HomeMy WebLinkAboutRES 521 Draft 01 2006-2008 Div or
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COUNTY OF HAWAII STATE OF HAWAII
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RESOLUTION NO. 521 Q8
RESOLUTION AUTHORIZING AN AGREEMENT AMONG THE COUNTY OF
HAWAII, NACo, AND CAREMARKPCS RELATING TO A PRESCRIPTION DRUG
DISCOUNT CARD PROGRAM FOR THE RESIDENTS OF HAWAII COUNTY.
WHEREAS, the cost of living in Hawaii is among the highest in the United States; and
WHEREAS, the cost of prescription medications continues to rise; and
WHEREAS, there are residents in the County of Hawaii who lack drug plans or have
drug plans that do not provide sufficient coverage; and
WHEREAS, the Council seeks to assist its residents in defraying the cost of medications;
and
WHEREAS, the Counties of Hawaii, Maui, Kauai and City and County of Honolulu
comprise the organization entitled the Hawaii State Association of Counties (HSAC); and
WHEREAS, HSAC is a member of the National Association of Counties (NACo), an
organization whose membership totals over 3,000 cities and counties nationwide; and
WHEREAS, NACo conducted a request for proposals and selected CazemarkPCS Health
L.P. (Cazemazk) as the pharmacy benefits provider to provide a prescription drug discount card
program for member counties to offer to their residents; and
WHEREAS, the County of Hawaii is eligible to participate in this prescription drug
discount card program through HSAC's membership in NACo; and
WHEREAS, residents of the County of Hawaii will have the opportunity to participate
in this prescription drug discount cazd program if the County enters into an agreement with
NACo and Cazemazk; and
WHEREAS, membership fees for the prescription drug discount cazd program are not
required and program materials are provided at no cost to pazticipating counties; and
WHEREAS, if subject to the State procurement code, the prescription drug discount cazd
program services offered by Cazemazk may be procured as a small purchase pursuant to section
103D-305, Hawaii Revised Statutes, based upon its provision of services with no payment
payable to Cazemazk by the County of Hawaii; and
WHEREAS, the County of Hawaii, through its Finance Department, shall be pazty to an
agreement with NACo and Caremark based on the County's affiliation with and membership in
HSAC and its eligibility for participation in the Cazemazk program through NACo; and
WHEREAS, this prescription drug discount cazd program will enable any resident of the
County of Hawaii to receive a prescription drug discount identification cazd at no cost; and
WHEREAS, any resident, upon display of this prescription drug discount identification
cazd at a participating retailer, shall be able to obtain a discount at the register; and
WHEREAS, the provisions of the joint agreement are described in Exhibit 1 attached
hereto; now, therefore,
BE IT RESOLVED BY THE COUNCIL OF THE COUNTY OF HAWAII that the
Finance Director will review the attached agreement for the purpose of entering into an
agreement with NACo and Cazemazk, in the form attached as Exhibit 1, for an initial term from
the execution of the agreement to July 31, 2009, with automatic renewal for successive one-yeaz
terms thereafrer, subject to the provisions of the agreement for termination by the parties; and
2
BE IT FINALLY RESOLVED that the County Clerk shall forward a copy of this
resolution to the Director of Finance and that the Director of Finance is hereby authorized to
carry out the terms of this resolution.
Dated at Kona , Hawaii, this 21st day of Februarv 2008.
INTRODUCED BY:
COUNCI MBE , CO TY OF HAWAII
COUNTY COUNCIL ROLL CALL VOTE
County of Hawaii AYES Noes ABS ex
Hilo, Hawaii FORD X
HIGA g
I hereby certify that the foregoing RESOLUTION was by HOFFMANN X
the vote indicated to the right hereof adopted by the COiJNCIL of the IKEDA X
County ofHawai`ion February 21, 2008
JACOBSON X
NAEOLE X
ATTEST: PILAGO X
YAGONG g
YOSHIMOTO
8 0 1 0
" Reference: C-986/FC-2¢7
vCl ~ C3.Ww'd"'
COUtN`F CLERK CHAIRMAN & I G FICER RESOLUTION NO. 821 OS
3
Deaz County Officiais:
The Prescription Drug Cazd Program conh~act is attached. Please review the checklist on p. 1 of the
contract document. Incorrect checklists or contracts will result in a delayed implementation of the
program.
Please follow these directions carefully:
1. Counties, Pazishes, Boroughs sign exhibit C of the contract which attaches the county to the overall
NACo contract, If your county requees a copy of the signature page beazing the NACo and Cazemazk
signatures, this can be provided to you via .PDF on request.
2. Once signed, mail the Exhibit C page (this is on page 1 S ojthe contract with BLANX signature
lines) and the checklist to:
Andrew Goldschmidt
Director of Membership Mazketing
National Association of Counties
25 Massachusetts Ave, NW 5'° Floor
Washington, DC 20001
3. Once the contract is received, our executive duector will sign it and pass it on to Cazemazk for final
signature. You may start your internal planning process to promote the program.
4. While the final signatures are being completed, please forwazd your logo or seal via a-mail to
elandsman@naco.org or agoldschmidt@naco.org (if you prefer, you may have the cazd simply read XYZ
County or XYZ Countyltx) and specify the quantity of cazd brochures you would like to order by filling out
the checklist. Caremark will draw up proofs for your approval. Once they are approved by your county, the
materials will be completed and in your hands by the time the contract returns with the final signature.
You may estimate 5-10 weeks from the date the contract is returned until you can distribute the cards
to your county residents. A key note, any non pre-approved press releases or other information to be
distributed on the program must come to NACo and Cazemazk's attention for approval prior to use.
Please contact me or Andrew if you have any questions or need further information. NACo looks forward
tc working with you on this exciting program!
Sincerely,
Emily Landsman
Membership Coordinator, II
P.S. - If you need to access the collateral materials on the program, you can access those by logging in
to the NACo's members only portion of the web site at www.naco.org. Please contact me at
(202) 942-4242 or elandsman@naco.org if you need assistance.
The above message and enclosed attachments are confidential and should not be shared outside of
the county officials considering the program without permission from NACo.
N A C; ~
Na+nelAswcietionotCoun(ces
Exhibit "1"
*This checklist is etat part of the NACo conlraM, however, please return it with your signed contract.
*Incomplete or incorrect checklists will delay implementation ojthe program *
NACo Prescription Drug Program checklist
County Name/State: Date contract returned to NACo.•
1. Who is the ONE contact person in the county with whom we may communicate about this program?
Name and title
Address (wJ City, State, Zip)
Phone Fax
E-mail (We must have your a-mail address!)
2. What is your county's anticipated start-up date for the program? CURRENT START UP TIME IS
8-]0 WEEKS FROM THE TIME THE CONTRACT IS RETURNED TO NACo. Please plan your county's
roll out of the program accordingly.
3. Please choose a design for the discount cards: (YOUMUST CIRCLE ONE)
a. "County Name" or "County Name}3x"
b. Logo/seal on cards
a. Be sure to a-mail a 6[ack and white logo/seal to agoldschmidt
a(~jtaca.org
or elandsman~r~jtaco. org in a .jpg or ,tiff
format
b. Put "(COUNTYNAME) LOGO" in the subject line ofyour a-mail
c. Other. You must contact NACo if you do not choose either a or b.
4. How many cards aze you requesting? (We are advising 20% to 25%ofyour county's total population,
on average. Some counties may need more.)
a. What is your county's population?
b. Do you need cards/posters in Spanish? How many?
5. Please provide a street address for delivery of cards. Cards will be sent via UPS Ground.
NO PO BOXES!
6. What is your county's web address (if available)?
Will this program have its own page? (Please provide)
What number would county residents call to pick up a card?
s**s~rer+*«?*~r*•**r*sr:s**#*rrer*•s<rr*******st*eers***#*sarss*+*s?wss**~r?r¦*~*:**~
This section forNACo use only
Copy of signed contract sent to Caremark?
Signed contract back from Caremark?
Proofs approved?
f - ~ NeliaidAsfaciaionof C°unlias
Notes:
CAREMARKPCS HEALTH, L.P.
MANAGED PHARMACY BENEFIT SERVICES AGREEMENT
CONSUMER CARD PROGRAM
THIS RESTATED AGREEMENT (the "Agreement") is effective beginning March 1, 2006 (the "EffeMive
Date") among National Association of Counties ("Customer"), counties that are members of the National Association of
Counties ("Member County") and CaremazkPCS Health, L.P., formerly known as AdvancePCS Health, L.P.
("Caremark"), for the purpose of delineating the terms and conditions under which Caremark will provide certain
managed pharmacy benefit services to Member County and Customer. This restated agreement will amend and replace all
existing Member County Agreements.
Customer agrees that it will require each Member County to execute an individual agreement with Caremazk in the form
attached hereto as Exhibit C (the "Member County Agreement") prior to Caremazk's providing Services to such
Member County. Caremark will not provide Services to Member County prior to the receipt of the Member County's
execution of the Member County Agreement.
I. STATEMENT OF SERVICES 1 OBLIGATIONS.
1.2 Services. Caremark will provide Member County the services as set Forth in this Section 1, and the
services described in any attachment, addendum or amendment hereto (collectively the "Services"). Caremazk may
make changes to the Services from time to time so long as such changes do not materially alter any of the provisions of
this Agreement.
1.3 Participating Pharmacies. Caremark has created a network of Participating Phartnacies, which will
perform pharmacy services for Participants.
1.4 Pharmacy Help Desk and Voice Response Unit Caremark will provide Participating Pharmacies
with help desk assistance and access to Caremazk's voice response unit during Caremazk's hours of operation.
1.5 Claims Processing.
a. Submission of Claims. Caremark will adjudicate Claims submitted by Participating
Pharmacies to Caremark in accordance with the Participating Pharmacy's agreement with Caremark and the
Consumer Card Program.
b. Collection at Point of Sale. Customer and Member County acknowledge that Participating
Pharmacies will collect from the Participant one hundred percent (100%) of the applicable prescription price,
discounted at the rates set forth on Exhibit B as applicable, plus a transaction fee from the Participant.
1.5 Customer Service. Caremazk will make available to Customer, Member County and Participants a
toll free number during those hours of operation maintained by Cazemark. Staff will be available to answer questions
on the Consumer Card Program and Consumer Card Program guidelines.
1.6 Identification Cards. Caremark will, at its own cost, produce identification cards for Participants,
which contain Member County's and Customer's logo(s). Identification cards will be available to any individual the
Member County or Customer deem appropriate. Caremazk will work with Member County on the distribution method
far identifcation cards; provided, however if Member County requests that Caremark mail the identifcation cards to
Members, postage and handling charges will apply. The Participant shall be responsible for paying for any
prescriptions obtained while using the identification cazd.
1,7 Clinical Services and Drug Utilization Review ("DUR").
a. Clinical Services. Caremazk may provide to Member County its member compliance
programs and other programs designed to ensure proper drug utilization and encourage the use ofcost-effective
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This document contains proprietary information of Caremark, and may rwc be used for any purpose other Wan to evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed [o others for any purpose.
medications. These programs may include mailings to Participants with active prescriptions for targeted drug
products or drug classes or to let Participants know that they may qualify for participation in a clinical trial
program. Such mailings may include Participant and drug specific information andlor general educational
material. Participants, by notifying Cazemazk, may opt-out of such programs.
b. DUR Services. Caremark will provide its automated concurrent DUR Services for Claims.
The information generated in connection with DUR Services is intended as an economical supplement to, and
not as a substitute for, the knowledge, expertise, skill, and judgment of physicians, pharmacists, or other health
caze providers in providing patient care. Providers aze individually responsible far 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. Notwithstanding anything set forth in this Agreement,
Caremazk will have no obligation to acquire information concerning any Participant beyond the information
that is included in Caremark's eligibility records or the Claims submitted by Participating Pharmacies in
connection with the Consumer Cazd Program.
1.8 Formulary Services. Caremark will administer an open formulary for the Member County and will
provide certain Services that aze designed to provide useful clinical information to physiciams (the "Formulary
Services"). Caremark may make changes to the Formulary Services described in this Agreement from time to time, and
will notify Member County and Customer of any material changes to any formulary management programs. In all
cases, the prescribing physician shall have final authority over the drug that is prescribed to the Participant.
a. Rebate Contracts. Caremark contracts with certain Manufacturers for Rebate programs.
b. Disclosure of Manufacturer Fees. Caremark may receive fees or other compensation from
Manufacturers, including, without limitation, administrative fees not exceeding three percent of the aggregate
cost of the pharmaceutical products dispensed to participants, and fees for property provided or services
remdered to a Manufacturer (which may include providing physicians clinical messages consistent with the
Performance Drug List, as defined below). Cazemazk's specialty pharmacies may also receive fees from
Manufacturers for products and services provided. In addition, Cazemazk's mail order and specialty
pharmacies may negotiate on their own behalf directly with Manufacturers for discounts, including rebated
discounts based on mazket shaze or other factors. The teen Rebates as used in this Agreement does not include
these fees and discounts which belong exclusively to Caremark or Cazemazk's mail order or specialty
pharmacies, respectively.
c. Participant Authorizations and Disclosures. Customer and Member County shall comply
with all Laws applicable to it as a sponsor of the Services or as otherwise consistent with its obligations under
this Agreement.
d. Additional Participant Discounts. Cazemark may provide a program that will provide
Participants with additional manufacturer discoants on certain drugs at the point of sale. From time to time,
Caremark may revise the list of drugs that have additional participant discounts. The current list of drugs on
which Participants may receive additional discounts is available upon request. Cazemark will timely notify
Member County and Customer of any revisions to this list of drugs.
1.4 Management Reports. Caremark will provide Member County and Customer with Caremazk's
standard management reports in connection with the Services, which reports may change from time to time at
Caremark's discretion. Member County and Customer may elect to receive a reasonable number of the standard
management reports made available by Caremark,
1.10 Mail Service Program. Cazemazk may provide to Member County mail order pharmacy services
through its mail order pharmacy facilities. For the duration of this Agreement, Member County agrees that it will offer
only Caremazk mail order pharmacy services for its Participants covered under this Agreement, as further described
below.
Caremark shall fill prescriptions for Participants and shall mail such drugs or medications to such Participants subject to
the following terms and conditions:
NACo k3-v2.doc (02/2412006) (RzClaiml Page 2 of29
This document contains proprietary information of Caremark, and may not be used for any pupose other than t0 evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed to others for any purpose.
a. Distribution of Information. Caremark shall provide Participants with its standard
informational material explaining the mail service and the forms necessary for Participants to utilize mail
service. Participants will have toll-free telephone access to a pharmacist and customer service representative.
Access to a phartacist will be available 24 hours per day, seven days per week.
b. Delivery and Dispensing. Cazemazk shall dispense through its mail service pharmacy new
or refit! prescription orders upon receipt from a Participant of (i) a valid prescription order or a completed refill
order form and (ii) the applicable payment. Caremark shall cause the filled prescriptions to be mailed to each
Participant via common carrier at the address appearing on the face of the prescription so long as such
addresses are in the United States. Caremark shall not be liable to Member County, Customer or Participant
for any delay in delivery resulting from circumstances beyond Caremazk's control as set forth in Section 6.2.
Caremazk's mail order pharmacies may dispense drugs even if the prescription is not accompanied by the
correct amount however, Member County and Customer acknowledge and agree that Caremark may refuse to
fill any prescription that is either not accompanied by the corect amount and/or for any Participant who has an
unpaid balance with Cazemazk.
1.11 Preferred Drug Program. Cazemark and the retail Participating Pharmacies will work together to
encourage the use of Prefered Drugs by (i) identifying appropriate opportunities for converting a prescription from a
non-Prefered Drug to a Preferred Drug, and (ii) contacting the Participant and the prescriber to request that the
prescription be changed to the Prefered Drug. A Preferred Drug is one on the Performance Drug List, which has been
developed by Caremark as a clinically appropriate and economically advantageous subset of the Caremark Formulary,
as revised by Caremark from time to time.
1.12 Specialty Pharmacy. Caremark's specialty pharmacy service will be provided by a Cazemazk
specialty pharmacy entity or its affiliate ("Caremark SpecialtyRr"), and offers a distribution channel for certain
pharmaceutical products that are generally biotechnological in nature, are given by injection, or otherwise require
special handling ("Specialty Medications").
Caremark SpecialtyRx shall provide prescription fulfillment and distribution of Specialty Medications and supplies,
pharmaceutical caze management services, as well as the types of Service that Member County receives under this
Agreement, including but not limited to customer services, utilization and clinical management, integrated reporting and
Claims processing ("SpecialtyRx Services").
Cazemark SpecialtyRx may receive prescriptions from Participants through an affiliated Caremark mail facility or
directly via the U.S. Mail or commercial carier at the address specified by Caremark from time to time and may also
receive prescriptions from physicians by fax or by U.S. MaiUcommercial carrier. In accordance with the Consumer
Card Program, Caremark SpecialtyRx shall dispense Covered Items in accordance with those prescriptions and mail the
Covered Items to Participants at the designated address, so long as such address is located within the United States.
Cazemazk SpecialtyRx may not dispense drugs to Participants who fail to submit the correct payment with their
prescription.
Caremark SpecialtyRx pharmaceutical care management services include but may not be limited to; (1) patient profiling
focusing on the appropriateness of Specialty Medication therapy and care and the prevention of drug-drug interactions;
(2) patient education materials; and (3) disease management and compliance programs with respect to Specialty
Medications. As part of these services, Participants will be asked to participate in various surveys.
Caremark will provide Member County and Customer with a list of the Specialty Medications and their corresponding
rates (which may vazy from Network Rates) upon request. Routine supplies (needles, syringes, alcohol swabs) in a
sufficient quantity will be included at no additional expense.
2. FEES AND PAYMENT.
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This document contains proprietary information of Caremark, and may not be used far any purpose other than to evaluate entering into a relationship
with Caremazk, nor may it be duplicated or disclosed to others for any purpose.
2.1 Fees. The parties agree that, in lieu of billing Member County a "per Claim" fee for Services,
Caremazk shall retain 100% of the Rebates as reasonable compensation for the Services. Customer and Member
County understand and agree that neither they nor any Participant will share in the Rebate monies collected from
Manufacturers by Caremark.
2.2 Remedies. In the event Member County or Customer incurs any fee, as identified in Exhibit B, it will
pay Caremazk such fees as reasonable compensation. In the event any such fees apply and Member County or
Customer fails to pay Cazemazk by the due date any amount owing, Cazemazk, after making a reasonable effort to
collect and upon notice to such Member County or Customer may, in addition to its remedies under this Agreement, at
Law or in equity, do any or all of the following: (i) suspend performance of any or all of Cazemazk's obligations under
or in connection with this Agreement with respect to such Member County or Customer, including Cazemark's
obligation to process Claims or (ii) set off against any amounts payable to such Member County or Customer by any
amounts due Cazemazk from such Member County or Customer.
2.3 Pricing Changes. After the Initial Term of this Agreement, as set forth in Section 7.1, Caremazk may
change the fees applicable to the Consumer Card Program. Caremazk will give Customer sixty days' written notice of
any change, and such change will take effect on the first day of the month following the sixty-day notice period.
Customer may object to an increase in fees by providing written notice to Caremark at least thirty days before the
expiration of the sixty-day notice period. If the parties cannot agree on an appropriate fee, this Agreement will
terminate at the end of the sixty-day notice period. If Customer does not timely object, Customer will have no right to
terminate this Agreement based on the pricing change.
3. CUSTOMER AND MEMBER COUNTY OBLIGATIONS.
3.1 Marketing Materials. The parties agree to use only those marketing brochures and other advertising
materials pertaining to Customer's Consumer Card Program (in any medium, including, but not limited to, written
communications, verbal communications and web based mazketing) that have been approved by the other. Member
County and Customer further agree that they will communicate such requirements to its clients or groups and will
ensure that such clients or groups comply with the requirements of this Section 3.1. Caremark may terminate this
Agreement immediately in the event Member County or Customer fails to comply with the provisions of this Section
3.1.
Caremazk will provide its standazd mazketing brochures, advertising materials and mail order forms, as applicable, to
Member County at no cost. Caremazk will work with and support each Member County in marketing the Consumer
Card Program at no cost. If the cost associated with providing such materials is determined by Caremark to be
unreasonable or excessive, Customer or Member County shall pay for the costs of the materials at a rate to be mutually
agreed to by the parties in writing. If Member County or Customer elects to use customized brochures or advertising
materials (in any medium, including but not limited to written communications, verbal communications and web based
marketing), Member County and Customer will (i) obtain Cazemark's approval on such forms, and (ii) pay a reasonable
charge, as established by Caremazk, for such materials if created or provided by Caremazk.
3.2 Support of Consumer Card Program. Customer will recommend and support the Consumer Card
Program in accordance with the terms of this Agreement.
4. USE OF AND ACCESS TO INFORMATION.
4,1 Use of Participant Information. Caremark, Customer and Member County may use, disclose,
reproduce or adapt information obtained in connection with this Agreement, including Claims ("Claims Information")
as well as Eligibility Information, in any manner they deem appropriate, except that each parry and its agents,
employees and contractors shall maintain the confidentiality of this information to the extent required by applicable
Law, and may not use the information in any way prohibited by Law. Any work, compilation, processes or inventions
developed by Caremark, Customer, Member County or their respective agents, employees or contractors, is deemed
Confidential Information of such party under this Agreement.
4.2 Right to Audit Rebates. Customer, at its sole expense, may audit a reasonable sample of records
directly related to Customer's Rebates once in each twelve-month period (following sixty (60) days written notice to
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This document contains proprietary infoanation of Caremark, and may not be used for any purpose other than to evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed to others for any purpose.
Cazemazk). Such records shall be limited to information necessary for validating the accuracy of the Rebate amounts
disvibuted to Member County by Cazemazk. The parties agree that an independent third-party auditor agreeable to
Customer and Caremark shall conduct such audit, and that such fine will sign a Caremark confidentiality agreement
ensuring that all details and terms of all Manufacturer Rebate contracts with Caremark (except the total aggregate
amount due to Customer) will be treated as confidential to Cazemazk and will not be revealed in any manner or form by
or to any person or entity. Furthermore, such audit shall be conducted at Cazemark's office where such records are
located, during normal business hours, without undue interference with business activities, and in accordance with
reasonable audit procedures.
5. CONFIDENTIALITY AND INTELLECTUAL PROPERTY.
5.1 Confidential and Proprietary Information. In connection with this Agreement, each party may
disclose to the other party certain proprietary or confidential technical and business information, databases, trade
secrets, and innovations belonging to the disclosing party ("Confdential Information"), the value of which might be
lost if the proprietary nature or wnfidentiality of such Confidential Information is not maintained. For the purposes of
this Section, the contents of this Agreement and of any exhibits, amendments, or addenda attached hereto are deemed
Confidential Information. Furthermore, any work, compilation, processes or inventions developed by Cazemazk,
Member County or Customer, or their respective agents, employees or contractors, is deemed Confidential Information
of such party under this Agreement. Notwithstanding the foregoing, Confidential Information may be disclosed by
Member County in response to a request made pursuant to the Member County's applicable state Public Records Law,
insofar as disclosure is required by that Law. Member County shall provide Caremark with (i) notice of its intent to
disclose Confidential Information and (ii) an opportunity for Caremark to object to such disclosure in accordance with
Law. Attached hereto as Exhibit D is a copy of this Agreement which redacts certain pricing information.
Notwithstanding the foregoing, the parties agree that as a matter of convenience, Exhibit D may be disclosed by
Member County as required by Member County's applicable Public Records Law without providing Caremark an
opportunity to object. Member County agrees to provide Cazemazk with reasonable notice of its disclosure of Exhibit
D.
5.2 Non-Disclosure of Confidential Information. The parties will not (except to the extent expressly
authorized by this Agreement) disclose Confidental Information of any other to anyone outside of Cazemazk, Member
County or Customer, nor will they copy or reproduce any Confidential brfotmation of another unless expressly
authorized to do so by such party in writing. Each party will disclose Confidential Information of another only to its
employees who have a need to know the Confidential Information in order to accomplish the purpose of this Agreement
and who (i) have been informed of the confidential and proprietary nature of the Confidential Information, and (ii) have
agreed not to disclose it to others. In order to preserve and protect the confidential or proprietary nature of any
Confidential Information and to prevent it from falling into the public domain or into the possession of persons not
bound to maintain its confidentiality, each party will handle the Confidential Information of any other party with the
same degree of care that it applies with respect to its own information that it considers as confidential and proprietary,
but in no event with less than reasonable care.
5.3 Exceptions and Petvrritted Disclosures. The receiving party of Confidential Infornation will not be
liable for any disclosure or use of Confidential Information which is publicly available or later becomes publicly
available other than through a breach of this Agreement, or if the Confidential Information is shown by written
documentation to be known to the receiving party on the date of execution of this Agreement, having been received
from a source (other than a party to this Agreement) that had the right to disclose the Confidential Information.
5.4 Subpoena. Confidential Information may be disclosed pursuant to a bona fide subpoena if the party
receiving [he bona fide subpoena has given the other party prompt written notice of receipt of the subpoena so [hat the
other party can object or otherwise intervene as it deems proper.
5.5 Return or Destruction of Information. All Confidential Information will remain the property of the
disclosing party, and the receiving patty will return all written or tangible materials, and all copies thereof, upon request
of the disclosing party. If and to the extent feasible, upon termination of this Agreement, Caremark will destroy or will
retum to Member County or Customer all PHI obtained pursuant to this Agreement and shall retain no copies thereof;
provided however, that if such return or destruction is not reasonably feasible, the provisions of Section 4 of this
Agreement shall continue to apply to such information after the termination hereof.
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This document contains proprietary information of Caremark, and may not be used for any purpose other than [o evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed to others for any purpose.
5.6 Proprietary to Caremark Member County and Customer acknowledge that the Formulary is
proprietary to Cazemark. Further, all Caremark databases, as well as the soRware, hard coding, and logic used to
generate the compilations of information contained in Caremark's Claims adjudication system and in all other databases
developed by Caremark or its designees in connection with performing Services including identifiers assigned by
Cazemark, and the format of all reports, printouts, and copies there from, and any prior and future versions thereof by
any name, are the property of Caremark and are protected by copyright which shall be owned by Cazemazk.
5.? Tradenames; Trademarks; and Service Marks. None of the parties hereto may use any
tradenames, trademarks or service marks of another, or any word or symbol likely to be confused with such tradenames,
trademarks or service marks, unless authorized in writing or as expressly permitted by this Agreement.
5.8 Remedies. Any unauthorized disclosure or use of Confidential Information would cause Caremark,
Member County or Customer immediate and irreparable injury or loss that cannot be adequately compensated with
money damages. Accordingly, if any party hereto fails to comply with this Section 5, the other(s) will be entitled to
specific performance including immediate issuance of a temporary restraining order or preliminary injunction enforcing
this Agreement, and to judgment for damages (including reasonable attorneys' fees) caused by the breach, and to any
other remedies provided by Law.
6. LIMITATION OF LIABILITY; COMPLIANCE !'VITH LAW.
6.1 Warranty. This Agreement is not a contract for the sale of goods. Cazemark will perform the
Services in a good and workmanlike manner in accordance with the customs, practices, and standards of providers
skilled in the industry. EXCEPT AS WARRANTED IN THIS SECTION 6.1, CAREMARK DISCLAIMS ALL
EXPRESS AND ALL IMPLIED WARRANTIES OF ANY KIND, INCLUDING THE SUITABILITY FOR ANY
PARTICULAR PURPOSE OF THE DATA GENERATED THROUGH THE CAREMARK SYSTEM. CAREMARK
RELIES ON FIRST DATABANK, MEDI-SPAN, OR INDUSTRY COMPARABLE DATABASES IN PROVIDING
CUSTOMER, MEMBER COUNTY AND PARTICIPANTS WITH DRUG UTILIZATION REVIEW SERVICES.
CAREMARK HAS UTILIZED DUE DII,IGENCE IN COLLECTING AND REPORTING THE INFORMATION
CONTAINED IN THE DATABASES AND HAS OBTAINED SUCH RVFORMATION FROM SOURCES
BELIEVED TO BE RELIABLE. CAREMARK, 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 FORMULARY IS INTENDED AS A
SUPPLEMENT TO, AND NOT A SUBSTITUTE FOR, THE KNOWLEDGE, EXPERTISE, SKILL, AND
NDGMENT OF PHYSICIANS, PHARMACISTS, OR OTHER HEALTH-CARE PROFESSIONALS INVOLVED W
PARTICIPANT'S 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 FOR ANY PARTICIPANT. CAREMARK DOES NOT WARRANT THAT ITS
SERVICES WILL BE UNINTERRUPTED OR ERROR FREE.
6.2 Force Majeure. Except for the payment obligations set forth in Section 2 of this Agreement, the
parties are excused from performance under this Agreement to the extent that a party is prevented from performing any
obligation, m whole or in part, as a result of causes beyond its reasonable control, including, acts of God, was, civil
disturbance, court order, governmental intervention, Change in Law, nonperformance by the other party or any third
parry, failures or fluctuations in electrical power, heat, light, air conditioning, or telecommunications equipment. Any
nonperformance under this Section 62 will not constitute a default or a ground for termination of this Agreement.
6.3 Indemnity. To the extent permitted by applicable Law applicable to Customer and each Member
County, Customer and Member County shall indemnify and hold harmless Caremark and its officers, directors,
employees, agents, successors, and assigns ("Caremark Indemnitees") for, from and against any damages, costs, or
attorney's fees, actually incurred by Caremark a Caremark Indemnitee, as the result of a claim brought by any third
party or a participant or beneficiary relating to the Services, provided that the Caremark lndemnitee has acted in a
manner that is consistent with this Agreement and applicable standards of care. The foregoing indemnification shall not
apply and shall not be enforceable to the extent any applicable Law prohibits a Member County from providing such
indemnification. Caremark shall indemnify and hold harmless Member County, Customer and their officers, directors,
employees, agents, successors, and assigns (collectively "Customer Indemnitees") for, from and against any damages,
costs, or attorney's fees, actually incurred by any Customer Indemnitee, as the result of a third parry claim that
NACo_ k3-v2.doc (02124/2006) IRxClaiml Page 6 of29
This document contains proprietary information of Caremark, end may no[ he used for any purpose other than to evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed to others for any purpose.
Caremazk, its officers, directors, employees, agents, successors, or assigns acted with negligence, willfully, and/or in
violation of applicable standazds of care, provided that the Customer Indemnitee has acted in a manner that is consistent
with this Agreement, the Consumer Cazd Program and applicable standards of care. However, nothing in this
Agreement is to be construed as a waiver of governmental immunity as offered by the court or state law.
6.A Compliance with Law. Customer and Member County will comply with all Laws applicable to its
prescription drug benefit plan, including without limitation insurance licensing, antitrust, consumer protection, and any
other Laws that may apply. Cazemazk has no responsibility to advise Member County or Customer about the
applicability of or compliance with any applicable Law including, without limitation, HIPAA, the Employee Retirement
Income Security Act, or the Americans with Disabilities Act.
Caremark will comply with all Laws applicable to it and to the Services it provides under this Agreement. Member
County and Customer have no responsibility to advise Caremazk regarding its wmpliance with any applicable Law.
Effective as of September 8, 2001, each party certifies that it shall not violate the federal anti-kickback statute, set forth
at 42 U.S.C. § 1320a-76(b) ("Anti-Kickback Statute"), or the federal "Stazk Law," set forth at 42 U.S.C. § 1395nn
("Stark Law"), with respect to the performance of its obligations under this Agreement. Further, Caremark shall ensure
that individuals meeting the definition of "Covered Persons" (as such term is defined in the Corporate Integrity
Agreement between the Office of Inspector General of the Department of Health and Human Services and
AdvancePCS) shall comply with Cazemazk's Compliance Program, including training related to the Anti-Kickback
Statute and the Stark Law. In addition, Caremark's Code of Conduct and policies and procedures on the Anti-Kickback
Statute and Stark Law may be accessed at http !(www.caremark.com/wpsportalf s.155/3370?cros=CMS-2-007764.
6.5 Change in Law. The parties will attempt to equitably adjust the terms of this Agreement to take into
account any Change in Law or any material change in drug industry practice that materially alters the rights or
obligations of either party under this Agreement. if the parties are unable to agree upon an equitable adjustment within
sixty days after either party notifies the other of such a Change in Law or material change in drug industry practice, this
Agreement will automatically terminate.
6.6 Limitations. In no event shall either party be liable to the other party, nor shall Caremazk be liable to
any Participant for any indirect, special, or consequential damages or lost profits, azising out of or related to
performance of this Agreement or a breach of this Agreement, even if advised of the possibility of such damages or lost
profits.
Caremazk (and its affiliates, directors, employees, agents, successors or assigns) will not be liable for any claim which is
asserted by Member County or Customer more than ninety days after Member County or Customer is or reasonably
should have been aware of such claim, and will in no event be liable for any claim which is asserted more than twelve
months after the event resulting in damages or loss.
Caremark does not direct or exercise any control over the professional judgment exercised by any pharmacist in
dispensing prescriptions or otherwise providing pharmaceutical related services at a Participating Pharmacy.
Participating Pharmacies are independent contractors, not subcontractors or agents of Caremark, and Caremazk shall
have no liability to Member County of Customer for a claim azising out of any act or omission of any Participating
Pharmacy or its agents or employees,
7. TERM AND TERMINATION OF AGREEMENT.
7.1 Term. This Agreement is for an initial term of two years and four months from the Effective Dale,
through July 31, 2008 (the "Initial Term"), and will automatically continue in effect for successive one year terms
thereafter, subject to the remaining provisions of this Section.
7.2 Termination. This Agreement may be terminated as follows:
a. By any party, with or without cause, at the end of the Initial Tetm or any renewal term, by
giving written notice to the others at least 60 days prior to the end of such Initial Term or renewal term;
NACo k3-v2.dac (02/2412006) IltxClaiml Page 7 of 29
This document contains proprietary information of Caremark, and may not be used for any purpose other than to evaluate entering into a relationship
with Caremark, nOr may it be duplicated or disclosed to others for any purpose.
b. Automatically, if the parties aze unable to agree on an equitable adjustment under Section 6.5
of this Agreement;
c. By any party if another materially defaults in its performance of this Agreement and such
default continues without cure for a period of sixty days after the terminating party provides written notice to
the defaulting party specifying the nature of the default;
d. By any party, at its option, if any court, or governmental or regulatory agency issues to
another party an order or finding of impairment or insolvency, or an order to cease and desist from writing
business. The party receiving notice of an order or finding must provide the others written notice within two
business days of receipt;
e. By any party if another party: (i) makes an assignment for the benefit of creditors; (ii) has a
petition filed (whether voluntary or involuntary) under Title 11 of the United States Code, or any other similar
statute now or hereafter in effect; (iii) has a receiver, custodian, conservator, or trustee appointed with respect
to all or a substantial part of its property; or (iv) has a proceeding commenced against it which substantially
impairs performance hereunder; or
f. By Caremazk, immediately on written notice to Member County or Customer, if (i) either
fails to comply with the provisions of Section 3.1 of this Agreement, or (ii) Caremark determines, in its sole
discretion that Member County or Customer's program may not fully comply with all applicable Laws.
7.3 Effect of Termination and Survival.
Sections 4, 5 and 6 of this Agreement, and obligations arising under this Agreement prior to the
effective date of any termination, will survive termination.
8. NOTICES.
All notices under this Agreement must be in writing, delivered in person, sent by certified mail, delivered by air courier,
or transmitted by facsimile and confirmed in wilting (by air courier or certified mail) to a party at the facsimile number
and address shown in this Agreement. A party may notify the other party of any changes in the listed address or
facsimile number in accordance with the provisions of this Section. All notices are effective upon receipt.
Notices to Caremazk must be addressed as follows:
Vice President, Client Contract Services
Caremark Inc.
2211 Sanders Road, NBT9
Northbrook,lL 60062
Fax No.: 847-559-4302
W ith a copy to:
Managing Counsel, Client and Account Services
Caremark Inc.
2211 Sanders Road, NBT9
Northbrook, IL 60062
Fax No.: 847-559-4879
Notices to Customer must be addressed as follows:
National Association of Counties
440 First Street, NW
Washington, DC 20001
Atm; Mr. Andrew Goldschmidt, Director, Membership Marketing
NACo k3-v2.doc (02R4f2006) II>SClaiml Page 8 of 29
'Ibis document contains proprietary information of Caremark, and may not be used for any purpose other than to evaluate entering into a relationship
with Cazemark, nor may it he duplicated or disclosed W others for any purpose.
Fax No.:(202)393-2630
9. MISCELLANEOUS.
9.1 Entire Agreement; Interpretation; Amendment; Counterparts. This Agreement {including
exhibits, schedules, attachments, or any addendum to this Agreement) constitutes the enfire understanding and
obligation of the parties with respect to the Services and supersedes any prior agreements, writings, or understandings,
whether oral or written. The headings in this Agreement aze used only for convenience of reference and do not affect
the meaning or interpretation of any provision. The parties may amend this Agreement only through a properly
executed writing authorized by both parties. This Ageement may be executed in several counterparts, all of which
taken together constitute a single agreement between the parties.
9.2 Binding Effect; Assignment. This Agreement is binding on the parties and their respective
successors and permitted assigns. None of the parties may assign this Ageement, in whole or in part, without the prior
written consent of the others (which consent wiil not be unreasonably withheld); except that Caremark may assign this
Agreement, in whole or in part, to any entity that controls, is controlled by, or is under common control with Caremazk.
9.3 Independent Contractor; Third Parties. The parties to this Agreement are independent contractors,
and have no other legal relationship under or in connection with this Agreement. No term or provision of this
Agreement is for the benefit of any person who is not a party hereto (including, without limitation, any Participant or
broker), and no such party will have any right or cause of action hereunder.
9.4 Waivers. Any failure by a party to comply with any covenant, agreemenk or condition herein or in
any other agreements or instrtunents executed and delivered hereunder may be waived in writing by the party in whose
favor such obligation or condition runs; except that failure to insist upon strict compliance with any such covenant,
agreement, or condition will not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
9.5 Severability. In the event any term or provision of this Agreement is declared to be invalid or illegal
for any reason, this Agreement wilt remain in full force and effect and will be interpreted as though such invalid or
illegal provision were not a part of this Agreement. The remaining provisions will be construed to preserve the intent
and purpose of this Agreement and the parties will negotiate in good faith to modify any invalidated provisions to
preserve each party's anticipated benefits.
9.6 Enforcement Costs. If any party hereto institutes an action or proceeding to enforce any rights
arising under this Agreement, the party prevailing in such action or proceeding will be paid all reasonable attorneys'
fees and costs to enforce such rights by the other party, such fees and costs to be set by the court, not by a jury, and to
be included in the judgment entered in such proceeding.
9.7 Authority. Each party represents and warrants that it has the necessary power and authority to enter
into this Agreement and to consummate the transactions contemplated by this Agreement,
9.8 Exclusivity. Member County and Customer hereby grant Caremark during the term of this
Agreement, and any renewals hereof, the exclusive right to provide a Consumer Card Program to Member County and
Customer. This exclusive right is solely applicable to Participants designated by Member County as eligible for the
Member County's discount consumer card program and shall not affect any other benefits or programs provided to
Participants by Member County. Member County and Customer further agree that, during the teen of this Agreement
and any renewals hereof, it will not negotiate, contract, or agree with any drug manufacturer for the purpose of
obtaining Rebates or other discounts related to Participants under this Agreement. Member County and Customer also
agree to cancel any existing agreements or contracts with any drug manufacturers related to such drug Rebates or
discounts as of the Effective Date of this Agreement. In the event of a breach of this Section by Member County or
Customer, Caremark may terminate this Agreement. By entering into this Agreement, Customer does not endorse, and
Cazemark will not represent Customer's endorsement of any other programs of services which Cazemark may offer to a
Member County or Participant.
9.9 Drug Classification and Pricing. Caremark shall use the latest edition of the First DataBank Blue
Book (with supplements), the Medi-Span Master Dmg Pricing Souroe (with supplements), or any ether nationally
NACo k3•v2.doc i02Y14/2006) (1txClaimi Page 9 of29
This document contains proprietary information of Cazemark, and may not be used for any purpose other than to evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed to others for arty purpose.
recognized pricing source as the source for purposes of pricing and classifying drugs (e.g., legend vs. over the counter,
brand vs. generic) in connection with this Agreement.
10. DEFINITIONS. The following terms and phrases, when capitalized, have the meanings set forth below.
a. "AWP" means the average wholesale price of the drug dispensed as set forth in the latest edition of
the First DataBank Blue Book (with supplements), the Medi-Span Prescription Pricing Guide (with supplements) or any
other similar nationally recognized reference selected by Cazemazk.
b. "Change in Law" means any (i) change in or adoption of any Law, (ii) change in the judicial or
administrative interpretation of any Law, or (iii) change in the enforcement of any Law, occurring after the date
Customer is implemented or the Effective Date, whichever is earlier.
c. "Claim(s)" mean those claims processed through the Caremark on-line claims adjudication system or
otherwise transmitted or processed in accordance with the terms of this Agreement in connection with the Consumer
Card Program.
d. "Covered Items" mean the prescription drug benefits for which Participants are eligible pursuant to
Member County's drug benefit plan.
e. "Law" means any federal, state, local or other constitution, charter, act, statute, law, ordinance, code,
rule, regulation, order, specified standards or objective criteria contained in any applicable permit or approval, or other
legislative or administrative action of the United States of America, or any state or any agency, departrnent, authority,
political subdivision or other instrumentality thereof or a decree or judgment or order of a court.
f. "Manufacturer" means a pharmaceutical company that has contracted with Caremark (or its affiliate
or agent) to offer discounts for pharmaceutical products in connection with Caremazk's Formulary Services.
g. "Maximum Allowable Cost (MAC)" means the then current maximum allowable cast for a
prescription drug listed as a drug available from more than one Manufacturer in Caremark's pharmaceutical MAC
pricing forntula, including but not limited to formulas utilizing the Medi-Span Master Drug Pricing Source or First Data
Bank.
h. "Participant" means an individual designated by Member County as eligible for Covered Items
under the terms of the Consumer Card Program.
i. "Participating Pharmacy" means a pharmacy that has agreed to provide certain pharmacy services
to Participants in accordance with the terms of its agreement with Cazemark. A list of Participating Pharmacies can be
accessed via Caremark's Internet website, which is subject to change from time to time.
j. "Rebate(s)" means, for any period, all rebates, reimbursements, or other discounts received under a
pharmaceutical manufacturer's discount program with respect to pharmaceutical products dispensed to a Participant
under the Consumer Card Program for such period.
NACa k3-v2.dac (02724/2006)fRxClaiml Page ]0of29
This document con[ains proprietary information of Caremark, and may not be used for any pupose other than to evaluate entering into a rela[ionship
with Caremark, nor may it be duplicated or disclosed [o others for any purpose.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized
officers or agents as of the date first above written.
CAREMARKPCS HEALTH, L.P.
NATIONAL ASSOCIATION OF COUNTIES By: CaremarkPCS Health Systems, LLC,
its General Partner
By:
Lam E. Naake
Title: Executive Director Title:
Date: Date:
NACo k3-v2,doc (02/2-0R006) lR><Claiml Page I1 of 29
This document contains proprietary information of Caremark, and may not be used for any purpose other than [o evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed to others for any purpose.
EXHIBIT A
ADDITIONAL SERVICES
Caremark will provide the following services if selected by Customer or Member County for an additional fee as set forth
in Erhibit B. The Services aze subject to change as provided for in the Agreement. Capitalized terms not defined herein
will have the meanings used in the Agreement.
1. Customer-Specific Programming. If Customer or Member County requests services or changes to
Services that require customized programming or systems work, Caremark will attempt to estimate the time and cost for
completion of such work. If Customer or Member County authorizes Caremark to perform such work, it will pay
Caremark the cost of performing such work at the programming rate set forth in Exhibik B.
NACo k3v2.doc {02!2412006) (RxClaiml Page l2 of 29
This document contains proprietary information of Caremark and may not be used for any purpose other than to evaluate enuring into a relationship
with Caremazk, nor may it be duplicated or disclosed m others for any purpose.
EXHIBIT B
ADMINISTRATIVE FEES
National Association of Counties
Effective March 1, 2006
As consideration for the Services selected by Member County in accordance with the Agreement, Member County will pay
to Cazemazk the fees set forth below:
Administrative Fees
Per Processed Retail Claim $0.00
Per Processed Mail Claim $0AO
As consideration for the Consumer Cazd Program se]ected by Member County in accordance with this
Agreement, Member County will pay to Caremark 100% of the Rebates collected from Manufacturers pursuant
to this Agreement.
k****kk****k*kk*kk*k*****kkk***k***kk*k*k*k*kkkk*******kk**kkkk*kk*k***k*kk**kkkkk****kk
Consumer Card Program Retail Network Rates'
Brand: AWP-13%+ $3.50 transaction fee or Usual & Customary
Generic: AWP-13%+ $3.50 transaction fee, MAG + $3.50 transaction fee or Usual & Customary
Mail Service Rates'
Brand: AWP-19%+$1.00 dispensing fee
Generic: AWP-50%+$I.OOdispensingfee
Specialty Pharmacy Rates=
AWP-13% + $3.50 dispensing fce
Other Fees
Section 1.6 -Card Issuance No charge
Exhibit A(1) - Customer Specific Programming $150.00lHour
Note: Charges or Services not identified above will be quoted upon request
I. All claims may be aggregated for purposes of this rate. Actual rates may vary by Participating Pharmacy.
Certain retail and mail Claims may be excluded from these rates, including but not limited to (i) Select Generics, which
are generic drugs that enter the market with supply limitations or competitive restrictions that limit marketplace
competition and (ii) Claims for select injectable drugs and select oral drugs that aze bio-technological in nature,
compound drugs and those requiring special handling.
2. This rate will apply m Claims far certain drugs filled by Cazemazk SpecialtyRx, including but not limited to
Claims for select injectable drugs and select oral drugs that are bio-technological in nature, wmpound drugs and those
requiring special handling. All Claims may be aggregated for purposes of this rate. Rates for such drugs may vary if
filled by a pharmacy other than Caremark SpecialtyRx. Certain drugs will be priced separately from, and not be subject
to the contracted rate for prescription Claims due to, among other things, specialized manufacturer processes, limited
availability or extraordinary shipping requirements.
Finance Charges. Invoices are assessed finance charges on the amounts not paid within the terms set forth on the invoice.
The finance charge shall be in an amount equal to one and one-half percerd per month, unless such rate exceeds the
maximum me allowable by applicable Law, in which case such amounts shall bear interest at the maximum legally
allowable rate.
Contingency. All prices are contingent upon Member County's full adoption of Cazemark's Performance Drug List and
formulary management and intervention programs.
NACo k3-v2.doc (021242006) llixClaiml Page 13 of 29
This document contains proprietary information of Caremark, and may not be used for any purpose other than to evaluate entering into a relationship
with Caremark, nor may it be duplicated or disclosed W others for any purpose.
EXHIBIf B
ADMINISTRATIVE FEES
Handling Costs. Customer or Member County is in a!1 events responsible for any postage costs or other mailing and
handling-related costs inctured by Caremazk in correction with the provision of Services or additional services, except as
to costs associated with standazd Consumer Card Progam materials that are shipped by bulk mail to Customer or Member
Coumy.
Taxes. It is the understanding of the parties that Participating Pharmacies shall collect from Participants all applicable
takes for Covered Items, and that Caremark is not liable for the payment of applicable taxes. Any other taxes associated
with the operation of Member County's Consumer Cazd Program are the responsibility of Member County.
NACo k3-v2.doc (02Y2412006)IRxClaiml Page lA Of 29
This document contains proprietary information of Caremark, and may not be used for any purpose other than to evaluate entering into a relationship
with Caremark, mr may it be duplicated or disclosed w others for any purpose.
F•XIIIBIT C
CAREMARKPCS HEALTH, L.P.
NATIONAL ASSOCIATION OF COUNTIES
MANAGED PHARMACY BENEFIT SERVICES AGREEMENT
FOR MEMBER COUNTY
This Managed Pharmacy Benefit Services Agreement for Member County effective
is entered into by and between CazemazkPCS Health, L.P. ("Caremark") and
("Member County"). Reference is hereby made to the Managed Pharmacy Benefit Services Agreement Consumer
Cazd Program dated as of March 1, 2006 (the "Agreement") among National Association of Counties ("Customer"),
Member County, and Cazemark under which Customer has engaged Caremark to provide services to prescription drug
plans for Customer and its Member Counties.
MEMBER COUNTY does hereby agree to be bound by, and to assume and perform, each and ail of the terms,
covenants and conditions of the Agreement as Member County (as defined in the Agreement) in the same manner and to
the same extent as if it were a patty thereto, Member County acknowledges and agrees that Customer and Caremark
may amend all or any portion of the Agreement, except with respect to the Initial Term, and Member County hereby
agrees to be bound by any such amendment. Customer shall give Member County reasonable notice prior to the
effective date of any such amendment. If such amendment is adverse to Member County or its Participants, Member
County may, within ninety (90) days of receiving such notice from Customer, terminate its participation in the
Agreement by giving prior written notice to Customer and Caremark.
Each party certifies that it shall not violate the federal anti-kickback statute, set forth at 42 U.S.C. § 1320a-7b(b) ("Anti-
Kickback Statute"), or the federal "Stark Law," set forth at 42 U,S.C. § 1395nn ("Stark Law"), with respect to the
performance of its obligations under this Agreement. Further, Cazemazk shall ensure that individuals meeting the
definition of "Covered Persons" (as such term is defined in the Corporate Integrity Agreement between the Office of
Inspector General of the Department of Health and Human Services and AdvancePCS) shall comply with Caremark's
Compliance Program, including training related to the Anti-Kickback Statute and the Stazk Law. In addition,
Caremazk's Code of Conduct and policies and procedures on the Anti-Kickback Statute and Stazk Law may be accessed
at h~s7www.caremazk.comlwpslportall s.155/3370?cros=CMS-2-007764.
Customer and Caremark, by their signatures hereto, accept and agree to Member County's participation with the
Agreement under the terms and conditions of the Agreement. By signing this Managed Pharmacy Benefit Services
Agreement for Member County, Member County acknowledges and agrees that the terms of the Agreement have been
completely read, fully understood and voluntarily accepted and further agrees to be bound thereby.
NATIONAL ASSOCIATION OF COUNTIES
By:
Title: CAREMARKPCS HEALTH, L.P.
By: CaremarkPCS Health Systems, LLC, its
Date: General Partner
MEMBER COUNTY: By:
Title:
[County Name]
Dale:
ay:
Title:
Date:
NACo k3-v2.doc (02Y2A12006)IRxClaiml Page lS of 29
This document contains proprietary information of Caremark, and may not be used for any purpose other than to evaluate entering into a relationship
with Caremark, nor may i[ be duplicated or disclosed to others for any purpose.
EXHIBIT' D
REDACTED CONTRACT
CAREMARKPCS HEALTH, L.P.
MANAGED PHARMACY BENEFIT SERVICES AGREEMENT
CONSUMER CARD PROGRAM
THIS RESTATED AGREEMENT (the "Agreement") is effective beginning Mazch 1, 2006 (the "Effective
Date") among National Association of Counties ("Customer"), counties that aze members of the National Association of
Counties ("Member County") and CazemarkPCS Health, L.P, formerly known as AdvancePCS Health, L.P.
("Caremark"), for the purpose of delineating the terms and conditions under which Cazemazk will provide certain
managed pharmacy benefit services to Member County and Customer. This restated agreement will amend and replace all
existing Member County Agreements.
Customer agrees that it will require each Member County to execute an individual agreement with Caremark in the form
attached hereto as Exhibit C (the "Member County Agreement") prior to Caremazk's providing Services to sueh
Member County. Caremazk will not provide Services to Member County prior to the receipt of the Member County's
execution of the Member County Agreement.
1. STATEMENT OF SERVICES /OBLIGATIONS.
Ll Services. Caremark will provide Member County the services as set forth in this Section 1, and the
services described in any attachment, addendum or amendment hereto {collectively the "Services"). Cazemazk may
make changes to the Services from time to time so long as such changes do not materially alter any of the provisions of
this Agreement.
1.2 Participating Pharmacies. Caremark has created a network of Participating Pharmacies, which will
perform pharmacy services for Participants.
1.3 Pharmacy Help Desk and Voice Response Unit. Caremark will provide Participating Pharmacies
with help desk assistance and access to Cazemark's voice response unit during Cazemazk's hours of operation.
1.4 Claims Processing.
a, Submission of Claims. Cazemazk will adjudicate Claims submitted by Participating
Pharmacies to Cazemazk in accordance with the Participating Pharmacy's agreement with Cazemazk and the
Consumer Card Program.
b. Collection at Point of Sale. Customer and Member County acknowledge that Participating
Pharmacies will collect from the Participant one hundred percent (100%) of the applicable prescription price,
discounted at the rates set forth on Exhibit B as applicable, plus a transaction fee from the Participant.
1.5 Customer Service. Cazemazk will make available to Customer, Member County and Participants a
toll free number during those hours of operaton maintained by Caremark. Staff will be available to answer questions
on the Consumer Card Program and Consumer Card Program guidelines.
1.6 Identification Cards. Caremark will, at its own cost, produce identification cards for Participants,
which contain Member County's and Customer's logo(s). Identification cazds will be available to any individual the
Member County or Customer deem appropriate. Cazemark will work with Member County on the distribution method
for identification cards; provided, however if Member County requests that Caremark mail the identification cards to
Members, postage and handling charges will apply. The Participant shall be responsible for paying for any
prescriptions obtained while using the identification card.
1.7 Clinical Services and Drug Utilization Review ("DUR").
a. Clinical Services. Caremark may provide to Member County its member compliance
programs and other programs designed to ensure proper drug utilization and encourage the use ofcost-effective
NACo k3-v2.doc (02!2412006) (RxClaiml Page 76 of 29
EXHIBIT D
REDACTED CONTRACT
medications. These programs may include mailings [o Participants with active prescriptions for tazgeted drug
products or drug classes or to let Participants know that they may qualify for participation in a clinical trial
program. Such mailings may include Participant and drug specific information and/or general educational
material Participanu, by notifying Cazemazk, may opt-out of such programs.
b. DUR Services. Caremark will provide its automated concurrent DUR Services for Claims.
The information generated in connection with DUR Services is intended as an ewnomical supplement to, and
not as a substitute for, the knowledge, expertise, skill, and judgment of physicians, pharmacists, or other health
caze providers in providing 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. Notwithstanding anything set forth in this Agreement,
Caremark will have no obligation to acquire information concerning any Participant beyond the information
that is included in Caremark's eligibility records or the Claims submitted by Participating Pharmacies in
connection with the Consumer Cazd Program.
1.8 Formulary Services. Cazemazk will administer an open formulary for the Member County and will
provide certain Services that are designed to provide useful clinical information to physicians (the "Formulary
Services"). Caremazk may make changes to the Formulary Services described in this Agreement from time to time, and
will notify Member County and Customer of any material changes to any formulary management programs. In all
cases, the prescribing physician shall have final authority over the drug that is prescribed to the Participant.
a. Rebate Contracts. Cazemark contracts with certain Manufacturers for Rebate programs.
b. [REDACTED DUE TO PROPRIETARY AND CONFIDENTIAL INFORMATION OF
CAREMARK.]
c. Participant Authorizations and Disclosures. Customer and Member County shall comply
with all Laws applicable to it as a sponsor of the Services or as otherwise consistent with its obligations under
this Agreement.
d. Additional Participant Discounts. Cazemark may provide a program that will provide
Participants with additional manufacturer discounts on certain drugs at the point of sale. From time to Hme,
Caremazk may revise the list of drugs that have additional participant discounts. The current list of drugs on
which Participants may receive additional discounts is available upon request. Caremark will timely notify
Member County and Customer of any revisions to this list of drugs.
1.9 Management Reports. Caremazk will provide Member County and Customer with Caremark's
standard management reports in connection with the Services, which reports may change from time to time at
Caremazk's discretion. Member County and Customer may elect to receive a reasonable number of the standard
management reports made available by Caremark.
1.10 Mail Service Frogram. Cazemark may provide to Member County mail order pharmacy services
through its mail order pharmacy facilities. For the duration of this Agreement, Member County agrees that it will offer
only Cazemark mail order pharmacy services for its Participants covered under this Agreement, as further described
below.
Caremark shall fill prescriptions for Participants and shall mail such drugs or medications to such Participants subject to
the following terms and conditions:
a. Distribution of Information. Cazemark shall provide Participants with its standard
informational material explaining the mail service and the forms necessary for Participants to utilize mail
service. Participants will have toll-free telephone access to a pharmacist and customer service representative.
Access to a pharmacist will be available 24 hours per day, seven days per week,
b. Delivery and Dispensing. Caremazk shall dispense through its mail service pharmacy new
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or refill prescription orders upon receipt from a Participant of (i) a valid prescription order or a completed refill
order form and (ii) the applicable payment, Caremark shall cause the filled prescriptions to be mailed to each
Participant via common carrier at the address appearing on the face of the prescription so long as such
addresses aze in the United States. Caremark shall not be Liable to Member County, Customer or Participant
for any delay in delivery resulting from circumstances beyond Cazemark's control as set forth in Section b.2.
Cazemark's mail order pharmacies may dispense drugs even if the prescription is not accompanied by the
correct amount however, Member County and Customer acknowledge and agree that Caremark may refuse to
fill any prescription that is either not accompanied by the correct amount and/or for any Participant who has an
unpaid balance with Caremark.
1.11 Preferred Drug Program. Caremark and the retail Participating Pharmacies will work together to
encourage the use of Prefered Drugs by (i) identifying appropriate opportunities for converting a prescription from a
non-Preferred Drug to a Preferred Drug, and (ii) contacting the Participant and the prescriber to request that the
prescription be changed to the Preferred Drug. A Preferred Drug is one on the Performance Drug List, which has been
developed by Caremark as a clinically appropriate and economically advantageous subset of the Caremark Formulary,
as revised by Caremark from time to time.
1.12 Specialty Pharmacy. Caremark's specialty pharmacy service will be provided by a Caremark
specialty pharmacy entity or its affiliate ("Caremark SpecialtyRx"), and offers a distribution channel for certain
pharmaceutical products that are generally biotechnological in nature, are given by injection, or otherwise require
special handling ("Specialty Medications").
Cazemazk SpecialtyRx shall provide prescription fulfillment and distribution of Specialty Medications and supplies,
pharmaceutical care management services, as well as the types of Service that Member County receives under this
Agreement, including but not limited to customer services, utilization and clinical management, integrated reporting and
Claims processing ("SpeciakyRx Services").
Caremark SpecialtyRx may receive prescriptions from Participants through an affiliated Caremark mail facility or
directly via the U.S. Mail or commercial carrier at the address specified by Caremark from time to time and may also
receive prescriptions from physicians by fax or by U.S. MaiUcommercial carrier. In accordance with the Consumer
Card Program, Caremark SpecialtyRx shall dispense Covered Items in accordance with those prescriptions and mail the
Covered Items to Participants at the designated address, so long as such address is located within the United States.
.Caremark SpecialtyRx may not dispense drugs to Participants who fail to submit the correct payment with their
prescription.
Cazemazk SpecialtyRx pharmaceutical caze management services include but may not be limited to: (1) patient profiling
focusing on the appropriateness of Specialty Medication therapy and care and the prevention of drug-drug interactions;
(2) patient education materials; and (3) disease management and compliance programs with respect to Specialty
Medications. As part of these services, Participants will be asked 20 participate in various surveys.
Caremark will provide Member County and Customer with a list of the Specialty Medications and their corresponding
rates (which may vary from Network Rates) upon request. Routine supplies (needles, syringes, alcohol swabs) in a
sufficient quantity will be included at no additional expense.
2. FEES AND PAYMENT.
2.1 (REDACTED DUE TO PROPRIETARY AND CONFIDENTIAL INFORMATION OF
CAREMARK.J
2.2 Remedies. In the event Member County or Customer incurs any fee, as identified in Exhibit B, it will
pay Caremark such fees as reasonable compensation. In the event any such fees apply and Member County or
Customer fails to pay Caremark by the due date any amount owing, Caremark, after making a reasonable effort to
collect and upon notice to such Member County or Customer may, in addition to its remedies under this Agreement, at
Law or in equity, do any or all of the following: (i) suspend performance of any or all of Caremazk's obligations under
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or in connection with this Agreement with respect to such Member County or Customer, including Cazemazk's
obligation to process Claims or (ii) set off against any amounts payable to such Member County or Customer by any
amounts due Caremark from such Member County or Customer.
2.3 Pricing Changes. After the Initial Term of this Agreement, as set forth in Section 7.1, Caremark may
change the fees applicable to the Consumer Card Program. Caremark will give Customer sixty days' written notice of
any change, and such change will take effect on the first day of the month following the sixty-day notice period.
Customer may object to an increase in fees by providing written notice to Caremark at least thirty days before the
expirafion of the sixty-day notice period. If the parties cannot agree on an appropriate fee, this Agreement will
terminate at the end of the sixty-day notice period. If Customer does not timely object, Customer will have no right to
terminate this Agreement based on the pricing change.
3. CUSTOMER AND MEMBER COUNTY OBLIGATIONS.
3.1 Marketing Materials. The parties agree to use only those marketing brochures and other advertising
materials pertaining to Customer's Consumer Card Program (in any medium, including, but not limited to, written
communications, verbal communications and web based marketing) that have been approved by the other. Member
County and Customer further agree that they will communicate such requrements to its clients or groups and will
ensure that such clients or groups comply with the requirements of this Section 3.1. Caremark may terminate this
Agreement immediately in the event Member County or Customer fails to comply with the provisions of this Section
3.1.
Caremark will provide its standazd mazketing brochures, advertising materials and mai{ order forms, as applicable, to
Member County at no wst. Caremark will work with and support each Member County in marketing the Consumer
Card Program at no cost. If the cost associated with providing such materials is determined by Caremark to be
unreasonable or excessive, Customer or Member County shall pay for the costs of the materials at a rate to be mutually
agreed to by the parties in writing. If Member County or Customer elects to use customized brochures or advertising
materials (in any medium, including but not limited to written communications, verbal communications and web based
marketing), Member County and Customer will (i) obtain Cazemark's approval on such forms, and (ii) pay a reasonable
charge, as established by Caremark, for such materials if created or provided by Caremazk.
3.2 Support of Consumer Card Program. Customer will recommend and support the Consumer Card
Program in accordance with the terns of this Agreement.
4. USE OF AND ACCESS TO INFORMATION.
4.1 Use of Participant Information Caremark, Customer and Member County may use, disclose,
reproduce or adapt information obtained in connection with this Agreement, including Claims ("Claims Information")
as well as Eligibility Information, in any manner they deem appropriate, except that each party and its agents,
employees and contractors shall maintain the confidentiality of this information to the extent required by applicable
Law, and may not use the information in any way prohibited by Law. Any work, compilation, processes or inventions
developed by Caremark, Customer, Member County or their respective agents, employees or contractors, is deemed
Confidential Information of such party under this Agreement.
4.2 Right to Audit Rebates. Customer, at its sole expense, may audit a reasonable sample of records
directly related to Customer's Rebates once in each twelve-month period (following sixty (60) days written notice [o
Caremark). Such records shall be limited to information necessary for validating the accuracy of the Rebate amounts
distributed to Member County by Caremazk. The parties agree that an independent third-party auditor agreeable to
Customer and Caremazk shall conduct such audit, and that such firm will sign a Caremark confidentiality agreement
ensuring that all details and terms of all Manufacturer Rebate contracts with Caremark (except the total aggregate
amount due to Customer) will be treated as confidential to Caremark and will not be revealed in any manner or form by
or to any person or entity. Furthermore, such audit shall be conducted at Caremark's office where such records are
located, during normal business hours, without undue interference with business activities, and in accordance with
reasonable audit procedures.
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5. CONFIDENTIALITY AND INTELLECTUAL PROPERTY.
5.1 Confidential and Proprietary Information. In connection with this Agreement, each party may
disclose to the other party certain proprietary or confidential technical and business information, databases, trade
secrets, and innovations belonging to the disclosing party ("Confidential Information"), the value of which might be
lost if the proprietary nature or confidentiality of such Confidential Information is no[ maintained, For the purposes of
this Section, the wntents of this Agreement and of any exhibits, amendments, or addenda attached hereto are deemed
Confidential Information. Furthermore, any work, compilation, processes or inventions developed by Caremark,
Member County or Customer, or their respective agents, employees or contractors, is deemed Confidential Information
of such party under this Agreement. Notwithstanding the foregoing, Confidential Information may be disclosed by
Member County in response to a request made pursuant to the Member County's applicable state Public Records Law,
insofar as disclosure is required by that Law. Member County shall provide Caremazk with (i) notice of its intent to
disclose Confidential Information and (ii) an opportunity for Caremark to object to such disclosure in accordance with
Law. Attached hereto as Exhibit D is a copy of this Agreement which redacts certain pricing information.
Notwithstanding the foregoing, the parties agree that as a matter of convenience, Exhibit D may be disclosed by
Member County as required by Member County's applicable Public Records Law without providing Caremazk an
opportunity to object. Member County agrees to provide Cazemark with notice of its disclosure of Exhibit D.
5.2 Non-Disclosure of Confidential Information. The parties will not (except to the extent expressly
authorized by this Agreement) disclose Confidential Information of any other to anyone outside of Cazemark, Member
County or Cusmmer, nor will they copy or reproduce any Confidential Information of another unless expressly
authorized to do so by such party in writing. Each party will disclose Confidential Information of another only to its
employees who have a need to know the Confidential Information in order to accomplish the purpose of this Agreement
and who (i) have been informed of the confidential and proprietary nature of the Confidential Information, and (ii) have
agreed not to disclose it to others. In order to preserve and protect the confidential or proprietary nature of any
Confidential Information and to prevent it from falling into the public domain or into the possession of persons not
bound to maintain its confidentiality, each party will handle the Confidential Information of any other party with the
same degree of care that it applies with respect to its own information that it considers as confidential and proprietary,
but in no event with less than reasonable care.
5.3 Exceptions and Permitted Disclosures. The receiving party of Confidential Information will not be
liab{e for any disclosure or use of Confidential Information which is publicly available or later becomes publicly
available other than through a breach of this Agreement, or if the Confidential Information is shown by written
documentation to be known to the receiving party on the date of execution of this Agreement, having been received
from a source (other than a party to this Agreement) that had the right to disclose the Confidential Information.
5.4 Subpoena. Confidential Information may be disclosed pursuant to a bona fide subpoena if the party
receiving the bona fide subpoena has given the other party prompt written notice of receipt of the subpoena so that the
other party can object or otherwise intervene as it deems proper,
5.5 Return or Destruction of Information. All Confidential Information will remain the property of the
disclosing party, and the receiving party will return all written or tangible materials, and all copies thereof, upon request
of the disclosing party. If and to the extent feasible, upon termination of this Agreement, Caremark will destroy or will
return to Member County of Customer all PHI obtained pursuant to this Agreement and shall retain no copies thereof;
provided however, that if such return or destruction is not reasonably feasible, the provisions of Section 4 of this
Agreement shall continue to apply to such information after the termination hereof.
5.6 Proprietary to Caremark. Member County and Customer acknowledge that the Formulary is
proprietary to Cazemark. Further, all Cazemazk databases, as welt as the software, hazd coding, and logic used to
generate the compilations of information contained in Cazemark's Claims adjudication system and in all other databases
developed by Caremazk or its designees in connection with performing Services including identifiers assigned by
Caremark, and the format of all reports, printouts, and espies there from, and any prior and future versions thereof by
any name, are the property of Caremazk and aze protected by copyright which shaft be owned by Caremark.
5,7 Tradenames; Trademarks; and Service Marks. None of the parties hereto may use any
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tradenames, trademarks or service marks of another, or any word or symbol likely to be confused with such tradenames,
trademarks or service marks, unless authorized in writing or as expressly permitted by this Agreement.
5.8 Remedies. Any unauthorized disclosure or use of Confidential Information would cause Cazemark,
Member County or Customer immediate and irreparable injury or loss that cannot be adequately compensated with
money damages. Accordingly, if any party hereto fails to comply with this Section 5, the other(s) will be entitled to
specific performance including immediate issuance of a temporary restraining order or preliminary injunction enforcing
this Agreement, and to judgment for damages (including reasonable attorneys' fees) caused by the breach, and to any
other remedies provided by Law.
6. LIMITATION OF LIABILITY; COMPLIANCE WITH LAW.
6.1 Warranty. This Agreement is not a contract for the sale of goods. Cazemark will perform the
Services in a good and workmanlike manner in accordance with the customs, practices, and standards of providers
skilled in the industry. EXCEPT AS WARRANTED IN THIS SECTION 6.1, CAREMARK DISCLAIMS ALL
EXPRESS AND ALL IIviPLIED WARRANTIES OF ANY KIND, INCLUDING THE SUITABU.ITY FOR ANY
PARTICULAR PURPOSE OF THE DATA GENERATED THROUGH THE CAREMARK SYSTEM. CAREMARK
RELIES ON FII2ST DATABANK, MEDI-SPAN, OR INDUSTRY COMPARABLE DATABASES IN PROVIDING
CUSTOMER, MEMBER COUNTY AND PARTICIPANTS WITH DRUG UTILIZATION REVIEW SERVICES.
CAREMARK 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. CAREMARK, 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 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 INVOLVED IN
PARTICIPANT'S 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 FOR ANY PARTICIPANT. CAREMARK DOES NOT WARRANT THAT ITS
SERVICES WIl,L BE UNINT'ERRUPT'ED OR ERROR FREE.
6.2 Force Majeure. Except for the payment obligations set forth in Section 2 of this Agreement, the
parties are excused from performance under this Agreement to the extent that a party is prevented from performing any
obligation, in whole or in part, as a result of causes beyond its reasonable control, including, acts of God, war, civil
disturbance, court order, govemmental intervention, Change in Law, nonperformance by the other party or any third
party, failures or fluctuations in electrical power, heat, light, air conditioning, or telecommunications equipment. Any
nonperformance under this Section 6.2 will not constitute a default or a ground for termination of this Agreement.
6.3 Indemnity. To the extent permitted by applicable Law applicable to Customer and each Member
County, Customer and Member County shall indemnify and hold harmless Cazemark and its officers, directors,
employees, agents, successors, and assigns ("Caremark Indemnitees") for, from and against any damages, costs, or
attorney's fees, actually incurred by Cazemark a Caremark Indemnitee, as the result of a claim brought by any third
party or a participant or beneficiary relating to the Services, provided that the Caremark Indemnitee has acted in a
manner that is consistent with this Agreement and applicable standards of care. The foregoing indemnification shall not
apply and shall not be enforceable to the extent any applicable Law prohibits a Member County from providing such
indemnification. Caremark shall indemnify and hold harmless Member County, Customer and their officers, directors,
employees, agents, successors, and assigns (collectively "Customer Indemnitees") for, from and against any damages,
costs, or attorney's fees, actually incurred by any Customer Indemnitee, as the result of a third party claim that
Cazemark, its officers, directors, employees, agents, successors, or assigns acted with negligence, willfully, and/or in
violation of applicable standards of caze, provided that the Customer Indemnitee has acted in a manner that is consistent
with this Agreement, the Consumer Card Program and applicable standards of care. However, nothing in this
Agreement is to be construed as a waiver of govemmental immunity as offered by the court or state law.
6.4 Compliance with Law. Customer and Member County will comply with all Laws applicable to its
prescription drug benefit plan, including without limitation insurance licensing, antitrust, consumer protection, and any
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other Laws that may apply. Caremark has no responsibility to advise Member County or Customer about the
applicability of or compliance with any applicable Law including, without limitation, HIPAA, the Employee Retirement
Income Security Act, or the Americans with Disabilities Act.
Caremark will comply with all Laws applicable to it and to the Services it provides under this Agreement. Member
County and Customer have no responsibility to advise Caremazk regarding its compiiance with any applicable Law.
Effective as of September 8, 2005, each party certifies that it shall not violate the federal anti-kickback statute, set forth
at 42 U.S.C. § 1320a-7b(b) ("And-Kickback Statute"), or the federal "Stark Law," set forth at 42 U.S.C. § 1395nn
("Stark Law"), with respect to the performance of its obligations under this Agreement. Further, Caremark shall ensure
that individuals meeting the definition of "Covered Persons" (as such term is defined in the Corporate Integrity
Agreement between the Office of Inspector General of the Department of Health and Human Services and
AdvancePCS) shall comply with Cazemark's Compliance Program, including training related to the Anti-Kickback
Statute and the Stark Law. Lt addition, Caremark's Code of Conduct and policies and procedures on the Anti-Kickback
Statute and Stark Law may be accessed at htt~:7/www.caremark.com/~slnoriall x.15573370?cros=CMS-2-007764.
6.5 Change in Law. The parties will attempt to equitably adjust the terms of this Agreement to take into
account any Change in Law or any material change in drug industry practice that materially alters the rights or
obligations of either party under this Agreement. If the parties are unable to agree upon an equitable adjustment within
sixty days after either party notifies the other of such a Change in Law or material change in drug industry practice, this
Agreement will automatically terminate.
6.6 Limitations. In no event shall either party be liable to the other party, nor shall Caremark be liable to
any Participant for any indirect, special, or consequential damages or lost profits, arising out of or related to
performance of this Agreement or a breach of this Agreement, even if advised of the possibility of such damages or lost
profits.
Caremark (and its affiliates, directors, employees, agents, successors or assigns) will not be liable for any claim which is
asserted by Member County or Customer more than ninety days after Member County or Customer is or reasonably
should have been aware of such claim, and will in no event be liable for any claim which is asserted more than twelve
months after the event resulting in damages or loss.
Caremark does not direct or exercise any control over the professionai judgment exercised by any pharmacist in
dispensing prescriptions or otherwise providing pharmaceutical related services at a Participating Pharmacy.
Participating Pharmacies are independent contractors, not subcontractors or agents of Caremark, and Cazemazk shall
have no liability to Member County or Customer for a claim azising out of any act or omission of any Participating
Pharmacy or its agents or employees.
7. TERM AND TERMINATION OF AGREEMENT.
7.1 Term. This Agreement is for an initial term of two years and four months from the Effective Date,
through July 31, 2008 ([he "Inifial Term"), and will automatically continue in effect for successive one year terms
thereafter, subject to the remaining provisions of this Section.
7.2 Termination. This Agreement may be terminated as follows;
a. By any party, with or without cause, at the end of the Initial Term or any renewal term, by
giving written notice to the others at least 60 days prior to the end of such Initial Term or renewal term;
b. Automatically, if the parties are unable to agree on an equitable adjustment under Section 6.5
of this Agreement;
c. By any party if another materially defaults in its performance of this Agreement and such
default continues without cure for a period of sixty days aRer the terminating party provides written notice to
the defaulting party specifying the nature of [he default;
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d. By any party, at its option, if any court, or governmental or regulatory agency issues to
another party an order or finding of impairment or insolvency, or an order to cease and desist from writing
business. The party receiving notice of an order or finding must provide the others written notice within two
business days of receipt;
e. By any party if another party: (i) makes an assignment for the benefit of creditors; (ii) has a
petition filed (whether voluntary or involuntary) under Title 11 of the United States Code, or any other similar
statute now or hereafter in effect; (iii) has a receiver, custodian, conservator, or tmstee appointed with respect
to all or a substantial part of its property; or (iv) has a proceeding commenced against it which substantially
impairs performance hereunder; or
f. By Caremark, immediately on written notice to Member County or Customer, if (i) either
fails to comply with the provisions of Section 3.1 of this Agreement, or (ii) Caremark determines, in its sole
discretion that Member County or Customer's program may not fully comply with all applicable Laws.
7.3 Effect of Termination and Survival.
Sections 4, 5 and 6 of this Agreement, and obligations arising under this Agreement prior to the
effective date of any termination, will survive termination.
8. NOTICES.
All notices under [his Agreement must be in writing, delivered in person, sent by certified mail, delivered by
air courier, or transmitted by facsimile and confirmed in writing (by air courier or certified mail) to a party at
the facsimile number and address shown in this Agreement. A party may notify the other party of any changes
in the listed address or facsimile number in accordance with the provisions of this Section. All notices aze
effective upon receipt.
Notices to Caremark must be addressed as follows:
Vice President, Client Contract Services
Cazemark Inc.
2211 Sanders Road, NBT9
Northbrook, )L 60062
Fax No.: 847-559-4302
With a copy to:
Managing Counsel, Client and Account Services
Caremark Inc.
2211 Sanders Road, NBT9
Northbrook, IL 60062
Fax No.: 847-559-4879
Notices to Customer must be addressed as follows:
National Association of Counties
440 First Street, NW
Washington, DC 20001
Attn: Mr. Andrew Goldschmidt, Director, Membership Marketing
Fax No.: (202) 393-2630
9. MISCELLANEOUS.
9.1 Entire Agreement; Interpretation; Amendment; Counterparts. This Agreement (including
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exhibits, schedules, attachments, or any addendum to this Agreement) constitutes the entire understanding and
obligation of the parties with respect to the Services and supersedes any prior agreements, writings, or understandings,
whether Drat or written. The headings in this Agreement are used only for convenience of reference and do not affect
the meaning or interpretation of any provision. The parties may amend this Agreement oniy through a properly
executed writing authorized by both parties. This Agreement may be executed in several counterparts, all of which
taken together constitute a single agreement between the parties.
9.2 Binding EffeM; Assignment. This Agreement is binding on the pazties and their respective
successors and permitted assigns. None of the parties may assign this Agreement, in whole or in part, without the prior
written consent of the others (which consent will not be unreasonably withheld); except that Caremazk may assign this
Agreement, in whole or in part, to any entiTy that controls, is controlled by, or is under common control with Caremark.
9.3 Independent Contractor; Third Parties. The parties to this Agreement are independent contractor,
and have no other legal relationship under or in connection with this Agreement. No term or provision of this
Agreement is for the benefit of any person who is not a parry hereto (including, without limitation, any Participant or
broker), and no such party wilt have any right or cause of action hereunder.
9.4 Waivers. Any failure by a party to comply with any covenant, agreement, or condition herein or in
any other agreements or instruments executed and delivered hereunder may be waived in writing by the party in whose
favor such obligation or condition runs; except that failure to insist upon strict compliance with any such covenant,
agreement, or condition will not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
9.5 Severability. In the event any term or provision of this Agreement is declared to be invalid or illegal
for any reason, this Agreement will remain in full force and effect and will be interpreted as though such invalid or
illegal provision were not a part of this Agreement. The remaining provisions will be construed to preserve the intent
and purpose of this Agreement and the parties will negotiate in good faith to modify any invalidated provisions to
preserve each party's anticipated benefits.
9.6 Enforcement Costs. If any party hereto institutes an action or proceeding to enforce any rights
azising under this Agreement, the party prevailing in such action or proceeding will be paid ail reasonable attorneys'
fees and costs to enforce such rights by the other party, such fees and costs to be set by the court, not by a jury, and to
be included in the judgment entered in such proceeding.
9.? Authority. Each party represents and warrants that it has the necessary power and authority to enter
into this Agreement and to consummate the transactions contemplated by this Agreement.
9.8 Exclusivity. Member County and Customer hereby grant Cazemazk during the term of [his
Agreement, and any renewals hereof, the exclusive right to provide a Consumer Card Program to Member County and
Customer. This exclusive right is solely applicable to Participants designated by Member County as eligible for the
Member County's discount consumer card program and shall not affect any other benefits or programs provided to
Participants by Member County. Member County and Customer further agree 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 Rebates or other discounts related to Participants under this Agreement. Member County and Customer also
agree to cancel any existing agreements or contracts with any drug manufacturers related to such drug Rebates or
discounts as of the Effective Date of this Agreement. In the event of a breach of this Section by Member County or
Customer, Cazemazk may terminate this Agreement. By entering into this Agreement, Customer does not endorse, and
Caremazk will not represent Customer's endorsement of any other programs or services which Cazemazk may offer to a
Member County or Participant.
9.9 Drug Classification and Pricing. Cazemazk shall use the latest edition of the First DataBank Blue
Book (with supplements), the Medi-Span Master Drug Pricing Source (with supplements), or any other nationally
recognized pricing source as the source for purposes of pricing and classifying drugs (e.g., legend vs. over the counter,
brand vs. generic) in connection with this Agreement.
10. DEFINITIONS. The following terms and phrases, when capitalized, have the meanings set forth below.
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a. "AWP" means the average wholesale price of the drug dispensed as set forth in the latest edition of
the First DataBank Blue Book (with supplements), the Medi-Span Prescription Pricing Guide (with supplements) or any
other similar nationally recognized reference selected by Caremark.
b. "Change in Law" means any (i) change in or adoption of any Law, (ii) change in the judicial or
administrative interpretation of any Law, or (iii) change in the enforcement of any Law, occurring after the date
Customer is implemented or the Effective Date, whichever is earlier.
c. "Claim(s)" mean those claims processed through the Caremazk on-line claims adjudication system or
otherwise transmitted or processed in accordance with the terms of this Agreement in connection with the Consumer
Card Program.
d. °Covered Items" mean the prescription drug benefits for which Participants are eligible pursuant to
Member County's drug benefit plan.
e. "Law" means any federal, state, local or other constitution, charter, act, statute, law, ordinance, code,
rule, regulation, order, specified standards or objective criteria contained in any applicable permit or approval, or other
legislative or administrative action of the United States of America, or any state or any agency, department, authority,
political subdivision or other instrumentality thereof or a decree or judgment or order of a court.
f. "Manufacturer" means a pharmaceutical company that has contracted with Caremark (or its affiliate
or agent) to offer discounts for pharmaceutical products in connection with Caremark's Formulary Services.
g. "Maximum Allowable Cost (MAC)" means the then current maximum allowable cost for a
prescription drug listed as a drug available from more than one Manufacturer in Caremazk's pharmaceutical MAC
pricing formula, including but not limited to formulas utilizing the Medi-Span Master Drug Pricing Source or First Data
Bank.
h. "Participant" means an individual designated by Member County as eligible for Covered Items
under the terms of the Consumer Card Program.
i. "Participating Pharmacy" means a pharnacy that has agreed to provide certain pharmacy services
to Participants in accordance with the leans of its agreement with Caremark. A list of Participating Pharmacies can be
accessed via Caremark's Internet website, which is subject to change from time to time.
j. "Rebate(s)" means, for any period, all rebates, reimbursements, or other discounts received under a
pharmaceutical manufacturer's discount program with respect to pharmaceutical products dispensed to a Participant
under the Consumer Cazd Program for such period.
NACo_k3-v2.doc (02/24/2006) [RxClaim] Page 2S of 29
EXHIBIT D
REDACTED CONTRACT
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized
officers or agents as of the date first above written.
CARENIARKPCS HEALTH, L.P.
NATIONAL ASSOCIATION OF COUNTIES By: CaremarkPCS Health Systems, LLC,
its General Partner
By: - SiP.tlature on File - = Sixtlature on File -
Lam E. Naake
Title: Executive Director Title:
Date: Date:
NACo_k3-v2.doc (0224(2006) [RxClaintJ Page 26 of 24
.EXHIBIT D
REDACTED CONTRACT
EXHIBIT A
ADDITIONAL SERVICES
Caremark will provide the following services if selected by Customer or Member County for an additional fee as set forth
in Exhibit B. The Services are subject to change as provided for in the Agreement. Capitalized terms not defined herein
will have the meanings used in [he Agreement.
I. Customer-Specific Programming. If Customer or Member County requests services or changes to
Services that require customized programming or systems work, Caremark will attempt to estimate the time and cost for
completion of such work. If Customer or Member County authorizes Caremark to perform such work, it will pay
Cazemazk the cost of performing such work at the programming rate set forth in Exhibit B.
NACo_k3-v2.doc (OY242006)[RxClaiml Page 27 of 29
EXHIBIT D
REDACTED CONTRACT
EXHIBIT B
FEES
[REDACTED DUE TO PROPRIETARY AND CONFIDENTIAL INFORMATION OF CAREMARK]
NACo_k3-v2.doc (02724@006)]R:Claim] Page 28 of 29
EXHIBIT D
REDACTED CONTRACT
EXHIBIT C
CAREMARKPCS HEALTH, L.P.
NATIONAL ASSOCIATION OF COUNTIES
MANAGED PHARMACY BENEFIT SERVICES AGREEMENT
FOR MEMBER COUNTY
This Managed Pharmacy Benefit Services Agreement for Member County effective
is entered into by and between CazemazkPCS Health, L.P. ("Caremark") and
("Member Couory").
Reference is hereby made to the Managed Pharmacy Benefit Services Agreement Consumer Card Program dated as of March I, 2006
(the "Agreement") among National Association of Counties ("Customer"), Member County, and Caremark under which
Customer has engaged Cazemazk to provide services to prescription drag plans for Customer and its Member Counties.
MEMBER COUNTY does hereby agree to be bound by, and to assume and perform, each and al] of the terms, covenants and
conditions of the Agreement as Member County (as defined in the Agreement) in the same manner and to the same extent as if it
were a party thereto. Member County acknowledges and agrees that Customer and Caremark may amend all or any portion of the
Agreement, except with respect to the Initial Term, and Member County hereby agrees to be bound by any such amendment.
Customer shall give Member County reasonable notice prior to the effective date of any such amendment. If such amendment is
adverse to Member County or its Participants, Member County may, within ninety (90) days of receiving such notice from Customer,
terminate its participation in the Agreement by giving prior written notice to Customer and Cazemazk.
Each party certifies that it shall not violate the federal anti-kickback statute, set forth at 42 U.S.C. § 1320a-7b(b) ("Anti-Kickback
Statute"), or the federal "Stark Law," set forth at 42 U.S.C. § 1395nn ("Stark Law'), with respect to the performance of its obligations
under this Agreement. Further, Caremark shall ensure that individuals meeting the definition of "Covered Persons" (as such term is
defined in [he Corporate IntegriTy Agreement between the Office of Inspector General of the Department of Health and Human
Services and AdvancePCS) shall comply with Cazemark's Compliance Program, including training related to the Anti-Kickback
Statute and the Stark Law. In addition, Caremazk's Code of Conduct and policies and procedures on the Anti-Kickback Statute and
Stark Law may be accessed at httn~//www Caremark Cora/wpsPoortal/ s 1 i5/'i70~cros=C'vtS-2-007764,
Customer and Cazemazly by their signatures hereto, accept and agree to Member County's participation with the Agreement under
the terms and conditions of the Agreement. By signing this Managed Pharmacy Benefit Services Agreement for Member County,
Member County acknowledges and agrees that [he terms of the Agreement have been completely read, fully understood and
voluntarily accepted and further agrees to be bound thereby.
NATIONAL ASSOCIATION OF COUNTIES
By: Sienalure on File
Title: CAREMARKPCS HEALTH, L.P.
By: CaremarkPCS Health Systems, LLC, its
Date: General Partner
MEMBER COUNTY: By: Sienature on File
Title:
[County Name]
Date:
By: Sienature on File
Title:
Date:
NACo_k3-v2.doc (02/242006)[RxClaim] Page 29 of 29