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HomeMy WebLinkAboutAgenda - 10-23-2007-4jORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date:. October 23, 2007 Action Agenda , Item No. --d _~ SUBJECT: Proposal to Participate in the NACo Prescription Drug Card Program DEPARTMENT: Social Services PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Fact Sheet Nancy Coston, 245-2800 Contract (Under Separate Cover) PURPOSE: To consider a proposal for Orange County to enter into a contract to participate in the NACo Prescription Drug Discount Card Program. BACKGROUND: The National Association of Counties (NACo), through a partnership with Caremark, provides a discount card that can be used by any uninsured person for a discount on prescriptions costs. There is no cost to counties for participating in the program and the cards are made available at no charge for persons to use. Orange County did investigate this program several years ago; however it was new at the time and no North Carolina counties were participating. Currently there are 48 counties in North Carolina participating in the program, including Catawba, Lee, Person, Union and Wake. The program provides persons presenting the card discounts averaging 20% of the retail costs of the prescriptions but also guarantees that the lowest available rate is used. The discount card does not apply to prescriptions that are covered by insurance, including Medicaid and Medicare. To participate in the program, Orange County would need to enter into a contract with Caremark and NACo. After the contract is signed, a design for the card with either the County name or County name and seal is finalized and the cards are then sent to the County. Since there is no enrollment for this program, the card may be distributed at multiple sites within the County. Currently, the time to receive the cards after submitting a contract is estimated to be 8-10 weeks. When the County receives the cards, it will also receive information to use in publicizing the program. This discount card can assist persons without prescription coverage and is accepted by most national pharmacies, including fourteen in Orange County. FINANCIAL IMPACT: There are no County costs related to implementing this program. RECOMMENDATION(S): The Manager recommends that the Board approve the contract to implement the NACo Prescription Discount Card Program, authorize the Chair to sign the contract after County Attorney review, and designate the Social Services Director as the contact person for the contract. ~~ National Association ofCountie$ Tt al(stn~ is xvitl.: cap e" The Voice ofAmerica s Counties NACo PRESCRIPTION DISCOUNT CARD PROGRAM FACT SHEET What It Is: The NACo drug discount card program helps consumers save money on their prescription medications any time their prescriptions are not covered by insurance. The free cards are distributed in the sponsoring county and may be used at any participating retail pharmacy. The discount card is not insurance. Savings: Savings average 20 percent; some discounts may be more, and some less, depending on the drug and quantity purchased. Cardholders are eligible for higher discounts on a three-month supply of some medications through mail service. Cardholders also can save on pet prescriptions at participating retail pharmacies. Who It's For: The cards may be used by all county residents, regardless of age, income or existing health coverage. There is no enrollment form, no membership fee and no restrictions or limits on frequency of use. Cardholders and their family members may use the card any time their prescriptions are not covered by insurance. What It Costs: Unlike many other card programs, there is no enrollment cost or membership fee. The cardholder pays the negotiated discount price or the pharmacy's retail price, whichever is lower. The average discount is 20 percent. Participating More than 57,000 pharmacies nationwide accept the card, including most chain Pharmacies: pharmacies and many independents. Wal-Mart pharmacies participate in the program. Additional The program has a safety feature that alerts pharmacists when one drug may conflict with Benefits: another medication the cardholder is taking, if the prescriptions were obtained with the NACo discount card. The NACo discount card program remains a useful option now that Medicare Part D has been implemented. For example, the card can be used when a Medicare Part D plan doesn't cover a drug. About The program is administered by Caremark Rx, Inc., a leading pharmaceutical services company Caremark: with broad experience in managing drug discount card programs for sponsoring clients. Caremark negotiates with pharmacies to offer a discount off their retail prices. Most pharmacies contract to participate because it draws customers to their stores. Caremark derives revenue from the program in the form of a small fee that the pharmacy pays on each transaction. The fee is a small fraction of the total transaction amount. Discount Rebates: Few manufacturers pay rebates on the discount card program. Caremark shares a Card Details portion of the rebate with the consumer at the point of sale via an increased discount. The retail pharmacy is reimbursed for this additional discount. Data Collection: Cardholder information remains confidential and is not resold to a third-party for any reason. Drug Distribution: Caremark negotiates with retail pharmacies to offer discounts off retail prices at the point of purchase. Some news reports have incorrectly stated that Caremark purchases prescription drugs and distributes them to retail pharmacies. Dear County Officials: The Prescription Drug Card Program contract 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, Parishes, Boroughs sign exhibit C of the contract which attaches the county to the overall NACo contract. If your county requires a copy of the signature page bearing the NACo and Caremark 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 of the contract wills BLA.N%signature lines) and the checklist to: Andrew Goldschmidt Director of Membership Marketing National Association of Counties 25 Massachusetts Ave, NW Sa' Floor Washington, DC 20001 3. Once the contract is received, our executive director will sign it and pass it on to Caremark for final signature. You may start your internal planning process to promote the program. 4. While the final signatures are being completed, please forward your logo or seal via a-mail to elandsman@naco.org or agoldschmidt@naco.org (if you prefer, you may have the card simply read XYZ County or XYZ CountyRx) and specify the quantity of card 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 8-10 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 Caremark's attention for approval prior to use. Please contact me or Andrew if you have any questions or need further information. NACo looks forward to 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 t/se county officials considering tl:e program without permission from NACo. N ~ ~ o Naho~ASsoWahon otCounGes *This checklist is not part of the NACo contract, however, please return it witli your signed contract *Incomplete or incorrect cl:ecklists will delay implementation of the 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 (w/City, State, Zip) Phone E-mail (We must have your a-mail address!) Fax 2. What is your county's anticipated start-up date for the program? CURRENT START UP TIME IS 8-10 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 NameRx" b. Logo/seal on cards a. Be sure to a-mail a black and white logo/seal to agoldscl:midt@naco.org or elandsman@naco.org in a jpg or.tiffformat ' b. Put "(COZIIVTYNAME) LOGO" in tl:e subject line ofyour a-mail c. Other. You must contact NACo if you do not choose either a or b. 4. How many cards are 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? ********************************************************************************** This section for NACo use only Copy of signed contract sent to Cazemazk7 Signed contract back from CazemazkT Proofs approved? Notes: NedonatAssoeistionoi.Criuniies ~~~ CAREMARIO'CS HEALTH, L.P. MANAGED PHARMACY BENEFTT SERVICES AGREEMENT CONSUMER CARD PROGRAM THIS RESTATED AGREEMENT (the "Agreement") is effective beginning March 1, 2006 (the "Effective Date") among National Association of Counties ("Customer"), counties that aze members of the National Association of Counties ("Member County") and CazemazkPCS Health, L.P., formerly Imown 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 Cazemazk's providing Services to such Member County. Cazemazk 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. 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"). Caremark 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. Cazemazk has created a network of Participating Pharmacies, 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 Cazemazk's voice response unit during Cazemazk's hours of operation. 1.5 Claims Processing. a. Submission of Claims. Caremark will adjudicate Claims submitted by Participating Pharmacies to Cazemazk 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 13 as applicable, plus a transaction fee from the Participant. 1.5 Customer Service. Caremark will make available to Customer, Member County and Participants a toll free number during those hours of operation maintained by Caremark. Staff will be available to answer questions on the Consumer Card Program and Consumer Card Program guidelines. 1.6 Identification Cards. Cazemazk 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. Cazemazk 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 (02/24/2006)1RaClaiml Page 1 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemazk, nor may it be duplicated or disclosed to 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 and/or general educational material. Participants, by notifying Cazemazk, may opt-out of such programs. b. DTJR 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 care providers in providing patient Gaze. 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, Cazemazk will have no obligation to acquire information concerning any Participant beyond the information that is included in Cazemazk's eligibility records or the Claims submitted by Participating Pharmacies in connection with the Consumer Card 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"). Cazemazk 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 rendered 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 market share or other factors. The term Rebates as used in this Agreement does not include these fees and discounts which belong exclusively to Cazemazk 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. Cazernazk may provide a program that will provide Participants with additional manufacturer discounts on certain drugs at the point of sale. From time to time, Cazemazk 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. Cazemazk will provide Member County and Customer with Cazemazk's standard management reports in connection with the Services, which reports may change from time to time at Cazemazk'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. Caremark 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 Caremark 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 (02/24/2006) (RxClaim] Page 2 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemazk, 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 pharmacist will be available 24 hours per day, seven days per week. b. Delivery and Dispensing. Caremark shall dispense through its mail service pharmacy new 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 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 Caremark's control as set forth in Section 6.2. Caremark'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 Preferred 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 SpecialtyRg"), 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 fulfilhnent 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, urilization and clinical management, integrated reporting and Claims processing ("SpecialtyRx 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. 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 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. NACo k3-v2.doc (02/24/2006) lRaClaim] Page 3 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemazk, 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, Caremark 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 Cazemazk. 2.2 Remedies. In the event Member County or Customer incurs any fee, as identified in Exhibit B, it will pay Cazemazk 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 Cazemazk's obligations under 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 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, Cazemazk may change the fees applicable to'the Consumer Card Program. Cazemazk 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 marketing) 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. Caremark will provide its standazd mazketing brochures, advertising materials and mail order forms, as applicable, to Member County at no cost. Caremark will work with and support each Member County in mazketing the Consumer Cazd 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 advefising materials (in any medium, including but not limited to written. communications, verbal communications and web based marketing), Member County and Customer will (i) obtain Cazemazk's approval on such forms, and (ii) pay a reasonable charge, as established by Caremark, for such materials if created or provided by Cazemazk. 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 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 to NACo k3-v2.doc (02/24/2006) [RaClaim~ Page 4 of29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemark, nor may it be duplicated or disclosed to others for any purpose. G~1 Cazemazk). Such records shall be limited to information necessary for validating the accuracy of the Rebate amounts distributed to Member County by Caremark. The parties agree that an independent third-party auditor agreeable to Customer and Caremark 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 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 Cazemazk'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 ("Confidential Information"), the value of which might be lost if the proprietary nature or confidentiality 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 Inforrriation 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 Cazemark with (i) notice of its intent to disclose Confidential Information and (ii) an opportunity for Cazemazk 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 Cazemazk 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 Confidential Information of any other to anyone outside of Cazemazk, Member County or Customer, 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 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 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 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. NACo k3-v2.doc (02/24/2006) [RxClaiml Page 5 of 29 This document contains proprietary information of Cazemazk, 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. ~o 5.6 Proprietary to Caremark. Member County and Customer acknowledge that the Formulary is proprietary to Cazemazk. Further, all Caremark databases, as well as the software, hazd coding, and logic used to generate the compilations of information contained in Cazemazk's Claims adjudication system and in all other databases developed by Caremark or its designees in connection with performing Services including identifiers assigned by Caremark, 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 Cazemazk and are protected by copyright which shall be owned by Cazemazk. 5.7 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 Cazemazk, 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. Cazemazk 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 WAR]~tANTIES OF ANY KIND, INCLUDING 'TIS SUITABILITY FOR ANY PARTICULAR PURPOSE OF TIC DATA GENERATED THROUGH THE CAREMARK SYSTEM. CAREMARK RELIES ON FIIZST 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 'I'II DATABASES AND 'TFiE FORMULARY IS INTENDED AS A SUPPLEMENT TO, AND NOT A SUBSTITUTE FOR, TIC 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 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, in whole or in part, as a result of causes beyond its reasonable control, including, acts of God, waz, civil disturbance, court order, govermnental 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 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 Cazemazk 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 standazds of Gaze. 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 NACo k3-v2.doc (02/24/2006)1RxClaiml Page 6 of 29 This document contains proprietary information of Caremazk, 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. Caremark, 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 Card 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. 6.4 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 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 Caremark regazding its compliance 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) ("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 Cazemazk's Compliance Program, including training related to the Anti-Kickback Statute and the Stark Law. In addition, Cazemazk's Code of Conduct and policies and procedures on the Anti-Kickback Statute and Stazk Law may be accessed at http://www.caremark.com/wps/portal/ 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 off' 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. Cazemazk (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. Cazemazk 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 Caremark shall have no liability to Member County or Customer for a claim arising 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 (the "Initial Term"), and will automatically continue in effect for successive one yeaz terms thereafter, subject to the remaining provisions of this Section. 7.2 Termination. This Agreement may be terminated as follows: a. By any pazty, 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; NACo k3-v2.doc (02/24/2006) IRxClaiml Page 7 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 Caremazk, nor may it be duplicated or disclosed to others for any purpose. ~a 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 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 govermnental 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 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 this 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 are effective upon receipt. Notices to Cazemazk must be addressed as follows: Vice President, Client Contract Services Caremark Inc. 2211 Sanders Road, NBT9 Northbrook, IL 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 NACo k3-v2.doc (02/24/2006} 1RxClaiml Page 8 of 29 This document contains proprietary information of Cazemazk, 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. 1 ~~ 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 entire 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 are 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 Agreement 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 Agreement, in whole or in part, without the prior written consent of the others (which consent will 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 Caremark. 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, 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 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 cazd 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, Caremark may terminate this Agreement. By entering into this Agreement, Customer does not endorse, and Caremark will not represent Customer's endorsement of any other programs or services which Caremark 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 Drug Pricing Source (with supplements), or any other nationally NACo k3-v2.doc (02/24/2006) IRaClaiml Page 9 of29 This document contains proprietary information of Cazemazk, 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. I "T 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. "AR'P" 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 Cazemazk 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 standazds 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 Caremazk'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 Cazemazk'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 Cazd 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 Caremark. A list of Participating Pharmacies can be accessed via Cazemazk'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. NACo k3-v2.doc (02/24/2006) (RxClaiml Page 10 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemark, nor may it be duplicated or disclosed to others for any purpose. is IN WITNESS R'HEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers or agents as of the date first above written. CAREMARI~CS HEALTH, L.P. NATIONAL ASSOCIATION OF COUNTIES By: CaremarkPCS Health Systems, LLC, its General Partner By: Larry E. Naake Title: Executive Director Title: Date: Date: NACo k3-v2.doc (02/24/2006) (RxClaim~ Page 11 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemazk, nor may it be duplicated or disclosed to others for any purpose. ~~ EXHIBIT A ADDTI'IONAL SERVICES Cazemazk will provide the following services if selected by Customer or Member County for an additional fee as set forth in Exhibit 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 estunate the time and cost for completion of such work. If Customer or Member County authorizes Garemark to perform such work; it will pay Caremark the cost of performing such work at the programming rate set forth in Exhibit B. NACo k3-v2.doc (02/24/2006) (RaClaiml Page 12 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemark, nor may it be duplicated or disclosed to others for any purpose. ,~ National Association of Counties Effective March 1, 2006 EXHIBTI'B ADMINISTRATIVE FEES As consideration for the Services selected by Member County in accordance with the Agreement, Member County will pay to Caremark the fees set forth below: Administrative Fees Per Processed Retail Claim Per Processed Mail Claim $0.00 $0.00 As consideration for the Consumer Card Program selected by Member County in accordance with this Agreement, Member County will pay to Cazemazk 100% of the Rebates collected from Manufacturers pursuant to this Agreement. Consumer Card Program Retail Network Rates t Brand: AWP-13%+ $3.50 transaction fee or Usual & Customary Generic: AWP-13%+ $3.50 transaction fee, MAC + $3.50 transaction fee or Usual & Customary Mail Service Ratest Brand: AWP-I9%+ $1.00 dispensing fee Generic: AWP-50% + $1.00 dispensing fee Saecialty Pharmacy Rates2 AWP-13%+ $3.50 dispensing fee Other Fees Section 1.6 -Card Issuance No chazge Exhibit A(1) - Customer Specific Programming $150.00/Hour Note: Charges or Services not identified above will be quoted upon request. 1. 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 are bio-technological in nature, compound drugs and those requiring special handling. 2. This rate will apply to Claims for 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, compound 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 percent per month, unless such rate exceeds the maximum rate allowable by applicable Law, in which case such amounts shall bear interest at the maximum legally allowable rate. Contingency. All prices are contingent upon Member County's full adoption of Cazemazk's Performance Drug List and formulary management and intervention programs. NACo k3-v2.doc (02/24/2006) ~RxClaiml Page 13 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemazk, nor may it be duplicated or disclosed to others for any purpose. ~i~ EXHIBIT B ADMINISTRATITTEFFES Handling Costs. Customer or Member County is in all events responsible for any postage costs or other mailing and handling-related costs incurred by Cazemazk in connection with the provision of Services or additional services, except as to costs associated with standard Consumer Cazd Program materials that aze shipped by bulk mail to Customer or Member County. ' Tazes. It is the understanding of the parties that Participating Pharmacies shall collect from Participants all applicable taxes 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 aze the responsibility of Member County. NACo k3-v2.doc (02/24/2006) IRaClaiml Page 14 of 29 This document contains proprietary information of Cazemazk, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemazk, nor may it be duplicated or disclosed to others for any purpose. 1~ F.~I'HIBTI' 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 Card Program dated as of March 1, 2006 (the "Agreement") among National Association of Counties ("Customer"), Member County, and Cazemazk under which Customer has engaged Cazemazk 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 all 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, 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 Cazemazk's Compliance Program, including training related to the Anti-Kickback Statute and the Stazk Law. In addition, Cazemazk's Code of Conduct and policies and procedures on the Anti-Kickback Statute and Stark Law may be accessed at http://www.cazemark.com/wps/portal/ 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: Date: MEMBER COUNTY: [County Name] By: Title: Date: CAREMARKPCS HEALTH, L.P. By: CaremarkPCS Health Systems, LLC, its General Partner By: Title: Date: NACo k3-v2.doc (02/24/2006) (RaClaim] Page 15 of 29 This document contains proprietary informafion of Cazemark, and may not be used for any purpose other than to evaluate entering into a relationship with Cazemazk, nor may it be duplicated or disclosed to others for any purpose. ~~ E~IIBIZ' D REDACTED CONTRACT CAREMARKl"CS HEALTH, L.P. MANAGED PHARMACY BENEFIT SERVICES AGREEMENT CONSUMER CARD PROGRAM THIS RESTATED AGREEMENT (the "Agreement") is effective beginning March 1, 2006 (the "Effective Date") among National Association of Counties ("Customer"), counties that are members of the National Association of Counties ("Member County") and CazemazkPCS 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 Caremark in the form attached hereto as Exhibit C (the "Member County Agreement") prior to Cazemazk'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. 1. STATEMENT OF SERVICES /OBLIGATIONS. 1.1 Services. Cazemazk 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"). Caremark 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. Cazemazk has created a network of Participating Pharmacies, which will perform pharmacy services for Participants. 1.3 Pharmacy H@Ip Desk and Voice Response Unit. Caremark will provide Participating Pharmacies with help desk assistance and access to Cazemazk's voice response unit during Cazemazk's hours of operation. 1.4 Claims Processing. a. Submission of Claims. Caremazk 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. Caremark will make available to Customer, Member County and Participants a toll free number during those hours of operation maintained by Cazemazk. 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.. Cazemazk will work with Member County on the distribution method for identification cards; prov]ded, 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 cazd. 1.7 Clinical Services and Drug Utilization Review ("DUR"). a. Clinical Services. Cazemazk may provide to Member County its member compliance programs and other programs designed to ensure proper drug utilizafion and encourage the use ofcost-effective NACo_k3-v2.doc (02/24/2006) [RaClaim] Page 16 of 29 ~i EXHIBIT D .REDACTED CONTRACT 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 and/or general educational material. Participants, by notifying Caremark, 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 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, Cazemazk will have no obligation to acquire information concerning any Participant beyond the information that is included in Cazemark's eligibility records or the Claims submitted by Participating Pharmacies in connection with the Consumer Card Program. 1.8 Formulary Services. Caremark 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"). 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. Cazemazk contracts with certain Manufacturers for Rebate programs. b. [REDACTED DUE TO PROPRIETARY AND C(JNFIDENTIAL 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. Caremark may provide a program that will provide Participants with additional manufacturer discounts on certain drugs at the point of sale. From time to time, Cazemazk 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. Cazemazk will provide Member County and Customer with Cazemazk's standard management reports in connection with the Services, which reports may change from time to time at Cazemazk's discretion. Member County and Customer may elect to receive a reasonable number of the standazd management reports made available by Caremark. 1.10 Mail Service Program. Caremark 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 Cazemazk 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. 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 pharmacist will be available 24 hours per day, seven days per week. b. Delivery and Dispensing. Cazemazk shall dispense through its mail service pharmacy new NACo_k3-v2.doc (02/24/2006) [RxClaim] Page 17 of29 c~S oC F.~i'HIBIT D REDACTED CONTRACT 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 are in the United States. Cazemazk shall not be liable to Member County, Customer or Participant for any delay in delivery resulting from circumstances beyond Cazemazk's control as set forth in Section 6.2. Cazemazk'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. Cazemazk and the retail Participating Pharmacies will work together to encourage the use of Preferred 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. Cazemark'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 aze generally biotechnological in nature, aze given by injection, or otherwise require special handling ("Specialty Medications"). Caremark 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 ("SpecialtyRg 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. Mail/commercial carrier. In accordance with the Consumer Cazd 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. Caremark SpecialtyRx pharmaceutical caze management services include but may not be limited to: (1) patient profiling focusing on the appropriateness of Specialty Medication therapy and caze 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 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] 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 Cazemazk's obligations under NACo_k3-v2.doc (02/24/2006) [Reclaim) Page 18 of 29 a~ EXHIBIT D REDACTED CONTRACT 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 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, 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 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. Cazemazk 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 standard marketing brochures, advertising materials and mail order forms, as applicable, to Member County at no cost. Cazemazk 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 Cazemazk's approval on such forms, and (ii) pay a reasonable change, as established by Caremark, for such materials if created or provided by Caremark. 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. Cazemazk, 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 Cazemazk, 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 Caremark). Such records shall be limited to information necessary for validating the accuracy of the Rebate amounts distributed to Member County by Cazemazk. The parties agree that an independent third-party auditor agreeable to Customer and Cazemazk 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 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 Cazemazk's office where such records aze located, during normal business hours, without undue interference with business activities, and in accordance with reasonable audit procedures. NACo_k3-v2.doc (02/24/2006) [RaClaiml Page 19 of 29 ~~ EXHIBIT D REDACTED CONTRACT 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 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 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 Caremark with (i) notice of its intent to disclose Co~dential Information and (ii) an opportunity for Cazemazk 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 Caremark 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 Caremark, Member County or Customer, 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 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 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 al] 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, Cazemazk will destroy or will return 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. 5.6 Proprietary to Caremark. Member County and Customer acknowledge that the Formulary is proprietary to Caremark. Further, all Caremark databases, as well as the software, hard coding, and logic used to generate the compilations of information contained in Cazemazk's Claims adjudication system and in all other databases developed by Caremark or its designees in connection with performing Services including identifiers assigned by Caremark, 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 Cazemazk and are protected by copyright which shall be owned by Caremark. 5.7 Tradenames; Trademarks; and Service Marks. None of the parties hereto may use any NACo_k3-v2.doc (02/24/2006) [RxClaim] Page 20 of 29 ~5 EXFIIBlT D REDACTED CONTRACT tradenames, trademarks or service marks of another, or any word or symbol likely to be confused with such tradenames, trademarks or service mazks, unless authorized in writing or as expressly permitted by this Agreement. 5.8 Remedies. Any unauthorized disclosure or use of Confidential Information would cause Cazemazk, Member County or Customer immediate and irrepazable 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. Caremark 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 WAR]~ANTED IN TICS SECTION 6.1, CAREMARK DISCLAIMS ALL EXPRESS AND ALL IMPLIED WARRANTIES OF ANY KIND, INCLUDING THE SUITABILITY FOR ANY PARTICULAR PURPOSE OF TI-~ DATA GENERATED THROUGH TI-~ CAREMARK SYSTEM. CAREMAI2K RELIES ON FIRST DATABANK, MEDI-SPAN, OR INDUSTRY COMPARABLE DATABASES IN PROVIDING CUSTOMER, MEMBER COUNTY AND PARTICIPANTS WITH DRUG UTILIZATION REVIEW SERVICES. CAREMAIZIC HAS UTILIZED DUE DILIGENCE IN COLLECTING AND REPORTING TIC INFORMATION CONTAINED IN THE DATABASES AND HAS OBTAINED SUCH INFORMATION FROM SOURCES BELIEVED TO BE RELIABLE. CAREMARK, HOWEVER, DOES NOT WARRANT TIC ACCURACY OF REPORTS, ALERTS, CODES, PRICES, OR OTIdER DATA CONTAINED IN 'THE DATABASES. TIC CLII~ICAL INFORMATION CONTAINED IN TT-IE DATABASES AND THE FORMULARY IS INTENDED AS A SUPPLEMENT TO, AND NOT A SUBSTITUTE FOR, TIC KNOWLEDGE, EXPERTISE, SKILL, AND JUDGMENT OF PHYSICIANS, PHARMACISTS, OR OTHER HEALTH-CARE PROFESSIONALS INVOLVED IN PARTICIl'ANT'S CARE. TIC ABSENCE OF A WARNING FOR A GIVEN DRUG OR DRUG COMBINATION SHALL NOT BE CONSTRUED TO INDICATE THAT TIC 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, in whole or in part, as a result of causes beyond its reasonable control, including, acts of God, war, civil disturbance, court order, governmental 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 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 Cazemazk a Cazemazk Indemnitee, as the result of a claim brought by any third party or a participant or beneficiary relating to the Services, provided that the Cazemazk Indemnitee has acted in a manner that is consistent with this Agreement and applicable standards of caze. 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. Cazemazk 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 Cazemazk, its officers, directors, employees, agents, successors, or assigns acted with negligence, willfully, and/or in violation of applicable standards' of care, provided that the Customer Indemnitee has acted in a manner that is consistent with this Agreement, the Consumer Card Program and applicable standazds 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. 6.4 Compliance with Law. Customer and Member County will comply with all Laws applicable to its prescription drug benefit plan, including without ]imitation insurance licensing, antitrust, consumer protection, and any NACo_k3-v2.doc (02/24/2006) [RaClaim] Page 21 of 29 ~~ F.XI3IBlT D REDACTED CONTRACT 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, HII'AA, 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 Cazernazk regazding its compliance 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) ("Anti-Kickback Statute"), or the federal "Stark Law," set forth at 42 U.S.C. § 1395nn ("Stazk 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, Cazemazk's Code of Conduct and policies and procedures on the Anti-Kickback Statute and Stark Law may be accessed at http•//www cazemark com/wps/nortaU 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 aze 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. Cazemazk (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 Caremark shall have no liability to Member County or Customer for a claim arising 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 (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 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 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; NACo_k3-v2.doc (02/24/2006) [RaClaim] Page 22 of 29 ~~ EXHIBIT D REDACTED CONTRACT d. By any party, at its option, if any court, or governmental or regulatory agency issues to another party an order or fording 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 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 this 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 are effective upon receipt. Notices to Cazemazk must be addressed as follows: Vice President, Client Contract Services Cazemazk Inc. 2211 Sanders Road, NBT9 Northbrook, II, 60062 Fax No.: 847-559-4302 With a copy to: Managing Counsel, Client and Account Services Cazemazk 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 NACo_k3-v2.doc (02/24/2006) [RaClaim] Page 23 of 29 a~ EXHIBTI' D .REDACTED CONTRACT 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 oral 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 only 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 Effect; Assignment. This Agreement is binding on the parties 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 Caremark 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 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, agreement, or condition herein or in any other agreements or instruments executed and delivered hereunder may be waived m 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 declazed 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 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 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, Caremark may terminate this Agreement. By entering into this Agreement, Customer does not endorse, and Cazemazk will not represent Customer's endorsement of any other programs or services which Caremark 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 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. NACo_k3-v2.doc (02/24/2006) [luClaim] Page 24 of 29 ~~ FXHIBI1' D REDACTED CONTRACT 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 eazlier. 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 Cazd 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 pernut 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 Cazemazk'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 Cazemazk'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 pharmacy that has agreed to provide certain pharmacy services to Participants in accordance with the terms of its agreement with Cazemazk. A list of Participating Pharmacies can be accessed via Cazemazk'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 pharmaceutics] manufacturer's discount program with respect to pharmaceutical products dispensed to a Participant under the Consumer Card Program for such period. NACo_k3-v2.doc (02/24/2006) [RaClaim] Page 25 of 29 ~~ EXHIBTl 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. NATIONAL ASSOCIATION OF COUNTIES CAREMARKPCS HEALTH, L.P. By: CaremarkPCS Health Systems, LLC, its General Partner By: -Signature on File - LarrYE. Naake Title: Executive Director Date: - Signature on File - Title: Date: NACo_k3-v2.doc (02/24/2006) [RaClaimj Page 26 of29 ~~ EXHIBIT D REDACTED CONTRACT EXFIIBIT A ADDTI'IONAL 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 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 Exhibit B. NACo_k3-v2.doc (02/24/2006) [RaClaim] Page 27 of 29 ~a EXHIBIT D .REDACTED CONTRACT EXFIIBIT B FEES [REDACTED DUE TO PROPRIETARY AND CONFIDENTIAL INFORMATION OF CAREMARI~.] NACo_k3-v2.doc (02/24/2006) [RxClaim) Page 28 of 29 .~ 3 EXHIBIT D .REDACTED CONTRACT CAREMARKPCS HEALTH, L.P. NATIONAL ASSOCIATION OF COUNTIES MANAGED PHARMACY BENEFTI' 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 EXIIIBIT C ("Member County"). Reference is hereby made to the Managed Pharmacy Benefit Services Agreement Consumer Card Program dated as of March 1, 2006 (the "Agreement") among National Association of Counties ("Customer"), Member County, and Cazemazk under which Customer has engaged Cazemazk 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 all 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 Cazemazk 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 defmition 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, Cazemazk's Code of Conduct and policies and procedures on the Anti-Kickback Statute and Stark Law may be accessed at http://www.caremark.com/wps/portaU s.155/3370?cros=CMS-2-007764. Customer and Cazemazk, 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: Signature on File Title: Date: MEMBER COUNTY: [County Name] By: Signature on File Title: Date: CAREMARKI'CS HEALTH, L.P. By: CaremarkPCS Health Systems, LLC, its General Partner By: Signature on File Title: Date: NACo_k3-v2.doc (02/24/2006) [RxClaim] Page 29 of 29