HomeMy WebLinkAboutResolution - 5334A - Contract - Advance Paradigm Inc - Mail Order Prescription Service - 11/07/19961-1
RESOLUTION NO. 5334A
Item 417
November 7, 1996
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to
execute for and on behalf of the City of Lubbock a Contract and all related documents by and
between the City of Lubbock and Advance ParadigM, Inc., to provide mail order prescription
service and a retail prescription card program for City of Lubbock employees, which contract is
attached hereto, which shall be spread upon the minutes of the Council and as spread upon the
minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein
in detail.
Passed by the City Council this 7th day of
ATTEST:
) 'a�'
R;yIijTamell, City Secretary
APPROVED AS TO CONTENT:
Human Resources
APPROVED AS TO FORM:
Dbfiald G. Vandiver, Fi.
Assistant City Attorney
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October 31, 1996
November 1996.
Litz
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RESOLUTION NO. 5334A
Item #17
November 7, 1996
ADVANCE PARADIGM, INC.
MANAGED PHARMACY BENEFIT SERVICES AGREEMENT
This Managed Pharmacy Benefit Services Agreement dated as of January 1, 1997, is entered into
by and between Advance ParadigM, Inc. and City of Lubbock.
PRELIMINARY STATEMENTS
A. Client provides a pharmacy benefit to certain individuals enrolled and entitled to benefits
under the Client's benefit plans.
B . Pursuant to the terms and conditions of this Agreement, Client desires to retain API to
provide, and API desires to provide for Client, pharmacy benefit management services including
without limitation (i) mail service pharmacy, (ii) claims processing, retail network management and
payment of claims to participating pharmacies for prescription drugs furnished to Eligible
Members, and (iii) clinical management, formulary and drug rebate services (collectively, the
"PBM Services").
TERMS OF AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the terms defined in this Section 1
shall have the meanings herein specified for all purposes of this Agreement, including
singular and plural forms of any terms herein defined.
"Agreement" shall mean this Managed Pharmacy Benefit Services Agreement.
"APT' shall mean Advance ParadigM, Inc., a Delaware corporation, together with its
wholly-owned subsidiaries.
"AWP" shall mean the then current average wholesale price for a prescription drug as listed
in a pharmaceutical industry pricing guide, including but not limited to the Medi -Span
Master Drug Pricing Source.
"Client" shall mean City of Lubbock, together with its wholly-owned subsidiaries.
"DUR" shall mean drug utilization review.
"Effective Date" shall mean the day that PBM Services begin for each Plan covered by this
Agreement.
"Eligibility Tape" shall have the meaning assigned to such term in Section 3(a) hereof.
"Eligible Member" shall mean each individual who is included on the Eligibility Tape and
the updates thereto as being entitled to benefits under a Plan.
"Generic Drug" means the chemical and generic name as determined by the United States
Adopted Names Council (USANC) and accepted by the Federal Food and Drug
Administration (FDA), of those drug products having the same active ingredients as a drug
product prescribed by its trade or brand name.
"MAC" shall mean the then current maximum allowable cost for a prescription drug listed
as a drug available from more than one manufacturer in API's pharmaceutical MAC pricing
formula, including but not limited to formulas utilizing the Medi -Span Master Drug Pricing
Source.
"Medi -Span Databases" means the data provided to API by Medi -Span, Inc. for use in the
Company's pricing methods and/or DUR programs.
"Original Contract" shall have the meaning assigned to such term in the Preliminary
Statements.
"Participating Pharmacy" shall mean each retail pharmacy participating in the API
Pharmacy Network.
"PBM Services" shall mean pharmacy benefit management services as defined in the
Preliminary Statements.
"Plan" shall mean each of the Client's prescription drug benefit plans for which API will
provide PBM Services under this Agreement.
"Prescription" shall mean a valid and legal order to dispense to an Eligible Member for his
or her own use a drug legally eligible for dispensing under the laws and regulations of the
United States, including the Food and Drug Administration and the state laws in which the
dispensing facility is located.
"Quarter" shall mean each three month period of a calendar year commencing on each
January 1, April 1, July 1 and October 1.
2. Plan Information. At least thirty (30) days prior to the Effective Date of each Plan,
Client shall provide API with certain Plan information not otherwise in the possession of
API and necessary for API to perform or provide PBM Services, including without
limitation benefit certificates, eligible drugs, co -pays, deductibles, maximum allowance
benefits, investigational drug usage, generic drug usage, and any drugs excluded under the
Plan.
3. Pharmacy Benefit Management Services. API shall provide PBM Services for
Client's Plans in accordance with the terms and conditions of this Section 3.
(a) Eli i bility Tape and Updates. At least seven (7) days prior to the Effective Date of
each Plan, Client shall provide API with a complete and final eligibility file in a
format consistent with API's requirements which shall identify all Eligible Members
and set forth all pertinent eligibility data (the "Eligibility Tape"). Client shall provide
updates to the Eligibility Tape to API in a format consistent with API's requirements
as frequently as mutually agreed to by the parties hereto. Subject to receipt of
confirmation from Client as to the accuracy of each update to the Eligibility Tape,
within two business days of API's receipt of such update, API shall enter the
eligibility data into its computer system and thereafter shall accept claims for covered
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Prescriptions that are dispensed to Eligible Members after the effective date of their
eligibility and deny claims for covered Prescriptions that are dispensed to terminated
members after the effective date of their termination. API and the Participating
Pharmacies shall be entitled to rely on the accuracy and completeness of the Eligibility
Tape and updates thereto provided by Client.
(b) Clinical Services. API shall provide clinical management, formulary and rebate
services in accordance with this Section 31b).
(I) Clinical Services. API shall periodically analyze the drug utilization of Eligible
Members and prescription prescribing patterns of the physicians participating in
Client's network. Based on these analyses, API shall present comprehensive
formulary drug utilization evaluations in report format and for Client's
designated personnel.
(ii) Formulary Services. In connection with the clinical services described above,
API shall maintain a formulary for the benefit of the Plan (the "Formulary") and
recommend clinically appropriate, cost effective strategies designed to promote
Formulary compliance. From time to time, as deemed necessary by API, API
will deliver to Client additional or replacement copies of the Formulary for
distribution to those physicians included in a Plan's physician network. Client
agrees to cooperate with API and, when possible, to facilitate the
implementation of recommended Formulary strategies, including without
limitation, hard edit blocks, differential patient co -pays, soft edits (e.g. on-line
formulary messages), promoting Formulary compliance to pharmacists and
therapeutic interchange programs.
(iii) Manufacturer Rebates. Upon adoption of the Formulary and meeting
reasonable, generally applicable requirements for participating in API's rebate
program, Client shall be eligible to receive rebates from those drug
manufacturers participating in API's rebate program with respect to certain
prescription drugs dispensed to Eligible Members (the "Rebates"). API shall
provide Client Quarterly statements reflecting the aggregate amount of Rebates
attributable to the Plan's drug utilization. The Rebate amount shall be
distributed to Client, net of any Clinical Services Fee, within thirty days of
receipt of rebate payments from all drug manufacturers for Quarter being
adjudicated.
(iv) Eligible Data. Drug utilization which has been submitted by any entity other
than API, specifically including Medicaid, Medicare or other state or federal
health care program which receives Rebates directly from drug manufacturers,
to drug manufacturers for discounts, rebates or other price reduction, shall not
be eligible to participate in API's rebate program. Client shall clearly identify to
API those Eligible Members whose drug utilization has been otherwise
submitted to drug manufacturers or whose claims have been or will be filed for
reimbursement with Medicaid, Medicare or any other state or federal health care
program. If Client fails to identify such members or claims and any drug
manufacturer's audit of its rebate program reveals improperly calculated rebates
involving such members and claims, then Client shall be solely responsible for
the reimbursement of any Rebates improperly made based on such drug
utilization. Notwithstanding the foregoing, this provision shall not be
construed to prohibit Client from participating in Medicare risk contracting.
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(c) Mail Service. API shall fill Prescriptions for Eligible Members and shall mail such
drugs or medications to such Eligible Members subject to the following terms and
conditions:
(i) Distribution of Information. API shall provide Client with reasonable copies of
its standard informational material explaining the mail service and the forms
necessary for Eligible Members to utilize mail service. Client shall distribute the
mail service informational materials and forms to all Eligible Members.
(ii) Delivery and Dispensing. API shall dispense through its mail service pharmacy
new or refill Prescription orders upon receipt from an Eligible Member of (i) a
valid Prescription order or a completed refill order form and (ii) the applicable
co -payment, if any. API shall cause the filled Prescriptions to be mailed to each
Eligible Member via common carrier at the address set forth in the Eligibility
List or as appearing on the face of the Prescription. API shall not be liable to
either Client or Eligible Member for any delay in delivery resulting from
circumstances beyond API's control as set forth in Section 15(k) of the
Agreement.
(iii) Mail Service Pharmacy. API shall operate its mail service pharmacy in
compliance with state and federal pharmaceutical laws and regulations,
including limitations imposed on controlled substances, and shall dispense only
those prescription drugs which, in its sole discretion, fulfill requirements of the
prescription writer and comply with applicable law. API shall have the right to
refuse to fill or renew a Prescription for any Eligible Member when the Eligible
Member has not paid his or her co -payment amount or, in the pharmacist's
professional judgment, the filling or renewing of such Prescription is not in the
best interest of the Eligible Member or the pharmacist has reason to doubt the
authenticity of the Prescription. API may from time to time implement
programs through its mail service pharmacy to promote Formulary products.
(iv) Generic Substitution. So long as mandatory generic substitution is a
component of the Plan design, if, in the professional judgment of the
dispensing pharmacist a Generic Drug will fulfill the requirements of a
Prescription and applicable law, then API's mail service pharmacy will fill the
Prescription with such Generic Drug unless the prescriber has specifically
designated "Dispense as Written" on the Prescription.
(v) Patient Profiles and DUR. API shall request information from each Eligible
Member to submit with his or her first mail order Prescription a form containing
information regarding, among other things, any drug allergies of such Eligible
Member. API shall utilize this information to develop a patient profile on each
Eligible Member which will include the information submitted by such member
as well as a history of Prescription Drugs dispensed to such member during the
term of this Agreement. Each mail order Prescription will be subject to DUR
based on the patient profiles and mail service utilization history as well as
concurrent DUR through the Advance Rx® claims adjudication system (as
further explained in Section 3(d)(iv) hereof). API shall not be liable for any
damages arising from the use or lack of use of such DUR services in
accordance with Section 10 of this Agreement.
(vi) Toll Free Client Service. API shall maintain, at its sole expense, toll free "800"
numbers for patient counseling for Eligible Members, Client inquiries and other
Client service or informational needs.
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(d) Retail API Pharmacy Network Services and Claims Adjudication. API shall
adjudicate claims for Prescription Drugs furnished by pharmacies under the Plan in
accordance with the following terms and conditions:
(i) Distribution of Materials. API shall provide Client with reasonable copies of its
standard informational material regarding the utilization of the API Pharmacy
Network and claim forms for use by Eligible Members when needed. Upon
receipt, Client will distribute all such information and claim forms to its Eligible
Members. Client shall provide each Eligible Member with an identification card
in a format mutually agreed to by API, for purposes of (among other things)
accessing the Participating Pharmacies.
(ii) API Pharmacy. Network. API has created a network of Participating
Pharmacies (the "API Pharmacy Network") that is available to provide
prescription drug services to Eligible Members using their identification cards.
API shall process claims submitted by the Participating Pharmacies in
accordance with API's agreements with such pharmacies. API shall furnish to
each Participating Pharmacy such information regarding the applicable Plan and
Eligible Members as is necessary for the operation of the Advance Rx® claims
adjudication system. Client hereby authorizes API to release such information
to the Participating Pharmacies as API, in its sole discretion, deems necessary
regarding the applicable Plan and Eligible Members to the Participating
Pharmacies.
(iii) Claims Adjudication. Through its Advance Rx® on-line claims adjudication
system, API shall (A) process electronic or manual claims submitted by
pharmacies; (B) process API claim forms submitted by Eligible Members; (C)
determine whether the claim qualifies for reimbursement in accordance with the
terms of the applicable Plan and the Eligibility Tape; and (D) calculate the
payment of such claims pursuant to the applicable Plan (each such claim an
"Approved Claim"). API shall notify the submitting Participating Pharmacy or
Eligible Member of nonreimburseable claims.
(iv) Concurrent Drug Utilization Review. Through its Advance Rx® system, API
shall provide on-line concurrent DUR messaging to the Participating
Pharmacies and will take appropriate action based on Plan specifications.
Concurrent DUR shall include, but not be limited to, the following edits: (A)
duplicate therapy; (B) early refills and frequency limitations; (C) duplicate drug;
(D) potential drug interaction(s), in which case the provider is notified on-line
and the level of severity would be indicated; (E) drug preference screening; and
(F) minimum/maximum dose range (which includes on-line alert of
pharmacist). API shall not be liable for any damages arising from the use or
lack of use of such concurrent DUR services in accordance with Section 10 of
the Agreement.
4. Fees and Rates.
(a) Fees for Services. Client agrees to pay API an administrative fee in consideration of
the claims adjudication, pharmacy network management services and payment of
claims by API in the amount of $0.50 per claim processed. In consideration of the
clinical and Formulary/Rebate services provided to Client, API shall retain 30% of
those Rebates paid based on Eligible Members' drug utilization.
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(b) Rates for Prescription Claims. During the term of this Agreement, Client agrees to
pay for Prescriptions dispensed to Eligible Members by the mail service pharmacy or
the Participating Pharmacies, as the case may be, at the rates set forth below.
Price of Mail Service Prescriptions:
Brand Drugs: AWP less 16% plus $2.00 dispensing fee
Generic Drugs: MAC or AWP less 45% plus $2.00 dispensing fee
Price of Retail Pharmacy Network Prescriptions:
PPO Network (all major chains + selected independents)
Brand Drugs: AWP less 13% plus $2.50 dispensing fee
Generic Drugs: MAC plus $2.50 dispensing fee
5. Payment.
(a) Statement of Account. API shall submit to Client on a semi-monthly basis a
statement of account (the "Statement of Account") that reflects the amount due for the
Prescriptions dispensed and the fees due for the applicable period.
(b) Payment of Statement of Account. Client agrees to pay the amount due reflected on
the Statement of Account within two (2) business days of receipt of the Statement of
Account by (I) wire or electronic funds transfer to an account designated by API or
(ii) by funding an account on which API will have authority to withdraw funds in the
amount of the Statement of Account.
(c) Payment of Clinical Services Fee. API shall be entitled to withhold the amount of its
Clinical Services Fee from each rebate payment to be made to Client under Section
iii .
(d) Cessation of Services. Should Client, for any reason, fail to pay timely any
Statement of Account in accordance with Section 5(b) hereof, or become insolvent or
generally unable to pay its creditors when due, API shall be entitled to cease
adjudication of claims and/or the dispensing of Prescriptions under this Agreement
while maintaining all of API's rights hereunder.
(e) Associated Costs Paid by Client. API shall bear the costs related to the services
provided by it under this Agreement, including reasonable Formulary production,
except that Client shall be responsible for costs associated with distribution of
materials to Eligible Members or providers. In the event Client requests identification
cards, non-standard services, forms, materials or documents, the additional cost of
such services or materials shall be paid by Client at an additional charge to be
mutually agreed upon by the parties in writing before the services are provided.
6. Records, Reports and Profiles..
(a) Maintenance of Records. API shall maintain, in original form, on microfilm or
computer tape, documentation of all claims processed and Prescriptions filled via mail
service for seven (7) years. Subject to Section 11(a) hereof, all such records, while
maintained by API, shall be accessible to Client for examination and audit during the
term of this Agreement. In addition, API shall maintain, in original form, on
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microfilm or computer tape, a copy of this Agreement in accordance with applicable
law.
(b) Management Information Reports. API shall provide Client with those reports
selected from API's standard reporting package. Any reports requested by Client
other than API's standard reports shall be considered "Special Reports." Client
agrees that for each Special Report, Client shall pay API for the programming
necessary to produce such Special Reports at a rate of (i) $100 per in-house man-hour
of programming time, or, (ii) in the event API must outsource such programming
services to a programmer from its software vendor, at the cost of such services,
provided that API agrees to comply with the following procedure:
(i) API must receive a request for a Special Report from an employee in Client's
Pharmacy Programs Department who has been identified by Client in writing as
a "designated person" for purposes of this Section 6(b);
(ii) API must deliver an estimated cost of programming the Special Report to such
designated person; and
(iii) API must receive authorization from such designated person prior to
programming and running the Special Report.
API shall be entitled to rely on Client's representations regarding the authority of any
employee who acts as a "designated person" under this Section 6(12).
7 Term and Renewal.
Unless otherwise terminated in accordance with Section 8 herein, or otherwise extended,
this Agreement shall continence on January 1, 1997 and end on December 31, 1997. This
Agreement shall automatically renew for a twelve-month period on January 1, 1998, and
on each year thereafter (each a "renewal date"), unless either party notifies the other in
writing at least ninety (90) days prior to the renewal date of such year of its intent to
terminate this Agreement.
8. Termination and Default.
(a) Termination. In addition to API's right under Section 5(c,) hereof, this Agreement
may be terminated as follows:
(i) Upon the mutual written consent of the parties hereto;
(ii) Either party may terminate this Agreement at any time in the event of a material
default by the other party. Such termination shall be effective thirty (30) days
after receipt by the defaulting party of written notice specifying the default,
unless the default is cured before the end of the thirty -day period;
(iii) At either party's option, if the other party becomes insolvent or seeks protection
voluntarily or involuntarily, under any bankruptcy laws;
(iv) The parties acknowledge that federal and state healthcare reform measures and
legislation are continuously considered by government agencies and that the
relationships among health care providers and organizations are continuously
challenged through litigation. If such proposal are enacted or if the judgment in
any such litigation has a significant impact on this Agreement as a whole or
upon any segment as a part, upon notice from either party, the parties agree to
negotiate in good faith for a sixty-day period the terms and conditions of this
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d
Agreement to address any problems such legislation or judgment may cause. If
the parties are unable to reach agreement within such sixty-day period, either
party may terminate this Agreement upon no less than thirty (30) days' prior
written notice to the other party.
(b) Default. Payment Obligations and Interest.
(i) Unfulfilled Payment Obligations. In the event either API or Client terminate
this Agreement in accordance with the terms of Section 8(a), all unfulfilled
payment obligations for any of the services provided herein shall be paid within
thirty (30) days of the effective date of such termination; provided that all
Rebates shall be payable to the Plan within thirty (30) days of receipt from the
manufacturer.
(ii) Interest on Late Payments. If Client fails to pay any amounts due under this
Agreement within fourteen (14) days of the due date, such amount shall bear
interest from the date due until paid in full, at the rate of one and one-half
percent (1.5%) per month unless such rate exceeds the maximum rate allowable
by applicable law, in which case such amounts shall bear interest at the
maximum legally allowable rate.
9. Indemnification.
Each party and its officers, directors, employees, agents, successors and assigns (each an
"Indemnitee") shall be indemnified and held harmless by the other party (the "Indemnifying
Party") against any and all claims, loss, damage, costs and expenses ("Loss"), including,
without limitation, attorneys' fees and expenses, actually incurred by any Indemnitee
arising out of or resulting from the actions or omissions of the Indemnifying Party. Client
further agrees to indemnify and hold API, its officers, directors, employees, agents,
successors and assigns harmless from any Loss actually suffered or incurred arising out or
resulting from any claim or demand by current or previous Eligible Members relating to this
Agreement, including without limitation any disclosures made by API, its officers,
directors, employees, agents, successors and assigns in accordance with the terms and
conditions hereof.
10. Limitation of Liability.
IN NO EVENT SHALL API BE LIABLE TO CLIENT OR ANY ELIGIBLE MEMBER
FOR ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOST
PROFITS, ARISING OUT OF OR RELATED TO APPS PERFORMANCE UNDER
THIS AGREEMENT OR BREACH HEREOF, EVEN IF API HAS BEEN ADVISED OF
THE POSSIBILITY THEREOF. API'S LIABILITY TO CLIENT UNDER THIS
AGREEMENT, IF ANY, SHALL IN NO EVENT EXCEED THE TOTAL AMOUNT OF
COMPENSATION DUE API FOR THE PRIOR TWELVE (12) MONTHS OF THIS
AGREEMENT.
API RELIES ON MEDI-SPAN OR INDUSTRY COMPARABLE DATABASES IN
PROVIDING CLIENT AND ELIGIBLE MEMBERS WITH DRUG UTILIZATION
REVIEW SERVICES. API HAS UTILIZED DUE DILIGENCE IN COLLECTING AND
REPORTING THE INFORMATION CONTAINED IN THE DATABASES AND HAS
OBTAINED SUCH INFORMATION FROM SOURCES BELIEVED TO BE RELIABLE.
API, HOWEVER, DOES NOT WARRANT THE ACCURACY OF REPORTS, ALERTS,
CODES, PRICES OR OTHER DATA CONTAINED IN THE DATABASES. THE
CLINICAL INFORMATION CONTAINED IN THE DATABASES AND THE
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FORMULARY IS INTENDED AS A SUPPLEMENT TO, AND NOT A SUBSTITUTE
FOR, THE KNOWLEDGE, EXPERTISE, SKILL, AND JUDGMENT OF
PHYSICIANS, PHARMACISTS, OR OTHER HEALTH-CARE PROFESSIONALS IN
ELIGIBLE MEMBERS' CARE. THE ABSENCE OF A WARNING FOR A GIVEN
DRUG OR DRUG COMBINATION SHALL NOT BE CONSTRUED TO INDICATE
THAT THE DRUG OR DRUG COMBINATION IS SAFE, APPROPRIATE OR
EFFECTIVE IN ANY ELIGIBLE MEMBER.
11. Audit.
(a) Audits of Eligible Members and Business Records. Client shall have the right to
inspect and audit the business records of API which directly relate to billings made to
Client for claims reimbursement. API shall have the right to inspect and audit, or
cause to be inspected and audited, the books and records of Client directly relating to
the existence and number of Eligible Members. Client and API shall fully cooperate
with representatives of each other and with independent accountants hired by either
party to conduct any such inspection or audit. Such audits shall be at the auditing
party's sole expense and shall only be made during normal business hours, following
fifteen (15) days written notice, and without undue interference to the audited party's
business activity. If, after completion of the audit under this Section I I (a), the audit
reveals a discrepancy in the results of the audit and the previous calculations of the
audited party, then the auditing party shall deliver written notice which sets forth in
reasonable detail the basis of such discrepancy. The parties shall use reasonable
efforts to resolve the discrepancy within 30 days following delivery of such notice,
and such resolution shall be final, binding and conclusive upon the parties hereto. If
API and Client are unable to reach a resolution within such 30 -day period, the parties
shall resolve such dispute in accordance with Section 14 hereof.
(b) Right to Audit Rebates. Client, at its sole expense, shall have the right to audit the
Rebates once in each twelve-month period (following fifteen (15) days written notice
to API) for the purpose of validating the accuracy of the rebate amounts distributed to
Client by API. Client and API agree that an independent accounting firm agreeable to
the parties hereto shall conduct such audit, and that such firm will sign a
confidentiality statement with API insuring that all details and terms of all
manufacturers rebate contracts with API (except the total aggregate amount due to
Client) will be treated as confidential to API and will not be revealed in any manner or
form by or to any person or entity. The report and determination of the independent
accounting firm under this Section 11 (b) shall be final, binding and conclusive on
API and Client.
(c) Payment of Discrepancies. Upon a final and conclusive determination of a
discrepancy revealed by an audit procedure under this Section 11, the party which
owes money shall pay such sums to the other party within fifteen (15) days of the
delivery of the conclusive audit findings.
12. Exclusivity.
Client hereby grants API during the term of this Agreement, and any renewals hereof, the
exclusive right to provide pharmacy benefit management services to Client, including
without limitation clinical services, outcomes management, disease state management, mail
service claims adjudication and retail pharmacy network management. Client further agrees
that, during the term of this Agreement, and any renewals hereof, it will not negotiate,
contract, or agree with any drug manufacturer for the purpose of obtaining drug rebates.
Client also agrees to cancel any existing agreements or contracts with any drug
cc/CityofLubbock 9
manufacturers related to such drug rebates as of the Effective Date of this Agreement unless
otherwise approved by API, which approval shall not be unreasonably withheld.
13. Confidentiality.
(a) Confidential and Proprietary Information. Client and API each recognize and
acknowledge that, by receipt and possession of certain information relating to the
business operations of the other, each will discover certain of the other's confidential
and proprietary information, skills, know-how, technical expertise, and methods.
This confidential and proprietary information includes, but is not limited to: (a) the
terms of this Agreement, (b) the format of all reports generated by the parties under
this Agreement, and (c) details of the operation of the PBM Services. Each party
acknowledges and agrees that such information is confidential, valuable and
proprietary to the business of each party, and that each party's success and ability to
compete depends on keeping such information confidential. Each party hereto
covenants and agrees not to, directly or indirectly, and agrees to cause its officers,
directors, employees, agents and affiliates not to, use, publish, disseminate or
otherwise disclose, any of the other party's confidential or proprietary information
now or later possessed by each, without prior written consent of the other party. API
hereby acknowledges that Client is a municipal corporation subject to the Texas
Public Information Act, Chapter 552, Texas Government Code, and release of
information upon order of the Texas Attorney General or a court of competent
jurisdiction by Client shall not be a breach of this Agreement.
(b) Confidentiality of Eligible Members. The parties shall maintain the confidentiality of
any information relating to Eligible Members in accordance with applicable laws and
regulations. Client shall insure that the release of information relating to Eligible
Members to Client is duly authorized. Upon receipt of a validly issued subpoena or a
request for information that is signed by an Eligible Member, API shall be entitled to
release such information in accordance with the subpoena or request. API shall be
entitled to assume the genuiness of all signatures, the authenticity of all such requests,
the conformity of copies of such requests to the original and that the persons
executing such requests have full power and authority to deliver such request.
(c) Breach of Confidentiality Covenant. API and Client acknowledge that any violation
or breach of confidentiality would cause irreparable harm and that such harm cannot
be adequately compensated in money damages. API and Client agree that any such
violation or breach may be enjoined by any court of competent jurisdiction, without
waiver of any other right to claim damages incurred by either API or Client in
connection with such a violation. API hereby acknowledges that Client is a municipal
corporation subject to the Texas Public Information Act, Chapter 552, Texas
Government Code, and release of information upon order of the Texas Attorney
General or a court of competent jurisdiction by Client shall not be a breach of this
Agreement.
14. General.
(a) Notice. Any notice required to be given pursuant to the terms and provisions of this
Agreement shall be in writing and shall be sent by certified mail, return receipt
requested, or by overnight delivery service to the parties at the addresses below or
such other address as shall be specified by the parties by like notice
cc/CityofLubbock 10
to API at:
Advance ParadigM, Inc.
Attn: Vice President - Legal Affairs
P.O. Box 542906
Dallas, Texas 75354-2906
and to Client at:
City of Lubbock
Attn: Ron Shuffield
1625 13th Street
Lubbock, TX 79401
(b) Binding Nature and Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns. Neither party may
assign this Agreement without the prior written consent of the other; provided,
however, that either party may transfer or assign its rights and obligations under this
Agreement, to any affiliate, and provided further that no such assignment shall have
the effect of releasing such party from any of its obligations under this Agreement.
(c) Headings and Interpretation. The headings of the various sections of this Agreement
are inserted for convenience only and do not, expressly or by implication, limit,
define or extend the specific terms of the section so designated.
(d) Governing Law. The validity, enforceability, and interpretation of this Agreement
shall be determined and governed by the internal laws of the State of Texas (and not
the law of conflicts).
(e) Entire Ageement. This Agreement contains all the terms and conditions agreed upon
by the parties, and supersedes all prior understandings, writings, proposals,
representations, or communications, oral or written, of the parties hereto.
(f) Authorijy. API and Client warrant that each has full power and authority to enter into
and perform this Agreement, and the person signing this Agreement on behalf of each
party certifies that such person has been properly authorized and empowered to enter
into this Agreement on behalf of such party.
(g) No_ n -Competition in Hiring. During the term of this Agreement, and for a period of
one (1) year thereafter, Client shall not, without the prior written consent of API,
knowingly employ or solicit for hire, or knowingly allow its officers, directors,
agents or affiliates to employ or solicit for hire, any employees of API.
(h) Non -Waiver. The failure of either party to insist, in any one or more instances, upon
performance of any of the terms, covenants or conditions of this Agreement shall not
be construed as a waiver or a relinquishment of any right or claim granted or arising
hereunder or of the future performance of any such term, covenant, or condition, and
such failure shall in no way affect the validity of this Agreement or the rights and
obligations of the parties hereunder.
(i) Offset. In the event of a payment default by Client which remains uncured for a
period of fourteen (14) days from the date due, API shall be entitled, and Client
hereby authorizes API, to offset the amount of such payment defaults against any
Rebates payable to Client hereunder.
cc/CityofLubbock 11
(j) Relationship of Parties. This Agreement shall not constitute or otherwise imply a
joint venture, pooling arrangement, partnership or formal business organization of
any kind. Both parties shall be considered independent contractors and neither party
shall be considered an agent of the other. Under no circumstances shall employees of
one party be deemed the employees of the other party.
(k) Force Majeure. Neither party shall be liable for any failure or delay in performing all
or part of its obligations under the terms of this Agreement resulting from
unavailability of pharmaceuticals, legislative action, war, acts of any person engaged
in a subversive activity, sabotage, riot, strikes, slow -downs, lock -outs, or labor
stoppage, freight embargoes, fires, explosions, flood, earthquake or other acts of
God, or by reason of the judgment, filing or order of any court or agency of
competent jurisdiction occurring subsequent to the signing of this Agreement, or any
other circumstances beyond its control.
(1) Survival. Should any part, term or condition of this Agreement be declared illegal or
unenforceable or in conflict with any other laws, the remaining provisions shall be
valid and not affected thereby.
(m) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together shall constitute
one and the same instrument.
(n) Departments of Insurance. The parties acknowledge that each party is subject to the
statutes and regulations in the states in which this Agreement will be performed. The
parties acknowledge that the laws and regulations of several states permit
Departments of Insurance to have access to API's books and records relating to this
Agreement for purpose of examination, audit and inspection, subject to confidentiality
obligations.
(o) Further Assurances. From time to time upon request and without further
consideration, the parties hereto shall, and shall cause their subsidiaries, to execute,
deliver or acknowledge such documents and do such further acts as the other party
hereto may reasonably require to effectuate its obligations contemplated by this
Agreement.
cc/CityofLubbock 12
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their proper and duly authorized officers on the date first above written. By executing
the Agreement, the undersigned individuals hereby warrant and represent that they have read this
Agreement in its entirety and agree to all its terms.
AD'
By:
Nan
Title
CITY OF LUBBOC
By:
Name: Alex T " Cooke
Title: MayorPro Tem
Attest:
Approved as to Content:
Mary Andre4, Director of Human Resources
Approved as to form:
G. Vandir'er, Assistant City A
cc/CityofLubbock 13
FIRST AMENDMENT TO ADVANCE PARADIGM, INC.
MANAGED PHARMACY BENEFIT SERVICES AGREEMENT
This First Amendment to the Managed Pharmacy Benefit Services Agreement effective as of July 1,
1999 (this "Amendment") is entered into by and between Advance Paradigm, Inc. ("API") and City of
Lubbock (the "Client").
WHEREAS, API and Client (collectively, the "Parties') entered into that certain Pharmacy Benefit
Services Agreement effective as of January 1, 1997 (the "Agreement");
WHEREAS, the Parties now desire to amend the Agreement to change the term of the Agreement;
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration
the receipt and sufficiency is hereby acknowledged, the parties agree to amend the 'Agreement as
follows:
1. Amendment. The provision set forth in Section 7 of the Agreement is hereby amended and
restated in its entirety as follows:
"Unless otherwise terminated in accordance with Section 8 herein, or otherwise extended, this
Agreement shall commence January 1, 1997 and end on November 30, 1999. This Agreement
shall automatically renew for a twelve-month period on December 1, 1999, and on each
December l st thereafter (each a "renewal date"), unless either party notifies the other in writing
at least ninety (90) days prior to the renewal date of such year of its intent to terminate this
Agreement."
2. Effect of Amendment. Except ,as specifically amended by this Amendment, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered
by their proper and duly authorized officers as of the date first above written.: By executing this
Amendment, the undersigned individuals hereby warrant and represent that they have read this
Amendment in its entirety and agree to all its terms.
ADVANCE PARADIGM, INC.
By: r ,_
NamNamir Laura 'Joh sen
Title: Senior Vice President, General Counsel
CITY=
By:
44
NIN
Title: MAYOR
ATTEST:
Kayt, a Parriell, City Secretary
PLACty- bboddlstAmnd-ld