fails to cure the breach within the Cure Period, then the non-breaching Party
may terminate the Agreement immediately.
(c) Effect of Termination. If Client terminates this Agreement for any reason, other than as allowed
in Sections 3(a) and 3(b) above, IRx will retain any and all payments due to the Client for use by its Members. If
this Agreement is terminated for any reason, it is the Client's obligation to instruct Members to discontinue use of
Prescription Drug Card Services provided by IRx under this Agreement. In the event that any Member continues
to use the Prescription Drug Card Services after termination, IRx shall retain any and all payments received for such
usage.
Confidentiality.
(a) Confidential Information. The term "Confidential Information" includes any information that
either Party receives from the other or from one of their subsidiaries or affiliates, including but not limited to all
copies thereof. If disclosed in writing or other tangible or electronic form, the Confidential Information must be
conspicuously labeled at the time of delivery as "Confidential Information." If disclosed orally, the information must be
identified prior to disclosure as Confidential Information
(b) Use of Confidential Information. The receiving Party shall use the Confidential Information it
receives pursuant to this Agreement for the sole purpose of its obligations under this Agreement. Except as
specifically provided herein, in no event shall.; the receiving Party disseminate or communicate the Confidential
Information in any form to any other person, firm,` corporation or affiliate without the express written consent of the
disclosing Party. The receiving Party shall only disclose Confidential Information to persons within its organization
who (i) need to know the Confidential Information in order to accomplish the objectives in connection with this
Agreement, and (ii) are required to protect and otherwise not disclose or use the Confidential Information except as
provided in this Agreement. Such persons who receive any Confidential Information shall be subject to written
agreement no less restrictive than this Section 4.
(c) Derivatives of Confidential Information, Any reports, documents, notes or other information in
whatever form or medium that are derived or result from the receipt of Confidential Information shall be governed
by the same terms and conditions respecting confidentiality and use as is the Confidential Information itself.
(d) Rights in Confidential Information. All Confidential Information of the disclosing Party shall be
and remain the property of the disclosing Party. The receiving Party shall not obtain any rights of any nature
whatsoever in or to the Confidential Information as a result of such disclosure. Upon the disclosing Party's request,
the receiving Party shall promptly destroy or return to the disclosing Party all of the disclosing Party's Confidential
Information, including all copies thereof. An officer of the receiving Party shall certify to the disclosing Party that
all Confidential Information has been destroyed or returned to the disclosing Party.
(e) Exceptions. Notwithstanding any provisions contained in this Agreement, the receiving Party shall
not be required to maintain in confidence the following information: (i) information which, at the time of disclosure to
the receiving Party, is in the public domain; (ii) information which, after disclosure, becomes part of the public domain
by publication or otherwise, except by breach of this Agreement; (iii) information which was in the receiving Party's
possession at the time of disclosure to the receiving Party, and which was not acquired, directly or indirectly, from the
disclosing Party; (iv) information which the receiving Party can demonstrate resulted from its own research and
development, independent of disclosure from the disclosing Party; (v) information which the receiving Party received
from third parties, provided that such information was not obtained by such third parties from the disclosing Party on a
confidential basis; or (vi) information which is produced in compliance with applicable law or a court order, provided
that the disclosing Party is given reasonable notice of such law or order and an opportunity to attempt, at the expense of
the disclosing Party, to preclude or limit such production. The receiving Party shall have the burden of showing any
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one or more of these exceptions apply.
Access and Records.
(a) Record Maintenance. For the longer of the period required by law or seven (7) years from the date
of rendering any Prescription Drug Card Services, the Parties will maintain records related thereto.
(b) Use of Information. Except for Confidential Information, each Party may use, reproduce, or adapt
information obtained in connection with this Agreement, including Claims data information and eligibility
information, in any manner they deem appropriate, except that each Party and its agents, employees, aid contractors
shall maintain the confidentiality of this information to the extent required by applicable law or regulation including
the provisions of HIPAA, and may not use the information in any way prohibited by law. Each Party shall be solely
responsible for its own use of such information, and shall indemnify and hold the other Party harmless for, from and
against any and all costs, losses, and damages incurred by the other Party as a result of such use.
6. Indemnification. Each party (an "Indemnitor") shall indemnify and hold harmless the other party
(an "Indemnitee"), and its officers, directors, shareholders, employees and other agents, from and against any
claims, liabilities, damages, judgments or other losses (including, but not limited to, attorneys' fees) incurred by the
Indemnitee arising out of or as a result of any acts or omissions of the Indemnitor, or its officers, directors,
employees or other agents in connection with the performance of any of their duties and obligations contained
within this Agreement.
7. Limitation on Liability. IRx's maximum liability to Client for any assertion of loss or damage
arising out of or in connection with this Agreement (including any assertion brought by any third party, as a result of
any breach of this Agreement by IRx or otherwise arising from IRx's wrongful acts, errors or omissions) shall not
exceed the average monthly payment for compensable Claims payable to Client in accordance with Section (1)(e).
This average monthly payment for compensable Claims will be calculated based on the payments made for the three
(3) months immediately prior to the date in which injury or damage occurred. Client shall give timely, written
notice to IRx of any alleged loss or damage. In no event shall either party be liable to the other or any third party for
any loss of profits, lost business opportunity or any special, indirect, consequential or incidental damages arising out
of or in connection with this Agreement, regardless of the cause of action.
8. Notices. Unless otherwise specifically provided herein, all notices, consents, requests, demands
and other communications required or permitted hereunder:
(a) shall be in writing;
(b) shall be sent. by messenger, certified or registered U.S. mail, a recognized national overnight
delivery service for next business day delivery, facsimile or e-mail (with a copy sent by one of the foregoing means),
charges prepaid as applicable, to the appropriate address or number set forth below; and
(c) shall be deemed to have been given on the date of receipt by the addressee (or, if the date of
receipt is not a business day, on the first business day after the date of receipt), as evidenced by (i) a receipt executed
by the addressee (or a responsible person in his or her office), the records of the person delivering such
communication or a notice to the effect that such addressee refused to claim or accept such communication, if sent
by messenger, U.S. mail or recognized national overnight delivery service, or (ii) a receipt, or other evidence of
transmittal, generated by the sender's facsimile or e-mail software showing that such communication was sent to the
appropriate number or e-mail address on a specified date, if sent by facsimile or e-mail.
All such communications shall be sent to the following addresses or numbers, or to such other addresses or
numbers as any Party may inform the others by giving five (5) business days' prior notice:
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If to IRx: InformedRx, Inc.
2441 Warrenville Road, Suite 610
Lisle, IL 60432-3642
Attention: Contract Administration
Facsimile: (630) 328-2189
E-Mail: legal@sxc.com
If to Client: Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana. CA 92702
Attention:
Facsimile: 714-647-6956
E-Mail:
With courtesy copy to:
PRCSA -Administration
Robert Carroll
_ 26 Civic Center Plaza (M 75?
P.O. Box 1988
Santa Ana, CA 92702
Facsimile : 714-647-4211
E-Mail: rcarrollna Santa-ana ore
General Provisions.
(a) Subcontractors. Both parties acknowledge that some services under this Agreement will be
performed by Paramount Rx.
(b) Advertising. Neither Party shall use promotional material referencing or referring to the other
Party without the prior consent of the other Party; which consent shall not be unreasonably withheld. Both
Parties will cease any and all usage immediately upon termination of this Agreement.
(c) Intellectual Property. Any rights in information, innovations, ideas, discoveries, products, creative
works and the like (whether or not copyrightable or patentable), suggestions, communications, data, reports and
results conceived, derived, reduced to practice, made or developed by either Party as a direct result of the
services under this Agreement shall be the sole property of the Party developing such.
(d) Other Obligations. The Parties represent and warrant that the terms of this Agreement are not
inconsistent with any other obligations whether contractual or otherwise that the Party may have or with the
policies of any other entity with which the parties are associated.
(e) Governing, Law. This Agreement will be governed by and construed according to the laws of the
State of California without regard to its choice of law provisions. Both parties further agree that Orange
County, California, shall be the venue for any action or proceeding that may be brought by the parties hereto or
arises out of, or in connection with or by reason of this Agreement.
(f) Independent Contractors. Each Party is an independent entity and nothing in this Agreement shall
be construed to establish an employer/employee or principal/agent relationship or any fiduciary or other
relationship other than independent parties contracting with each other for the purpose of carrying out the duties
and obligations of this Agreement. Nothing in this Agreement is intended or shall be construed to confer upon
any person or entity (including Participating Pharmacies, Covered Manufacturers and Eligible Members) other
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than the parties hereto and their successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
(g) Force Majeure. Neither Party shall be deemed to have breached this Agreement or be held liable
for any failure or delay in the performance of all or any portion of its obligations under this Agreement if
prevented from doing so by a cause or causes beyond its control. Without limiting the generality of the
foregoing, such causes include acts of God or the public enemy, fires, floods, storms, earthquakes, riots, strikes,
boycotts, lock-outs, acts of third parties (e.g., wholesalers), wars and war-operations, restraints of government,
power or communication line failure or other circumstances beyond the Party's control, or by reason of the
judgment, ruling, order of any court or agency of competent jurisdiction, or materially altering the law or
regulations covering the subject matter of this Agreement or any other change in such law or regulations
subsequent to the execution of this Agreement. However, if the force majeure event continues for thirty (30)
consecutive days the party not directly affected by it may terminate this Agreement immediately upon written
notice to the other party without penalty to it.
(h) Non-Solicitation of Employees. During the term of this Agreement and for one (1) year thereafter,
neither Party may (without the prior written consent of the other Party) actively solicit any person employed
then or within the preceding year by the other Party and involved directly or indirectly in the performance of
this Agreement. Such consent may be withheld in the other Party's sole discretion. The term "actively solicit"
does not include any employment of the other Party's personnel through means of advertisements, job postings,
job fairs and the like and any employment where the individual has made the initial approach to the hiring
Party.
(i) Assi nment. Neither party may assign any rights or obligations under this Agreement without the
other party's prior written consent, except that either party may assign this Agreement without the consent of the
other party to a parent company, controlled affiliate, or affiliate under common control with the assigning party.
Notwithstanding the foregoing, IRx may assign this Agreement to Paramount Rx, or in connection with a sale of
assets, or other business combination, without the consent of Client.
0) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties; provided, however this agreement may not be assigned
by either Party without the expressed written consent of the other Party.
(k) Severabili y and Waiver. The invalidity or unenforceability of any term or provision of this
Agreement shall in no way affect the validity or enforceability of any other term or provision. The waiver by
either Party of a breach; of any provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach thereof.
(1) Headings. The headings to the sections and subsections of this Agreement shall be disregarded in
its interpretation.
(m) Dispute Resolution Procedures. The parties shall make a good faith effort to resolve any disputes
arising during the term of this Agreement.
(i) If the parties are unable to resolve the dispute through informal discussions, either
party may submit a written complaint to the other party describing the dispute and
proposing a manner of resolving such dispute. The party receiving such complaint
shall respond by accepting, rejecting, or modifying such proposed resolution, in
writing, within thirty (30) days of the date of receipt of such complaint.
(ii) If the parties are still unable to resolve the dispute and only after both parties have
determined through proper documentation that they have complied with Section
10(m)(i) above, then both parties shall agree to Executive Dispute Resolution.
Executive Dispute Resolution requires each party to meet in person for a reasonable
amount of time at a mutually agreeable location. This meeting shall be attended by at
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least one senior member of each company with the authority to settle disputes arising
from this Agreement.
(iii) Only after the parties have tried in good faith to resolve disputes through informal
means, both parties have tried to resolve disputes through formal written means, and
they have met to resolve disputes through the Executive Dispute Resolution process,
may pursue other legal recourse.. Each party shall be responsible for its own legal
costs.
(n) Survival of Terms. The provisions of Sections 3(c) and 4 through 9 shall survive the termination
of this Agreement.
(o) Entire Agreement. This Agreement, any Exhibits, attachments, and any documents incorporated
by reference constitute the entire agreement of the parties regarding the subject matter hereof. It supersedes any
prior agreements, negotiations or representations, either oral or written, relating to the subject matter of this
Agreement. This Agreement may be modified only by a writing executed by both parties.
INFORMEDRX, INC.
By:
Name: Jeff Park
Title: Chief Financial Officer
Date:
By:
Name:
Title:
Date:
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EXHIBIT A
STANDARD IRx PRODUCTS AND SERVICES
IRx shall provide the following standard services (all as more fully described in its Proposal) to Client consistent
with Client's current Plan Design Document.
Standard Services included with base fees:
1. Claims Processing Services
a. Eligibility Management
b. Eligibility Verification
C. On-line Electronic Claims Processing/Administration
d. Data Retention - 15 months Operational On-line Data
2. National Pharmacy Network Services
a. Administration of the National Pharmacy Network
b. Pharmacy Help Desk
3. Client & Member Services
a. Member Services Help Desk
b. Account Management
c. Implementation Support
d. Standard Reporting Package
4. ID Cards Production & Mailing
a. Standard Member cards or on-line cardsCommunication,
b. Standard Replacement Card Carrier via the web
5. Online Member Website Access
a. Member web site for access to ID cards, drug pricing tool, pharmacy locator, medication history ,
mail pharmacy services, as well as, general information
6. Mail Service Pharmacy
a. Postage included (Member may incur additional charges for express shipments)
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EXHIBIT B
DISCOUNT CASH PROGRAM - CLIENT CONTRACT RATES*
Participating Pharmacies will collect from Members the Client Contract Rates.
Brand Generic
1) Lower of AWP minus contracted discount + 1) Lower of ParamountRx MAC + Dispensing Fee +
Dispensing Fee + Processing Fee; OR; Processing Fee; OR
2) U&C charges 2) AWP minus contracted discount+ Dispensing Fee
+ Processing Fee; OR
3) U&C charges
Client Contract Rates for Eligible Members using the IRx Mail Service Pharmacy are as follows
Brand Generic
AWP minus contracted discount + Dispensing
Fee Lower of informedRx MAC + Dispensing Fee; OR
AWP minus contracted discount + Dispensing Fee.
B. ADDITIONAL SERVICES. Certain services as indicated below are not included in the standard
Administrative Fee and are available for an additional charge. This is not an inclusive list. InformedRx may charge
for any products or services not specifically represented herein.
General Anc illarv CPrvnoPc
Claims Processing Services Included
National Pharmacy Network Services' Included
Client and Member Services Included
ID Cards Production and Mailing TBD
Online Standard Reporting Included
Online Member Website Access Included
Mail Service Pharmacy Included
Group Set U Fees Included
On-line Access / Query Included
Standard Management Re ortin Included
Member/Participant ID Cards - Customized TBD
Client Directed Member Communication - Mailing Postage, shipping & handling
'Charges applicable if ID Cards are provided by IRx.
IRx reserves the right to modify or amend the financial provisions of this Agreement upon prior notice to Client
in the event of (a) any changes in Client's third party administrator or insurance carrier that results in a change
in any of the services provided by IRx under the terms of this Agreement; (b) any government imposed change
in federal, state or local laws or interpretation thereof or industry wide change that would make IRx's
performance of its duties hereunder materially more burdensome or expensive; (c) a change in the scope of
services to be performed under this Agreement upon which the financial provisions included in this Agreement
are based, including a change in the plan design and the exclusion of a service line (ie. retail, mail) from
Client's service selection; or (e) changes made to the AWP benchmark (or other pricing benchmark used
hereunder) or the methodology by which AWP (or other pricing benchmark used hereunder) is calculated or
reported.
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EXHIBIT C
DEFINITIONS
In addition to the capitalized terms defined elsewhere in this Agreement, the following terms shall have the `ollowing
meanings:
1. "Activation Date" means the go live date of , 20 when claims will first be processed under this
Agreement.
"Average Wholesale Price" or "AWP" means the following:
i. for products first available on the market before September 26, 2009, either
(a) the product of the wholesale acquisition price (WAC) of a prescription drug as set forth in Medi-Span
on the date dispensed times the mark-up factor over WAC that was established by Medi-Span to
calculate the average wholesale price of such drug on September 25, 2009, or
(b) the product of the manufacturer direct price (DP) of a prescription drug as set forth in Medi-Span on
the date dispensed times the mark-up factor over DP that was established by Medi-Span to calculate
the average wholesale price of such drug on September 25, 2009, and
i. for products first available on the market on or after September 26, 2009, the average wholesale price of a
prescription drug as set forth by Medi-Span on the date dispensed.
3. "Dispensing Fee" means the amount paid to the Participating Pharmacy for filling a prescription
4. "Eligible Members" or "Members" means individuals who utilize the prescription drug entitled to Covered
Prescription Services through Client.
5. "Mail Service Pharmacy" means the pharmacy provider(s) assigned responsibility for dispensing mail order
prescriptions to Eligible Members. The mail service pharmacy pricing referenced in Exhibit B of this Agreement will
apply to all claims dispensed by a designated mail service pharmacy provider regardless of days supply or quantity
dispensed.
6. "Maximum Allowable Cost" or "MAC" means the unit price that has been established by IRx or Paramount for a
multi-source drug included on it's MAC drug list developed for IRx clients which may be amended from time to time by
IRx in its sole discretion.
7. "Participating Pharmacy" means a retail pharmacy that is included in the Discount Card network provided by IRx
under which the pharmacy has agreed to provide discount Prescription Drug Services to Eligible Members and to comply
with applicable regulatory requirements.
8. "Processed Claims, Claims, or Claim Forms" (collectively "Claims") means electronic or paper pharmacy claims
that are (i) transmitted to IRx by Participating Pharmacies or Eligible Members as a result of Covered Prescription Drug
Services being supplied to Eligible Members by Participating Pharmacies, and (ii) processed by IRx with the result being
that the claims are either paid, denied, rejected or reversed.
9. "Processing Fee" means the amount collected by the Participating Pharmacy in addition to the Dispensing Fee on
behalf of subcontractors and vendors. A portion of this fee will pass to the Client.
10. Usual and Customary" or "U&C" shall mean the amount a Participating Pharmacy would charge to a cash-paying
customer in accordance with the terms of the Participating Pharmacy Network contract with IRx for the same strength,
quantity, and dosage form of a Covered Prescription Drug, as of the date of service for Covered Prescription Drug Services.
IRx represents and warrants that U&C shall include, but not be limited to, the financial benefits associated with any and all low-
price retail pharmacy generic drug programs offered by retail pharmacy providers (for example, the Walmart $4.00 30-day
prescription program, the Walmart $10.00 90day prescription program, and all other such programs, when Claims are
processed at retail pharmacies that offer such programs to cash-paying customers and submitted through the on-line
adjudication process as the pharmacies' U &C.
Discount Card Client Services Agreement_Template_01.2011
10
25D-12