HomeMy WebLinkAboutResolution - 2010-R0460 - Pharmacy Service Agreement - MAXORPLUS - 09/27/2010Resolution No. 2010-RO460
September 27, 2010
Item No. 5.6
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to
execute for and on behalf of the City of Lubbock, a Pharmacy Service Agreement for
pharmacy benefit management services, including prescription drug benefit design,
participating pharmacy contracting and network management, eligibility management,
claims processing, reporting and clinical pharmacy services, by and between the City of
Lubbock and MAXORPLUS, and related documents. Said Pharmacy Service Agreement
is attached hereto and incorporated in this resolution as if fully set forth herein and shall
be included in the minutes of the City Council.
THAT the City Manager, or her designee, may execute any routine documents and
forms associated with said insurance coverage.
Passed by the City Council on September 27, 2010 _
ATTEST:
TOM MARTIN, MAYOR
A;� 10 0=",
Rebeaca Garza, City Secretary
APPROVED AS TO CONTENT:
Leisa Hutcheson. Director of Human Resources and
Risk Management
APPROVED AS TO FORM:
Chad Weaver, Assistant City Attorney
vwxcdocs: RES.Risk Mgmt-MaxorPlus
September 10, 2010
Contract: 9 448
Resolution No. 2010-RO460
MAXORPLUS, LTD.
PHARMACY SERVICE AGREEMENT
(COMPLETE DISCLOSURE PROVISIONS)
This Pharmacy Service Agreement (the "Agreement"), dated as of January 1, 2011
(the "Effective Date"), is between MaxorPlus, Ltd., ("MAXORPLUS") and the City of
Lubbock ("CLIENT").
WHEREAS, MAXORPLUS is engaged in the business of providing to various
customers pharmacy benefit management services, including prescription drug benefit
design, participating pharmacy contracting and network management, eligibility
management, claims processing, reporting, and clinical pharmacy services.
WHEREAS, CLIENT offers prescription drug benefits to eligible employees,
dependents and retirees; and
WHEREAS, CLIENT intends to engage MAXORPLUS to perform the pharmacy
benefit management services required by CLIENT to fulfill its obligations to the eligible
persons with whom it has contracted; and
WHEREAS, CLIENT desires disclosure of all charges and discounts associated with
its prescription drug benefit program; and
WHEREAS, CLIENT requires the lowest available purchase price and pass through
pricing from its pharmacy benefit manager on all of its drugs purchased through a retail
pharmacy network or through a mail order pharmacy; and
WHEREAS, MAXORPLUS is qualified to perform such services and is willing to do
so through a COMPLETE DISCLOSURE PROGRAM upon and subject to the terms and
conditions of this Agreement;
WHEREAS, MAXORPLUS pledges to provide the Pharmacy Benefit Management
Services under this contract in accordance with the Code of Ethics set forth in Exhibit E;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, CLIENT and MAXORPLUS hereby agree as follows:
A. Definitions
AWP — "AWP" means the price defined and distributed by MediSpan for each drug
in the database. This price shall be based on the 11 digit NDC number submitted for the
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dispensed medication. AWP prices will be updated in the claims processing system at
least on a weekly basis to reflect the most current AWP pricing.
Co -Payment — "Co -Payment" means the amount of money that, according to the
terms of the Plan, the Eligible Member is required to pay towards the receipt of a Covered
Prescription Medication provided by a Participating Pharmacy.
Covered Prescriptions — "Covered Prescriptions" means any prescription
medication or device that meets the requirements for coverage set forth in the Prescription
Drug Rider, after applying all conditions and exclusions set forth therein, and that is
dispensed by a Participating Pharmacy to an Eligible Member.
Eligible Member — "Eligible Member" means an individual who is enrolled in the
Plan and who is entitled to Covered Prescription Medications under the Prescription Drug
Rider for the Plan. Information relating to the eligibility of members is established and
maintained by CLIENT.
Formulary — "Formulary" means the document prepared by MAXORPLUS or
CLIENT and provided to Participating Pharmacies, physicians, and other health care
providers for the purpose of guiding the prescribing, dispensing and purchase of
pharmaceutical products.
Law — "Law" means any federal, state or local constitution, act, statute, code, rule,
regulation, standard; any objective criteria contained in any applicable permit or approval;
any legislative or administrative action of the United States of America or of any state or
agency, department, authority, political subdivision or other instrumentality thereof; and any
decree, judgment or order of a court.
Manufacturers — "Manufacturers" shall mean a pharmaceutical company which has
entered into an agreement with MAXORPLUS or an affiliate or agent of MAXORPLUS to
offer rebates for pharmaceutical products in connection with Formulary services.
Maximum Allowable Cost (MAC) — "MAC" means the lowest published price for a
Covered Prescription, as set forth on the applicable Centers for Medicare and Medicaid
Services (CMS) MAC list, Texas state list or the MaxorPlus MAC list. The MAC will be
determined without regard to the manufacturer of the Covered Prescription actually
dispensed by a Participating Pharmacy.
Net Acquisition Cost — "Net Acquisition Cost" means MaxorPlus' unit price for
pharmaceutical products as invoiced by the wholesaler or manufacturer to Maxor Mail
Order Pharmacy.
Participating Pharmacy [or Participating Pharmacies] — "Participating Pharmacy"
or "Participatina Pharmacies" means those pharmacies with whom MAXORPLUS has
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contracted to provide various services in connection with the sale by those pharmacies of
Covered Prescriptions to Eligible Members, as listed in the MAXORPLUS Pharmacy
Directory.
Patient Profile — "Patient Profile" means a specific history of drugs dispensed by a
Participating Pharmacy to an Eligible Member. The history shall include information on
drugs dispensed, allergies, and the Eligible Member's general health condition, if available.
Pharmacy Benefit Management Services — "Pharmacy Benefit Management
Services" means those services described in paragraph B of this Agreement that
MAXORPLUS provides to CLIENT.
Physicians — "Physicians" means licensed physicians and other providers who have
contracted to provide services to Eligible Members and who are authorized by the Plan to
write prescriptions for Eligible Members.
Plan — "Plan" means the agreement or other arrangement between an Eligible
Member and CLIENT that entitles the Eligible Member to receive reimbursement for, or
payment of, medical expenses, including, without limitation, Covered Prescriptions.
Point -of -Sale (POS) — "POS" means the method of submitting claims for
adjudication by the on-line claim adjudication process of MAXORPLUS which includes
interactive communications between a terminal located at a Participating Pharmacy and
MAXORPLUS.
POS Approval — "POS Approval" means approval by MAXORPLUS via Point -of -
Sale (POS) claim submission of a claim for reimbursement of, or payment for, a Covered
Prescription by a Participating Pharmacy.
Prescription — "Prescription" means a lawful written, electronic or verbal order of a
health care practitioner licensed for a particular medication.
Prescription Drug Rider — "Prescription Drug Rider" means the prescription drug
benefit coverage, limitations and exclusions set forth in the Plan, as amended from time to
time by the CLIENT.
Proprietary or Confidential Information — "Proprietary or Confidential Information"
means any information, however recorded, related to performance, sales, financial,
contractual, and marketing information; software; technical data; the Formulary; and
concepts and processes, which have not (i) previously been published or otherwise
disclosed to the general public; (ii) previously been made available to the receiving party or
others without restrictions; or (iii) normally been furnished to others without compensation,
and which the disclosing party desires to protect against unrestricted disclosure or
competitive use.
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Rebates — "Rebates" shall mean for any period, rebates, reimbursements or other
discounts received under a manufacturer's rebate program with respect to pharmaceutical
products dispensed to an Eligible Member under the Plan during such period.
Usual and Customary Pricing — "Usual and Customary Pricing" means the lowest
price a Participating Pharmacy would charge to a patron, who is not an Eligible Member, if
that patron were to pay cash for a Covered Prescription. Such price shall reflect any
incentive or other discounts offered to the patron by Pharmacy.
B. MAXORPLUS Services. MAXORPLUS shall provide the following products and
services to CLIENT in accordance with the Plan:
1. Pharmacy Benefit Management Services
(a) Network of Participating Pharmacies. MAXORPLUS will enter into
contracts with Participating Pharmacies pursuant to which those Participating Pharmacies
will agree to dispense Covered Prescriptions to Eligible Members and MAXORPLUS will
agree to pay or reimburse the Participating Pharmacies for Covered Prescriptions
dispensed by them to Eligible Members. MaxorPlus agrees to invoice CLIENT on the same
discounted AWP price or MAC price that MaxorPlus pays the network pharmacy.
(b) Claims Processing and Adjudication. MAXORPLUS will accept,
process and adjudicate requests for authorization to dispense Covered Prescriptions
submitted by Participating Pharmacies through the MAXORPLUS POS system. Claims
transmission expenses will be deducted from payments to pharmacies.
(c) Reporting. MAXORPLUS shall provide to CLIENT by or before the
tenth day of each month, an Executive Summary Report that shall include a cost analysis,
Pharmacy network analysis, drug utilization analysis recipient analysis, and physician
analysis. From time to time, and as deemed necessary by the CLIENT, CLIENT may
request additional reports that shall be provided to CLIENT by MAXORPLUS. If such
requested information requires ad hoc reporting, MAXORPLUS shall notify CLIENT, prior
to providing such report, the cost associated with providing same.
(d) Retiree Drug Subside (RDS) Reporting. MAXORPLUS will work with
CLIENT to assure that Medicare and Medicaid eligibility accurately reflects the actual
eligibility of each Member. MAXORPLUS shall upload eligible costs monthly based on
requirements acceptable to CMS and shall assist CLIENT with prior plan years'
reconciliation. Annually, MAXORPLUS will provide to CLIENT, actuarial and attestation
services.
(e) Customer Service. MAXORPLUS will maintain and operate toll-free
customer servic lines for the benefit of Participating Pharmacies and Eligible Members
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from 7:00 a.m. to 9:00 p.m. Central Standard or Daylight Time, Monday through Friday,
and 8:00 a.m. to 6:00 p.m. Central Standard or Daylight Time, Saturday and 9:00 a.m. to
5:00 p.m. Central Standard or Daylight time, Sunday (excluding holidays).
(f) Formulary Management. MAXORPLUS will assist Client in
developing a Formulary for the Plan. CLIENT hereby authorizes MAXORPLUS to manage
the Formulary for prescription drug benefits covered under the Plan for retail and mail order
Covered Prescriptions dispensed in accordance with this Agreement. The cost of postage,
printing, and distribution of the Formulary and any subsequent update thereto or reports
hereunder will be borne by the CLIENT as set forth in Exhibit "A" under Administrative
Services and Fees. CLIENT agrees that MAXORPLUS may certify to MAXORPLUS'
contracting pharmaceutical manufacturers that CLIENT is participating in such Formulary
Program for the CLIENTS' retail and mail order Covered Prescriptions as provided herein.
CLIENT acknowledges that MAXORPLUS maintains a Formulary that allows, subject to the
determination of an independent pharmacy and therapeutics committee, the inclusion of
any covered prescription drug product approved by the FDA for use in the United States.
CLIENT'S formulary will be identified in Exhibit C and made available to CLIENT.
(g) Rebate Contracts. MAXORPLUS will attempt to contract with certain
manufacturers for rebate programs. CLIENT acknowledges that whether and to what
extent manufacturers are willing to provide rebates to CLIENT will depend upon the Plan
design adopted by CLIENT, and the Formulary used.
The CLIENT recognizes that MAXORPLUS' Clinical, PharmacoEconomic, and
Rebate Departments have negotiated contracts with manufacturers which will result in
rebates being paid by manufacturers. MAXORPLUS will pass through to CLIENT all
rebates received on the pharmaceutical products dispensed to members once each
calendar quarter as follows: within ninety (90) days of the beginning of each quarter,
MAXORPLUS will pay CLIENT such rebates received.
MAXORPLUS shall not be required to institute litigation to collect rebates from
manufacturers. If MAXORPLUS does elect to bring suit to recover rebates from
manufacturers, MAXORPLUS shall be entitled to deduct all reasonable attorney's fees and
other expenses incurred in such litigation prior to payment of the rebates to CLIENT.
Neither party shall be responsible to the other party, its affiliates, directors,
employees, agents, successors, and permitted assigns for any claim arising from:
(i) any failure by a manufacturer to pay any rebate;
any breach of an agreement relating to the transactions
contemplated by or otherwise relating to this Agreement by any
manufacturer; or
(iii) any negligence or misconduct of any manufacturer.
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CLIENT Initials:
To the extent that an ADA, or other law, requires any disclosure to Eligible Members
regarding Rebates or other discounts on pharmaceutical products, CLIENT acknowledges
that it has the sole responsibility for such disclosures to its Eligible Members.
(h) Drug Utilization Reviews and Interaction Monitoring. MAXORPLUS
will provide to Participating Pharmacies through the POS system computerized drug
interaction monitoring of Eligible Members based upon the available Patient Profile and,
subject to prescriber approval and applicable Law, will provide Drug Utilization and
pharmaceutical cost containment ("DUR") services, including generic and therapeutic
substitutions.
(i) Limitations on Drug Utilization Review Services. The information
generated in connection with DUR services is intended as an economical supplement to,
and not a substitute for, the knowledge, expertise, skill and judgment of physicians,
pharmacists, or other healthcare providers and patient care. Providers are individually
responsible for acting or not acting upon information generated and transmitted through the
DUR services, and for performing services in each jurisdiction consistent with the scope of
their licenses. In performing DUR services, MAXORPLUS shall not, and is not required by
this Agreement to deny claims or require physicians, pharmacists, or patient compliance
with any norm or suggested drug regimen, or in any way substitute MAXORPLUS'
judgment for the professional judgment or responsibility of the physician or pharmacist.
MAXORPLUS' DUR services are highly automated. Any focus professional review
would also be based upon automated analysis of eligible members' profiles. Therefore, the
DUR services are necessarily limited by the amount and type of patient information
available to MAXORPLUS. Meaningful patient information which may not be available to
MAXORPLUS includes, but is not limited to, patient diagnosis, utilization of drugs obtained
without utilizing the MAXORPLUS POS System or otherwise not included in the patient's
profile or claim data. MAXORPLUS shall have no obligation to acquire information
concerning any patient beyond the information which is included in the CLIENT'S eligibility
records or the claim data submitted by the participating pharmacies in connection with the
Plan. MAXORPLUS shall update its DUR databases on a reasonable basis to reflect
changes in available standards for pharmaceutical prescribing; provided, however, no data
base will be required to contain all currently available information on accepted medical
practices or prescribing practices.
Q) Maintenance of Records/Audit/Member Review. MAXORPLUS will
maintain such business records as may be required by Law or as may be necessary to
properly document the delivery of, and payment for, Covered Prescriptions ("Claims
Information") and the provision of services by MAXORPLUS under this Agreement. Such
records may be reviewed by CLIENT or its representatives upon 48 hours prior request and
at CLIENT'S expense; provided, however, that no such review shall relate to records for
Covered Prescr' tions dispensed more than two (2) years prior to the date such review is
requested. C T may utilize its employees to conduct audits or CLIENT may employ
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third party auditors. Should CLIENT use third party auditors, due to confidentiality issues
CLIENT will give MAXORPLUS prior notice of auditors' identity. MAXORPLUS will give
CLIENT prompt notice of disagreement with CLIENT'S choice of auditors and justification
for such disagreement. If CLIENT agrees, CLIENT will proceed to the second highest
ranked proposer in the request for proposal (RFP) process. Should MaxorPlus' supply
contract prohibit disclosure of such contract, MaxorPlus will provide satisfactory
documentation to verify pricing, discounts and rebates. If an Eligible Member or a
Member's agent or designee shall request to review or duplicate any records of that
Member's claims' information, MAXORPLUS shall refer such member to CLIENT, which
may request any such records under this paragraph. Compliance with random or specific
data sampling requests shall require thirty (30) days prior written notice. In the case of
review by representatives of CLIENT, such representatives shall agree in writing to abide
by the confidentiality and indemnity provisions of this Agreement. Except as required by
Law, MAXORPLUS shall not make any of its records available to others for any purpose
other than the provision of products and services under this Agreement; provided, however
such data may be combined and used by MAXORPLUS in preparing statistical reports or
for other business purposes that may be made available to others, in which event
information pertaining to CLIENT or Eligible Members shall not be identifiable.
If MAXORPLUS receives a court order, subpoena, or governmental request
for such records; MAXORPLUS may comply with such order, subpoena, or request and, if
such order, subpoena, or request relates to the records of the CLIENT or any Eligible
Member and not to MAXORPLUS' businesses generally, CLIENT shall reimburse
MAXORPLUS for all costs incurred in connection therewith.
MAXORPLUS acknowledges that CLIENT is a governmental body under
Chapter 552 of the Texas Government Code and that the Texas Public Information Act is
applicable to CLIENT. CLIENT will inform MAXORPLUS of any request it receives for
documents or records that contain, or could contain, Proprietary or Confidential information
of MAXORPLUS. Upon receipt of such notice, it is the responsibility and duty of
MAXORPLUS to submit its written arguments to the Texas Attorney General under the
terms of Chapter 552 of the Texas Government Code as to the reasons such proprietary
information should not be released to the public.
2. Mail Order Service Pharmacy.
MAXOR MAIL SERVICE PHARMACY will provide to client members the following
services:
(a) Fill Prescriptions by mail during normal business hours, subject to the
professional judgment of the dispensing Pharmacist; and
(b) Based upon the Prescriptions actually written and applicable Law,
maintain an inveWory equal to a ninety (90) day supply for each Prescription.
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CLIENT acknowledges that Maxor Mail Service Pharmacy has negotiated on behalf
of MAXORPLUS contracts with prime vendors which result in substantial discounts but
which contracts require Maxor Mail Service to prepay such vendors, and that MAXORPLUS
passes on such prepayment discounts to CLIENT.
3. Chronic Injectable/Specialty Pharmacy.
Maxor Specialty will be the exclusive provider of chronic injectables, biological medications
and specialty oral medications and will provide to client members the following services:
(a) Fill prescriptions by mail, common carrier or overnight as dictated by
stability requirements of medications, during normal business hours
(b) Coordination of nursing services as required
(c) 24 hour pharmacy education and consultation
(d) Home or office delivery
(e) Patient monitoring and follow-up for compliance and outcomes
(f) Other infusion services
(g) Coordination of benefits
(h) Contact insurance company to verify coverage under medical benefit
(i) Toll-free customer service phone number
4. Additional Services. If (i) CLIENT requests MAXORPLUS to provide
services other than the pharmacy benefit management services and mail order pharmacy
services specified above, including special research projects, reports, additional
identification cards or other tasks to be specifically performed for or on behalf of CLIENT,
or (ii) to initially implement the Plan or to implement changes to the Plan MAXORPLUS is
required to make system changes; then, in either event, CLIENT shall pay to MAXORPLUS
an additional charge as set forth in Exhibit "A," or if not specifically set forth in Exhibit "A,"
as mutually agreed upon by the parties in writing before such services ("Additional
Services") are provided.
5. Member Reimbursement. If an Eligible Member submits a request for
reimbursement for a Covered Prescription to MaxorPlus within 90 days of service date,
MaxorPlus will reimburse such Eligible Member at the contracted participating pharmacy
rate.
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6. Insurance. MAXORPLUS shall maintain insurance in thefollowing types and
amounts:
(a) General Liability Insurance written on an occurrence basis with a
combined single limit of $1,000,000 to include Products and
completed operations. Such insurance shall name CLIENT as an
additional insured on a primary and non-contributory basis.
(b) MAXORPLUS shall elect to maintain workers' compensation coverage
pursuant to Section 406.002 of the Texas Labor Code. Such
coverage shall be endorsed to provide a waiver of subrogation in
favor of the CLIENT.
C. Joint Obligations.
1. Eligibility Data. CLIENT shall furnish MAXORPLUS Eligible Member
eligibility data in an agreed-upon medium and in the format requested by MAXORPLUS.
Such eligibility data updates shall identify only changes, additions or terminations of
Eligible Members. CLIENT agrees that MAXORPLUS may act in reliance upon the
accuracy of all data received from CLIENT under this paragraph C.3. CLIENT shall be
responsible for notifying MAXORPLUS of the termination of an Eligible Member from
coverage under the Plan. CLIENT shall be responsible for all claims incurred by
MAXORPLUS with respect to an Eligible Member until CLIENT has provided MAXORPLUS
with an updated list of Eligible Members. If CLIENT submits eligibility data in a format
other than that requested by MAXORPLUS, CLIENT shall incur a fee at MAXORPLUS'
then prevailing rate to transform that data into MAXORPLUS' standard format. CLIENT
shall furnish MAXORPLUS with eligibility, adds, changes, deletes and updates on a weekly
basis, with full eligibility loads as requested by MAXORPLUS.
2. Plan Changes. CLIENT shall notify MAXORPLUS in writing at least sixty
(60) days in advance of any changes in the Plan that results in a change of any of the
Pharmacy Benefit Services to be provided by MAXORPLUS under the terms of this
Agreement. If such changes have a material impact on MAXORPLUS' obligations under
this Agreement, MAXORPLUS may terminate this Agreement in accordance with
paragraph F (2) (b) hereof or modify its charges to reflect such change in accordance with
Exhibit "A".
3. Confidentiality.
(a) MAXORPLUS and CLIENT shall ensure compliance with federal
regulations under the Health Insurance Portability and Accounting Act (HIPAA) regarding
privacy of all protected health information (PHI) and shall take steps and do all things
reasonably nec sary to ensure that the terms of this Agreement, all information relating to
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Eligible Members, and all Proprietary or Confidential Information obtained during the term
of this Agreement disclosed or made use of outside the business of such other party forthe
purposes of meeting their obligations under this Agreement remains confidential; provided,
however, that the foregoing shall not apply to information: (i) provided to voluntary
accreditation agencies, government agencies or third party payors as required by Law or
consented to by the affected party; (ii) reasonably required by health care providers
providing health care services to Eligible Members; (iii) that either party can show was
known to it prior to disclosure by the other party; or (iv) that is or becomes public
knowledge through no fault of the party to whom the disclosure is made.
(b) CLIENT acknowledges that the MAXORPLUS Formulary contains
proprietary information of MAXORPLUS and agrees that MAXORPLUS owns all rights to
the Formulary, including but not limited to, rights associated with publication, trade secrets,
copyrights, trademarks, and patents, and any rights that CLIENT may have in the
Formulary are hereby assigned to MAXORPLUS. Accordingly, copies in any medium
distributed to CLIENT and its participating physicians remain the property of MAXORPLUS
and may be used only by CLIENT and such participating physicians for the purposes and
transactions contemplated by this Agreement. Other than as expressly authorized in this
Agreement, no copies of the Formulary shall be distributed or disclosed except as
reasonably necessary for performance of this Agreement, and in particular, no copy shall
be distributed or disclosed to any competitor of MAXORPLUS.
(c) CLIENT acknowledges that any unauthorized disclosure or use of
MAXORPLUS information will cause MAXORPLUS immediate and irreparable injury or
loss. Accordingly, should CLIENT fail to comply with this Section, MAXORPLUS shall be
entitled to specific performance including immediate issuance of a temporary restraining
order and/or preliminary injunction enforcing this Agreement, and to judgment for damages
(including attorney's fees) caused by the breach, and to any other remedies provided by
applicable law.
(d) MAXORPLUS acknowledges that CLIENT is a governmental body
under Chapter 552 of the Texas Government Code and that the Texas Public Information
Act is applicable to CLIENT. CLIENT will inform MAXORPLUS of any request it receives
for documents or records that contain, or could contain, Proprietary or Confidential
information of MAXORPLUS. Upon receipt of such notice, it is the responsibility and duty
of MAXORPLUS to submit its written arguments to the Texas Attorney General under the
terms of Chapter 552 of the Texas Government Code as to the reasons such proprietary
information should not be released to the public.
6. Indemnification.
(a) MAXORPLUS shall defend, indemnify and hold harmless CLIENT and
each of its officers, directors, employees, agents and stockholders, from and against any
and all claims, liabilities, damages or expenses of any kind (including reasonable attorneys'
fees and disbur ments) (collectively, "Indemnified Amounts") incurred by any of those
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parties as a result of MAXORPLUS' negligence or breach of its obligations under this
Agreement.
(b) CLIENT, to the extent allowed by law, shall defend, indemnify and hold
harmless MAXORPLUS and each of its officers, directors, employees, agents and
stockholders, from and against any and all claims, liabilities, damages or expenses of any
kind (including reasonable attorneys' fees and disbursements) (collectively, "Indemnified
Amounts") incurred by any of the parties as a result of (i) CLIENT'S negligence or breach
of its obligations under this Agreement, or (ii) the late receipt of information orthe receipt of
inaccurate or incomplete information provided by the CLIENT.
(c) If a party seeks indemnification under this Agreement, that party shall
notify the other in writing within a reasonable time of the assertion of any claim, or the
commencement of any action or proceeding, for which indemnity may be sought under this
Agreement. Failure to notify the other party shall result in the waiver of indemnity rights
with respect to such claim, suit, action or proceeding. The parties shall cooperate with
each other in the defense and settlement of any such claim, action or proceeding.
D. Obligations of Client.
1. Payment. CLIENT shall pay MAXORPLUS for the Pharmacy Benefit
Services provided by MAXORPLUS under the terms of this Agreement in accordance with
the schedules set forth in Exhibit "A". CLIENT shall also pay to MAXORPLUS all amounts
to be disbursed on its behalf to Participating Pharmacies by MAXORPLUS. In no event
shall MAXORPLUS have any obligation to forward any claims payments to participating
pharmacies unless and until CLIENT has submitted payment to MAXORPLUS when
required. CLIENT shall remain responsible for payment of all claims.
2. Security. MAXORPLUS agrees that based upon CLIENT'S present financial
condition, MAXORPLUS shall not require security; provided, however, if at any time and
from time to time during the term of this Agreement MAXORPLUS shall determine, based
on Claims volume, payment record and/or CLIENT'S latest financial information, that there
are reasonable grounds for insecurity on the part of MAXORPLUS as to the ability of
CLIENT to meet its financial commitments hereunder as they become due, MAXORPLUS
shall have the right to require CLIENT to provide a letter of credit from the CLIENT'S bank
or security deposit in such amount and form and at such time as MAXORPLUS deems
necessary, not to exceed two cycles of claims activity. CLIENT shall provide such security
within ten (10) days of MAXORPLUS' request. CLIENT agrees to furnish audited financial
statements to MAXORPLUS from time to time upon MAXORPLUS' request.
3. Pricing Changes.
a. After the initial term of this Agreement, MAXORPLUS and CLIENT may
renegotiate the Administrative Fees, except those based on changes in the Consumer
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Price Index, or Finance Charges applicable to a Plan by MAXORPLUS giving CLIENT
ninety (90) days' prior written notice of expiration and request to renegotiate.
b. The parties agree that the pricing indices that are the basis of the pharmacy
billing rates in Exhibit "A" of this Agreement are outside the control of Client and
MaxorPlus. The parties further agree that industry, legal and regulatory activities might
from time to time lead to changes relating to, or elimination of, these pricing indices that
could render this Agreement ambiguous or could alter the financial positions of the parties
under this Agreement. The parties also agree that their intent in this Agreement is to
maintain the pricing stability as herein expressed and to not create disadvantages to either
party. Accordingly, to preserve the stability of the Agreement as negotiated, if pursuant to
changes in the pricing indices, MaxorPlus does any of the following:
(i) changes the AWP source across its book of business; or
(ii) maintains AWP, as modified, as the pricing index; or
(iii) changes the pricing index from AWP to another index or benchmark,
the Participating Pharmacy, Maxor Specialty and Mail Service Pharmacy rates, rebates and
guarantees, as applicable, will be modified as reasonably and equitably necessary to
maintain the pricing equilibrium intended by this Agreement. MaxorPlus will notify Client at
least ninety (90) days prior to the change with explanation of the change. If Client disputes
the analysis of the financial impact of the change, the parties agree to negotiate in good
faith to resolve such dispute.
4. Control of Plan. CLIENT shall have sole authority to control and administer
the Plan. Nothing in this Agreement shall be deemed to confer upon MAXORPLUS the (a)
status of fiduciary as defined in either the Employee Retirement Income Security Act of
1974, as amended, or the Americans with Disabilities Act ("ADA") or (b) any responsibility
for the terms or validity of the Plan. CLIENT represents that it has all necessary
authorizations from Eligible Members to receive, review and audit Patient -Specific Data.
To the extent permitted by law, CLIENT agrees to defend, indemnify, and hold harmless
MAXORPLUS and each of its officers, directors, employees, agents, and stockholders from
and against any and all claims, liabilities, damages, or expenses of any kind (including
reasonable attorney's fees and disbursements) which MAXORPLUS may incur as a result
of any claim by an employee or former employee of CLIENT or any of its affiliates under
law that protects the rights of such employees and their beneficiaries, including, without
limitation, the Americans With Disabilities Act ("ADA").
5. Disclosure Obligations. CLIENT acknowledges and agrees that it is
responsible for disclosing to Eligible Members any and all matters relating to the Plan as
are required by law to be disclosed, including any matter relating to the calculation of co-
payments, co-insurance amounts, deductibles or any other amounts that are payable by an
Eligible Memb in connection with the Plan. CLIENT further agrees to inform Eligible
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Members that claims submitted after 90 days from origination will not be covered by
MaxorPlus.
6. Compliance with Law. CLIENT agrees to comply with all Laws applicable to
its prescription drug benefit plan. CLIENT acknowledges that MAXORPLUS shall have no
responsibility to advise CLIENT regarding CLIENT's compliance with any applicable law,
including, without limitation, the ADA, and tax laws. MAXORPLUS makes no
representation or warranty that the Plan design selected by CLIENT shall be in compliance
with applicable law. Upon CLIENT'S request and at its expense, MAXORPLUS shall
cooperate and take reasonable steps to comply with any laws applicable to the creation
and maintenance of a pharmacy network, including any willing provider laws. CLIENT shall
furnish MAXORPLUS, in a timely manner, all information necessary for such cooperation
and compliance efforts.
7. Confirmation Reports. From time to time, MAXORPLUS may provide
CLIENT with reports confirming (i) all or some portion of the Plan information submitted to
MAXORPLUS, (ii) member enrollment or eligibility data, (iii) claims or billing activity during
a specific period, and/or (iv) any action or actions taken by MAXORPLUS in performing
administrative services or additional services hereunder. CLIENT shall review such report
and notify MAXORPLUS in writing of any errors or objections within thirty (30) days of
receipt of the report. Until CLIENT notifies MAXORPLUS of any errors or objections,
MAXORPLUS shall be entitled to rely on the information contained in the report. If
CLIENT does not notify MAXORPLUS of any errors or objections within such thirty (30) day
period, the information contained in the report shall be deemed accurate, complete and
acceptable to CLIENT.
8. Other Rebate Arrangements. With respect to Eligible Members covered by
this Agreement, CLIENT will not participate in any other formulary or similar discount
program (including any such program which may be available through a mail order
pharmacy designated by CLIENT) not managed by MAXORPLUS during the term of the
Agreement and shall not independently create any formulary during the term of the
Agreement. Also, with respect to such Eligible Members, CLIENT agrees not to enter into
any direct or indirect contracts with pharmaceutical manufacturers for discounts during the
term of the Agreement or any extension thereof. Nothing in this section shall prohibit
CLIENT from entering into arrangements with other pharmaceutical management
companies offering formulary services after the term of the Agreement.
E. Billing and Funding; Remedies.
1. Payment Due Date and Service Fee. MAXORPLUS shall invoice CLIENT at
the time specified on Exhibit B to this Agreement. All payments by CLIENT shall be made
within fifteen (15) days after invoice date. Late payments shall bear a service fee of one
and one-half percent (1.5%) for each thirty (30) days that payment is late, beginning on the
sixteenth (16th) day after invoice date; provided however, that if the service fee charged
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would exceed the maximum legal rate for interest permitted by law, the service fee shall be
reduced to the maximum amount of periodic interest permitted by law.
2. Certain Remedies. If at any time CLIENT shall fail to pay MAXORPLUS by
the due date the amount owing to MAXORPLUS hereunder, MAXORPLUS shall have the
right, upon two (2) business days written notice to CLIENT, to (i) suspend performance of
any and all of MAXORPLUS' obligations under or in connection with this Agreement,
(including MAXORPLUS' obligation to process claims using the POS System), (ii)
immediately advise CLIENT that MAXORPLUS' POS system is not available in connection
with the Plan, (iii) apply all or any portion of any security posted by CLIENT with
MAXORPLUS to CLIENT'S delinquent account, and (iv) set off against any amounts
otherwise payable to CLIENT under this Agreement (including, if any, rebates
MAXORPLUS receives from a manufacturer on behalf of the CLIENT) any amounts due
from CLIENT under this Agreement. CLIENT shall be responsible for all costs of
collection and agrees to reimburse MAXORPLUS for such costs and expenses, including
reasonable attorney's fees. Nothing in this Agreement shall limit, and the parties agree
that in addition to the rights specified in this Section MAXORPLUS shall retain, any and all
rights MAXORPLUS may have at law, equity or under this Agreement.
F. Term and Termination
1. Term. This Agreement shall become effective on January 1, 2011 (the
"Effective Date") and thereafter shall continue to be in effect for three (3) years with two
additional one year renewals, unless terminated in accordance with paragraph F (2) hereof,
or as otherwise provided in this Agreement. All fees, prices and consideration to be paid
by CLIENT shall remain firm for all renewals, if any, subject to any applicable CPI
adjustment as set forth in this Agreement.
2. Termination.
(a) Either party may terminate this Agreement upon sixty (60) days prior
written notice to the other party in the event of a material breach by such other party and
the failure of such other party to cure such breach within the sixty (60) day period following
such notice.
(b) Either party may terminate this Agreement as of the end of the primary
term of this Agreement, or any renewal period thereafter, by providing written notice to the
other party of their intent to terminate the Agreement not more than one hundred twenty
(120) days but not less than ninety (90) days prior to the end of the primary term or renewal
period.
(c) MAXORPLUS may terminate this Agreement upon sixty (60) days prior
written notice to CLIENT if CLIENT changes, modifies or amends the Plan in a manner
that, in the sole dis retion of MAXORPLUS, materially or adversely affects MAXORPLUS
or significantly i eases the responsibilities of MAXORPLUS under this Agreement.
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(d) Either party may terminate this Agreement at any time upon written
notice to the other party in the event of any of the following: (i) the commencement of any
proceedings, whether under court supervision or otherwise, for the liquidation of the other
party; (ii) the insolvency of the other; (iii) the appointment of a receiver or similar officer for
the other; or (iv) the filing of a petition in bankruptcy by or against the other under any state
or federal bankruptcy statute or debtors law for its relief or reorganization or for the
composition, extension, arrangement, or readjustment of its obligations.
3. Obligations Upon Termination. Termination of this Agreement shall have
no effect upon the rights and obligations of the parties arising out of any transactions
occurring prior to the effective date of such termination. In the event of termination of this
Agreement for any reason, MAXORPLUS shall continue to process mail order prescriptions
not requiring clarification that are received prior to the termination date. CLIENT shall
remain liable to MAXORPLUS for all fees incurred prior to such termination and for all
expenses incurred by MAXORPLUS in forwarding to CLIENT Prescriptions received
thereafter. Duties of confidentiality under the Agreement shall survive its termination and
shall continue for six (6) years following termination (unless such materials have been
previously returned or destroyed), at which time all remaining confidential information
retained by one party of the other shall be returned or destroyed.
G. Miscellaneous
1. Assignment. Neither party may assign this Agreement without the prior
written consent of the other party, provided, however, that MAXORPLUS may assign this
Agreement to any of its affiliates at any time or as part of a sale of all or substantially all of
its assets. This Agreement is a service contract specific to the CLIENT, and MAXORPLUS
cannot be required without its consent by assignment to perform its services for any entity
other than the CLIENT.
2. Compliance with Law. Each party shall comply with the provisions of all
applicable Laws and regulations in connection with the subject matter of this Agreement.
Neither party shall make payments or perform any services under this Agreement that
would be prohibited by Law. No part of this Agreement shall be construed to induce or
encourage the referral of patients, and no payment made pursuant to this Agreement or
any other agreement between MAXORPLUS and CLIENT shall be construed as an
inducement for the purchase, lease, order or arrangement for the furnishing of health care
products or services.
3. Exclusivity. CLIENT shall make MAXORPLUS the exclusive provider to its
Eligible Members of the Pharmacy Benefit Management Services during the term of this
Agreement.
4. Force Ma'eure. Except for payment obligations, neither party shall be liable
for failure or d y of performance arising from an act of God or other events beyond
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control of such party; including the acts of a regulatory agency, fires, floods, explosions,
strikes, labor stoppages, war and rebellion.
5. Limitation of Liability. Except as otherwise expressly set forth in this
Agreement, MAXORPLUS makes no representations or warranties, express or implied,
including but not limited to any warranty of merchantability or fitness for a particular
purpose. In no event shall MAXORPLUS be liable for any incidental or consequential
damages.
6. Amendment of Agreement. This Agreement may not be modified except in
writing signed by both parties.
7. Governing Law/Change in Law. This Agreement and its interpretation shall
be governed by the laws of the State of Texas with venue in Lubbock County, Texas. If
there occurs any change in law which materially alters the rights or obligations of either
party under this Agreement, the parties shall equitably adjust the terms of this Agreement
to take into account such change in law. If the parties are unable to agree upon an
equitable adjustment within sixty (60) days after either party notifies the other of such a
change in law, this Agreement shall terminate.
8. Severability. In the event of the enactment, promulgation, rescission,
modification or interpretation of any law or regulation after the date hereof which would (a)
adversely affect the manner in which either party is obligated to perform under this
Agreement, (b) adversely affect for either party the net prices or other terms applicable
under this Agreement, or (c) have the effect of requiring the net prices or other terms
applicable under this Agreement to be extended or offered to a stranger to this Agreement,
Client and MaxorPlus shall each have the right and obligation to enter into good faith
negotiations with the other party in order to seek to agree on reasonable terms for
maintaining the intent of this Agreement without the effect of such enactment,
promulgation, etc.; agreement on any such terms shall be in the sole discretion of each
party, however, each party shall use its best efforts to reach agreement on such terms. If
the parties do not agree within 60 days of a party's written request for negotiations, either
party may terminate this Agreement.
9. Entire Agreement: Waiver. This Agreement supersedes all prior or
contemporaneous understandings or contracts, and constitutes the entire agreement
existing between the parties regarding the subject matter of this Agreement. No waiver or
discharge of any breach of this Agreement shall be effective unless it is in writing signed by
both parties. Any waiver of any breach of any provision of this Agreement shall not be a
waiver of any subsequent breach of any provision of this Agreement.
10. Notices. Any notice given underthis Agreement shall be in writing and shall
be deemed received if sent by hand delivery, facsimile transmission, receipt confirmed,
overnight courier that provides confirmation of delivery, or certified mail, return receipt
requested, to the pplicable party at its address set forth beneath its signature to this
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Agreement, or to such other address or to the attention of such other personas either party
may designate in writing pursuant to this Section.
11. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
12. Agreement Dispute Resolution. Should a dispute arise concerning either
party's failure to fulfill its obligations under this Agreement, the aggrieved party will seek
resolution of the dispute by good -faith negotiations between the CEO of each party or his
or her designee. Should the negotiations fail to resolve the dispute within fifteen (15) days
of their beginning, the parties shall attempt, in good faith, to settle the dispute through
mediation. Failure to agree on a mediator will be resolved by submitting the dispute to the
local equivalent of a dispute resolution center. If the mediation fails to resolve the dispute,
any party may pursue its available legal remedies in a court of competent jurisdiction.
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13. Exhibits. The following exhibits are made a part of this Agreement.
EXHIBIT A - Client Payments
EXHIBIT B - Invoice Schedule
EXHIBIT C — Prescription Drug Rider
EXHIBIT D - Maxor Mail Service Pharmacy Clinical Pharmacy Services
EXHIBIT E — MaxorPlus Code of Ethics
EXHIBIT F — Business Associate Obligations
EXECUTED this 27th day of September , 2010 by affixing an authorized
signature hereto and initialing each page in the spaces provided.
MAXORPLUS, LTD. CITY OF LUBBOCK
4 By: y:
Printed Name: Steven H. Smith
Printed Name: Tom Martin
Title: Executive Vice President Title: Mayor
Date: V/Y//-d Date: September 27, 2010
320 South Polk, Suite 200
Amarillo, Texas 79101
Fax No: (806) 324-5495
ATTEST:
ebe a Garza, City Secreta
APPROVP AS TO FORM:
Chad Weaver, Asst. City Attorney
is
162513 th Street
Lubbock, Texas 79457
Fax No: (806) 775-3313
APPROVED AS TO CONTENT:
Leisa Hutcheson, Dir., HR and Risk Mgt.
Resolution No. 2010-RO460
EXHIBIT "A"
CLIENT PAYMENTS
1. Retail Prescriptions. For each Prescription dispensed by a Participating Pharmacy
to an Eligible Member, CLIENT shall reimburse MAXORPLUS an amount equal to the
MAXORPLUS Pharmacy Reimbursement Rate.
Pharmacy Reimbursement Rate — For the purpose of this Exhibit A "Pharmacy
Reimbursement Rate" means for (i) brand name drugs, AWP minus 11.7 to 12.04 percent
plus $2.10 to 2.50 fill fee, and (ii) generic drugs, MAC plus $2.10 to $2.50 fill fee. CLIENT
is responsible for the payment of any applicable sales or use taxes, and CLIENT shall
reimburse MAXORPLUS for all taxes paid on its behalf to Participating Pharmacies.
If CLIENT requests MAXORPLUS to add a pharmacy to the network that is contracted at
different reimbursement rates than set out above, CLIENT shall be invoiced at the
applicable contracted MAXORPLUS Pharmacy Reimbursement Rate.
Reimbursement may include minimum copay logic where the member pays the lesser of
pharmacy's U&C or copayment. Minimum reimbursements may apply. Generic effective
rates and pass-through minimums may apply to some pharmacy contracts.
2. Mail Order Pharmacy. For each Prescription dispensed by the Maxor Mail Order
Pharmacy to an Eligible Member, CLIENT shall pay MAXORPLUS net acquisition cost plus
$ 12.50 fill fee* less co -payment and deductibles established by CLIENT. In the event an
Eligible Member submits to MAXORPLUS a Co -payment in an insufficient amount, and
MAXORPLUS is unable to collect the correct Co -payment amount from the Eligible
Member, then MAXORPLUS may invoice CLIENT for the amount of the uncollected Co-
payment(s), and CLIENT shall be liable for payment of such co -payment amount.
`Mail order fill fee is subject to annual inflation adjustment according to the most recently published Consumer
Price Index.
3. Chronic Injectable/Specialty Pharmacy. For each prescription dispensed by
Maxor Specialty to an eligible member, CLIENT shall pay MAXORPLUS the lesser of:
AWP less 13.65% plus $2.50 or MAC plus $2.50 less co -payment as established by
CLIENT for Tier 1 Specialty Drugs; or AWP less 15.65% plus $2.50 or MAC plus $2.50
less co -payment as established by CLIENT for Tier 2 Specialty Drugs; or AWP less
17.65% plus $2.50 or MAC plus $2.50 less co -payment as established by CLIENT for Tier
3 Specialty Drugs; or AWP less 20.65% plus $2.50 or MAC plus $2.50 less co -payment as
established by CLIENT for Tier 4 Specialty Drugs as designated by MAXORPLUS. The
AWP less the applicable discount plus $2.50 shall cover shipping fees and necessary
overnight delivery due to stability of medications. In the event an Eligible Member submits
to MAXORPLUS a Co -payment in an insufficient amount, and MAXORPLUS is unable to
collect the corre Co -payment amount from the Eligible Member, then MAXORPLUS may
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invoice CLIENT for the amount of the uncollected Co-payment(s) on a regular basis, and
CLIENT shall be liable for payment of such co -payment amount.
4. Special Reimbursement for Certain Drugs. Certain drugs that become available
on the market from time to time will be priced separately from, and thus not subject to the
reduced contracted reimbursement rate, due to, among other things, specialized
manufacturer processes, limited availability or extraordinary shipping requirements. Such
drugs include compounds. MAXORPLUS shall provide CLIENT with a list of such drugs,
and their corresponding reimbursement rates (which are generally no less than full AWP),
upon request. Participating Pharmacies may dispense these drugs to Eligible Members
unless the CLIENT'S plan design would otherwise exclude these drugs or the CLIENT
notifies MAXORPLUS in writing of its objections.
CLIENT hereby agrees to the following: All payments made by CLIENT to MAXORPLUS
shall include all applicable fees, including, but not limited to ingredient cost and dispensing
fee.
5. Maxor Mail Order Pharmacy Clinical Pharmacy Services.
a. Prescription Clinical Intervention.
CLIENT shall receive 100% of all savings realized as a result of
MAXORPLUS providing the Prescription Clinical Intervention Services
described in Exhibit D.
6. Administrative Services and Fees.
Administrative Fee*
Rebate Sharing
ID Cards (additional or replacement)
Administrative Prior Authorizations (PA)
Clinical Prior Authorizations (PA)
Paper Claims Processing
Manual Eligibility Data Entry
Formulary Postage, Printing and Distribution
Retiree Drug Subsidy Reporting
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$3.18 per paid claim
100% to CLIENT
No Charge
No Charge
No Charge
No Charge
No Charge
No Charge
No Charge
Monthly Reports No Charge
`Administrative fee is subject to an annual inflation adjustment according to the most recently published
Consumer Price Index.
7. Additional Services - With the exception of the costs incurred as part of the
services described in paragraph B of this Agreement, CLIENT shall be responsible for all
mutually agreed upon costs and charges incurred by MAXORPLUS in connection with this
Agreement. Such costs shall include costs associated with responding to CLIENT
requests, costs necessitated by the acts or omissions of CLIENT and any cost incurred by
MAXORPLUS in performing services in conjunction with this Agreement which may be
requested or required of MAXORPLUS and not specifically included in the scope of
services described in paragraph B. MAXORPLUS and CLIENT agree to negotiate in good
faith the cost of any services requested by CLIENT outside the scope of services described
in Paragraph B of this Agreement.
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Resolution No. 2010-RO460
EXHIBIT "B"
INVOICE SCHEDULE
Invoices shall be issued according to the following schedule:
Retail and Mail Order Prescription Claims Payment
Administrative Service Fees
Additional Service Fees and Costs
Maxor Mail Order Pharmacy
Prescription Clinical Intervention Services
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22
Semi-monthly
Semi-monthly
Semi-monthly
Monthly
EXHIBIT "C"
SUMMARY OF PRESCRIPTION BENEFIT COVERAGE
(Summary to Follow)
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Resolution No. 2010-RO460
EXHIBIT "D"
MAXOR MAIL SERVICE PHARMACY
CLINICAL PHARMACY SERVICES
Prescription Clinical Intervention Services
MAXORPLUS shall:
A. Analyze available patient data to determine the appropriateness and cost
effectiveness of current Mail Order Prescriptions provided to Eligible Members;
B. Based upon the foregoing analysis, MAXORPLUS shall contact the prescriber
where appropriate to suggest modifications to the prescribed therapy to either a therapeutic
or generic equivalent; and
C. Dispense Prescriptions as authorized by the prescriber.
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Resolution No. 2010-RO460
EXHIBIT "E"
MAXORPLUS CODE OF ETHICS
Maxor National Pharmacy Services Corporation is committed to always representing the best
interests of its Clients in all PBM activities under its COMPLETE DISCLOSURE PRICING program.
To clarify Maxor's pledge to its Clients under this program, the following code of ethical behavior has
been adopted by Maxor and is incorporated into every COMPLETE DISCLOSURE PRICING
contract with Maxor:
• Maxor pledges its total dedication to the highest ideals of honesty and integrity in all PBM
activities.
• Maxor will always strive to provide the highest level of service possible and will always
prioritize the best interests of the Client and its employees in all PBM activities.
• Maxor pledges to fully disclose all financial activities related to every transaction affecting the
Client.
• Maxor pledges that it will always use its best efforts to obtain the best value on all drug
purchases for the Client in both the retail network and through Maxor's mail-order pharmacy.
• Maxor pledges to always bill the Client the same discounted AWP or MAC price that it pays
the network pharmacy.
• Maxor pledges that it will never use repackaged or relabeled NDC numbers for its mail order
pricing unless the unit cost to the Client is less than the original manufacturer's price.
• Maxor pledges to pass through to the Client all discounts from prime vendors.
• Maxor pledges to pass 100% of all rebates, administrative fees and other revenue received
from drug manufacturers through to the Client.
• Maxor guarantees that it will never sell data related to Client's members or Client's account
without first obtaining Client's approval, and when data is sold, 100% of the revenue from
such a transaction will be passed through to the Client.
• Maxor pledges to always disclose all fees or commissions associated with the Client's
account that are paid to Third Party Administrators, Brokers or Consultants.
• Maxor pledges to use its best efforts to provide data related to Client's activities in a timely
fashion upon request.
• Maxor pledges its total commitment to providing a fully auditable program, including allowing
Client's auditors access to all rebate contracts and purchase agreements with drug
manufacturers or suppliers, as well as access to Client's billing file and pharmacy payment
file for all PBM activity.
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