MMCAP Contract No.: MMS15001
Page 1 of 14
Pharmaceutical
Wholesaler Services Contract
Minnesota Multistate Contracting Alliance for Pharmacy
SWIFT Contract No.:
This Contract is between the State of Minnesota, acting through its Minnesota Multistate Contracting
Alliance for Pharmacy (“State” or “MMCAP”) and
Cardinal Health 110, LLC, Cardinal Health 411, Inc. and
Cardinal Health 107, LLC, whose designated business address is 7000 Cardinal Place, Dublin, Ohio
43017 (collectively, “WHOLESALER”).
Recitals
1. Under Minn. Stat. § 16C.03 and § 471.59, the Commissioner of Administration, on behalf of MMCAP,
is empowered to engage such assistance as deemed necessary.
2. MMCAP, a group purchasing organization as defined in 42 U.S.C. § 1320a-7b(b)(3)(c), is in need of
pharmaceutical wholesaler to distribute pharmaceuticals, OTCs, nutritionals, vaccines (other than
influenza vaccines), and other products to its members.
3. The WHOLESALER represents that it is duly qualified and agrees to perform all services described in
this Contract to the satisfaction of MMCAP.
Contract
1. Term of Contract and Exhibits
1.1
Effective date:
November 1, 2014,
or the date MMCAP obtains all required signatures under
Minn. Stat. § 16C.05, subd. 2, whichever is later.
The WHOLESALER must not begin work
hereunder until this Contract is fully executed and the WHOLESALER has been notified
by MMCAP’s Authorized Representative to begin the work. Further, the pricing and
benefits offered hereunder will not be available until the effective date as set forth above.
1.2
Expiration date:
October 31, 2016, or until all obligations have been satisfactorily fulfilled,
whichever occurs first. The Contract may be extended for up to an additional three (3) years, at
increments determined by MMCAP, on written acceptance by both parties, for a total term not to
exceed five (5) years.
1.3
Survival of terms.
The following clauses survive the expiration or cancellation of this Contract:
2. Definitions; 5. Fees and Payment; 6. Conditions of Payment; 8. Notices; 10. Indemnification;
11. Audits; 12. Government data practices; 13. Intellectual Property and Data Rights; 17. Publicity
and endorsement; 18. Governing law, jurisdiction, and venue; 19. Data disclosure; 30.
Severability; and 36. State Terms and Participation.
1.4
Attachments.
The following Attachments are attached and incorporated into this Contract, and
are set forth in their order of precedence:
MMCAP Contract No.: MMS15001
Page 2 of 14
1.4.1
Attachment A, Scope of Work
1.4.2
Attachment B, Discounts and Fees
1.4.3
Attachment C, Service Fee Discount Matrix
1.4.4
Attachment D, Wholesaler’s Returned Goods Policy
1.4.5
Attachment E, Member Participating Agreements (MPA), and its Exhibits, if
applicable
2. Definitions
To the extent that they do not diminish, derogate, or otherwise modify the express language set forth
in this Contract, the definitions set forth in any exhibits or attachments, as attached an incorporated
herein, shall apply to the Contract document.
3. Time
The WHOLESALER must comply with all the time requirements described in this Contract. In the
performance of this Contract, time is of the essence.
4. Wholesaler’s duties
The WHOLESALER, who is not a State employee, will perform the duties specified in
Attachment A,
Scope of Work,
which is attached and incorporated into this Contract.
5. Fees and Payment
5.1
Additional Fees.
Subject to
Attachment B,
Discounts and Fees
no fee, percentage, or other cost
may be added to the products purchased under this Contract unless the fee, percentage, or cost
is defined and approved in writing by MMCAP and a formal amendment is executed by the
parties.
5.2
Fees.
Subject to
Attachment C
,
Service Fee Discount Matrix
as attached and incorporated
herein, all changes to the MMCAP Service Fee Matrix will be communicated to MMCAP in writing
with a minimum of five (5) business days’ notice prior to the effective date of the changes.
WHOLESALER service fees may only change on a quarterly or less frequent basis.
5.3
Federal funds
.
Payments under this Contract may be made from federal funds. The
WHOLESALER is responsible for compliance with all federal requirements imposed on these
funds and accepts full financial responsibility for any requirements imposed by the
WHOLESALER’s failure to comply with federal requirements.
6. Conditions of payment
All services provided by the WHOLESALER under this Contract must be performed to the reasonable
satisfaction of MMCAP and the MMCAP Member, and in accordance with all applicable federal, state,
and local laws, ordinances, rules, and regulations. The WHOLESALER will not receive payment for
work found by MMCAP (as directed by the MMCAP Member) to be unsatisfactory or performed in
violation of federal, state, or local law.
7. Authorized Representative
MMCAP's Authorized Representative is Ms. Debra López-Burandt, MMCAP Wholesaler Coordinator,
112 Administration Building, 50 Sherburne Avenue, St. Paul, MN 55155, 651-201-3053, debra.lopez-
burandt@state.mn.us or her successor or designee, and has the responsibility to monitor the
WHOLESALER’s performance and the authority to accept the services provided under this Contract.
If MMCAP’s Authorized Representative changes at any time during this Contract, MMCAP must
immediately notify the Wholesaler.
MMCAP Contract No.: MMS15001
Page 3 of 14
The WHOLESALER's Authorized Representative is Lisa Penn Director, National Accounts
at the
following business address and telephone number: 7000 Cardinal Place, Dublin, OH 43017, 614-553-
3604 lisa.penn@cardinalhealth.com, or his/her successor or designee. If the WHOLESALER’s
Authorized Representative changes at any time during this Contract, the WHOLESALER must
immediately notify MMCAP.
8. Notices
If one party is required to provide legal notice or notice under the terms of the Contract to the other,
such notice will be in writing and will be effective upon dispatch. Delivery shall be by certified United
States mail, or by email or facsimile transmission provided the receipt of the transmission is
confirmed by the receiving party. Either party must notify the other of a change in address for
notification purposes. All notices should be addressed as follows:
MMCAP Wholesaler Coordinator
Minnesota Multistate Contracting Alliance for
Pharmacy
112 Administration Building
50 Sherburne Avenue
St. Paul, MN 55155
Fax: 651-201-3053
VP, National Accounts
With a copy to: General Counsel
Cardinal Health 110, LLC
Cardinal Health 411, Inc.
Cardinal Health 107, LLC
7000 Cardinal Place
Dublin, OH 43017
9. Assignment, amendments, waiver, and Contract complete
9.1
Assignment.
The WHOLESALER may neither assign nor transfer any rights or obligations under
this Contract without the prior consent of MMCAP and a fully executed assignment agreement,
executed and approved by the same parties who executed and approved this Contract, or their
successors in office. MMCAP may not assign or transfer any rights or obligations under this
Contract to any entity outside the State of Minnesota executive branch, without the prior consent
of WHOLESALER and a fully executed assignment agreement, executed and approved by the
same parties who executed and approved this Contract, or their successors in office.
9.2
Amendments.
Any amendment to this Contract must be in writing and will not be effective until it
has been executed and approved by the same parties who executed and approved the original
Contract, or their successors in office.
9.3
Extraneous Agreements.
The WHOLESALER shall not enter into any additional agreement,
with any MMCAP Member, arising from this Contract for similar services, or amend this Contract
in any way, without the written authorization of MMCAP’s managing director.
9.4
Waiver.
If either party fails to enforce any provision of this Contract, that failure does not waive
the provision or its right to enforce it.
9.5
Contract complete.
This Contract contains all negotiations and agreements between MMCAP
and the WHOLESALER. No other understanding regarding this Contract, whether written or oral,
may be used to bind either party.
10. Indemnification; Warranty
The WHOLESALER must indemnify, save, and hold MMCAP and MMCAP Member, including their
agents, and employees harmless from any thirty party claims or causes of action, including attorneys’
fees incurred by MMCAP or its MMCAP Member, arising out of the performance of this Contract by
the WHOLESALER or the WHOLESALER’s agents or employees. This clause will not be construed
to bar any legal remedies the WHOLESALER may have for MMCAP’s or the MMCAP Member’s
failure to fulfill its obligations under this Contract. Pursuant to the Minnesota Constitution Article XI,
Section 1, MMCAP is not permitted to indemnify the WHOLESALER.
MMCAP Contract No.: MMS15001
Page 4 of 14
WHOLESALER DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR
PURPOSE. IN NO EVENT WILL WHOLESALER BE LIABLE TO THE STATE, MMCAP, ANY
MMCAP MEMBER OR ANY MMCAP PARTICIPATING FACILITY FOR ANY INCIDENTAL,
CONSEQUENTIAL OR SPECIAL CLAIMS, LIABILITIES OR DAMAGES.
WHOLESALER will transfer to MMCAP and MMCAP Member (on a non-exclusive basis) any
representations and warranties made by the manufacturers of the products to the extent that such
representations and warranties are assignable by WHOLESALER, and will cooperate with all
reasonable requests made by MMCAP and/or MMCAP Member to enforce such representations and
warranties against such manufacturers. Notwithstanding anything to the contrary herein,
WHOLESALER reserves its own rights under such representations and warranties made by such
manufacturers and the remedies available to it for any breach of such representations and warranties
by the manufacturers.
11. Audits
11.1
State Audit.
Under Minn. Stat. § 16C.05, subd. 5, the WHOLESALER’s books, records,
documents, and accounting procedures and practices relevant to this Contract are subject to
examination by the State, MMCAP, and/or the State Auditor or Legislative Auditor, as
appropriate, for a minimum of six (6) years from the end of this Contract.
11.2
Invoice and Pricing Audit.
MMCAP and MMCAP Members served by this Contract may
periodically audit WHOLESALER to determine the validity of invoice pricing. Such audits may
be conducted only during ordinary business hours and upon reasonable notice.
11.3
Costs.
WHOLESALER, MMCAP, and MMCAP Members shall each be responsible for its own
costs associated with any audit, including costs related to the production of records and/or
other documents requested by the other party.
12. Government data practices
12.1
Data Practices Act.
The WHOLESALER and State must comply with the Minnesota
Government Data Practices Act, Minn. Stat. ch. 13, as it applies to all data provided by the
State under this Contract, and as it applies to all data created, collected, received, stored, used,
maintained, or disseminated by the WHOLESALER under this Contract. The civil remedies of
Minn. Stat. § 13.08 apply to the release of the data governed by the Minnesota Government
Practices Act, Minn. Stat. ch. 13, by either the WHOLESALER or the State.
12.2
Notification.
If the WHOLESALER receives a request to release the data referred to in this
clause, the WHOLESALER must immediately notify and consult with MMCAP’s Authorized
Representative as to how the WHOLESALER should respond to the request. The
WHOLESALER’s response to the request shall comply with applicable law.
12.3
Release of MMCAP data.
Except as may be required by Minnesota Data Practices Act, Minn.
Stat. Ch. 13, or as provided in Section 13, WHOLESALER shall not release to any third party
any MMCAP customer data, sales transaction data, DEA/HIN information, contract pricing, EDI
transaction data, reverse distribution data, or payment data.
13. Intellectual Property and Data Rights.
13.1
MMCAP Ownership.
MMCAP owns all rights, title, and interest in MMCAP customer data,
sales transaction data, DEA/HIN information (subject to third-party rights), contract pricing, EDI
transaction data, reverse distribution data, and payment data, including copyrights and trade
secrets contained therein. MMCAP grants to WHOLESALER an unlimited, non-revocable,
nontransferable, fully paid license, for the term of this Contract, to (i) release state specific data
MMCAP Contract No.: MMS15001
Page 5 of 14
to an MMCAP Member’s State primary contact; (ii) release any of the above data to product
manufacturers, when necessary for the performance of this Contract or as required by
WHOLESALER’s agreements with such product manufacturers; (iii) to release any of the above
data to other MMCAP-approved third parties, when necessary for the performance of this
Contract; (iv) to provide MMCAP Member purchase data to aggregators, including IMS Health
and NDC Health, subject to WHOLESALER’s reasonable efforts to require such data
aggregators to protect any identifiable data from discovery by another third party; and (v) to
provide MMCAP Member purchase data to other group purchasing organizations of which the
MMCAP Member is also a member, provided such data will not include MMCAP-identifiable
data. Any MMCAP identifiable data provided hereunder to a third party must identify the data
as MMCAP data and subject to Minn. Stat. Ch. 13. WHOLESALER hereby agrees that in the
event that MMCAP or an MMCAP Member requests in writing that its purchase data be kept
confidential, such data will not be provided to third party aggregators.
13.2
WHOLESALER Ownership.
WHOLESALER owns all rights, title, and interest to any
aggregated data not identifiable as arising from this Contract and any other intellectual property
created for or presented to MMCAP. WHOLESALER grants to MMCAP an unlimited, non-
revocable, non-transferable, fully paid, perpetual license, to use all intellectual property created
for or presented to MMCAP under this Contract.
13.3
Pre-Existing Intellectual Property.
MMCAP and WHOLESALER shall each retain ownership
of, and all right and, title and interest in and to, their respective pre-existing intellectual property.
WHOLESALER grants to State an unlimited, royalty-free, paid up, perpetual, non-exclusive,
irrevocable, non-transferable license to use and modify any pre-existing WHOLESALER
intellectual property, including marketing materials and materials contained in solicitation
responses provided by WHOLESALER to MMCAP or an MMCAP Member. The
aforementioned license is solely for use by MMCAP and MMCAP Members, and their agents
related to an internal business or governmental purposes.
13.4
Intellectual Property Warranty and Indemnification.
Except as otherwise set forth below,
WHOLESALER warrants that any materials, software or products produced by WHOLESALER
will not infringe upon or violate any patent, copyright, trade secret, or any other proprietary right
of any third party. In the event of any such claim by any third party against MMCAP, MMCAP
will promptly notify WHOLESALER. WHOLESALER, at its own expense, will indemnify; defend
to the extent permitted by the Minnesota Attorney General's Office, and hold harmless MMCAP
against any loss, cost, expense, or liability (including reasonable legal fees) arising out of such
a claim, whether or not such claim is successful against MMCAP.
13.4.1
If such a claim has occurred, or in the WHOLESALER's opinion is likely to occur, the
WHOLESALER will either procure for MMCAP the right to continue using the
materials or products or replacement or modified materials or products. If an option
satisfactory to MMCAP is not reasonably available, MMCAP will return the materials
or products to the WHOLESALER, upon written request of the WHOLESALER and at
the WHOLESALER’s expense. This remedy is in addition to any other remedy
provided by law.
13.4.2
In the event of a third party claim of infringement by any material, software or product
provided by WHOLESALER or utilized by WHOLESALER in the performance of this
Contract, but produced by a third party, WHOLESALER’s indemnification obligations
set forth in Section 13.4 shall apply to the extent that the third party’s indemnification
obligation to the WHOLESALER is available to MMCAP or WHOLESALER will assist
MMCAP in tender of such claim directly to the manufacturer of such material,
software or product.
MMCAP Contract No.: MMS15001
Page 6 of 14
14. Insurance Requirements
A. WHOLESALER shall not commence work under this Contract until they have obtained all the
insurance described below and MMCAP has approved such insurance. WHOLESALER shall
maintain such insurance in force and effect throughout the term of this Contract
B. WHOLESALER is required to maintain and furnish satisfactory evidence of the following
insurance policies:
1.
Workers’ Compensation Insurance:
Except as provided below, WHOLESALER must
provide Workers’ Compensation insurance for all its employees and, in case any work is
subcontracted, WHOLESALER will require the subcontractor to provide Workers’
Compensation insurance in accordance with the statutory requirements of the State of
Minnesota, including Coverage B, Employer’s Liability. Insurance
minimum
limits are as
follows:
$100,000 – Bodily Injury by Disease per employee
$500,000 – Bodily Injury by Disease aggregate
$100,000 – Bodily Injury by Accident
If Minnesota Statute 176.041 exempts WHOLESALER from Workers’ Compensation
insurance or if the WHOLESALER has no employees in the State of Minnesota,
WHOLESALER must provide a written statement, signed by an authorized representative,
indicating the qualifying exemption that excludes WHOLESALER from the Minnesota
Workers’ Compensation requirements.
If during the course of this Contract the WHOLESALER becomes eligible for Workers’
Compensation, the WHOLESALER must comply with the Workers’ Compensation Insurance
requirements herein and provide MMCAP with a certificate of insurance.
2.
Commercial General Liability Insurance:
WHOLESALER is required to maintain insurance
protecting it from claims for damages for bodily injury, including sickness or disease, death,
and for care and loss of services as well as from claims for property damage, including loss
of use which may arise from operations under this Contract whether the operations are by the
WHOLESALER or by a subcontractor or by anyone directly or indirectly employed by the
WHOLESALER under this Contract Insurance
minimum
limits are as follows:
$5,000,000 – per occurrence
$5,000,000 – annual aggregate
The following coverages shall be included:
Premises and Operations Bodily Injury and Property Damage
Personal and Advertising Injury
Blanket Contractual Liability
Other; if applicable, please list__________________________________
State of Minnesota named as an Additional Insured, to the extent permitted by law
3.
Products and Completed Operations Liability Insurance:
WHOLESALER is required to
maintain Products/Completed Operations Liability insurance. WHOLESALER may self-insure
or self-administer all or any portion of the required insurance, and to the extent
WHOLESALER does self-insure, such insurance will not be deemed to exceed the scope of
coverage and/or limits that would have been provided in an actual policy of insurance that
satisfies this insurance requirement. Insurance minimum limits are $5,000,000 annual
aggregate.
MMCAP Contract No.: MMS15001
Page 7 of 14
4.
Security and Privacy Liability Insurance
: Wholesaler is required to maintain Security and
Privacy Liability insurance, including coverage for failure to protect confidential information
and failure of the security of Wholesaler’s computer systems which results in unauthorized
access to MMCAP or MMCAP Member data. Wholesaler may self-insure and self-administer
all or any portion of the required Security and Privacy Liability Insurance.
$1,000,000 - per claim
$1,000,000 - annual aggregate
5.
Commercial Automobile Liability Insurance:
WHOLESALER is required to maintain
insurance protecting it from claims for damages for bodily injury as well as from claims for
property damage resulting from the ownership, operation, maintenance or use of all owned,
hired, and non-owned autos which may arise from operations under this Contract, and in
case any work is subcontracted WHOLESALER will require the subcontractor to maintain
Commercial Automobile Liability insurance. Insurance
minimum
limits are as follows:
$2,000,000 – per occurrence Combined Single limit for Bodily Injury and Property Damage
In addition, the following coverages should be included:
Owned, Hired, and Non-owned Automobile
C. Additional Insurance Conditions:
•
Any deductible will be the sole responsibility of WHOLESALER..
•
WHOLESALER’s policy(ies) shall be primary insurance to any other valid and collectible
insurance available to MMCAP with respect to any claim arising out of WHOLESALER’s
performance under this Contract;
•
If WHOLESALER receives a cancellation notice from an insurance carrier affording
coverage herein, WHOLESALER agrees to notify MMCAP within five (5) business days
with a copy of the cancellation notice, unless WHOLESALER’s policy(ies) contain a
provision that coverage afforded under the policy(ies) will not be cancelled without at
least thirty (30) days advance written notice to MMCAP;
•
WHOLESALER is responsible for payment of related insurance premiums and
deductibles;
•
If WHOLESALER is self-insured for Workers’ Compensation, a Certificate of Self-
Insurance must be attached;
•
WHOLESALER shall obtain insurance policy(ies) from insurance company(ies) having
an “AM BEST” rating of A- (minus); Financial Size Category (FSC) VII or better, and
authorized to do business in the State of Minnesota; and
•
An Umbrella or Excess Liability insurance policy may be used to supplement the
WHOLESALER’s policy limits to satisfy the full policy limits required by this Contract.
D. MMCAP reserves the right to immediately terminate this Contract if WHOLESALER is not in
compliance with the insurance requirements and retains all rights to pursue any legal remedies
against WHOLESALER.
E. The successful responder is required to submit Certificates of Insurance acceptable to MMCAP
as evidence of insurance coverage requirements prior to commencing work under this Contract.
MMCAP Contract No.: MMS15001
Page 8 of 14
15. Debarment by State, its departments, commissions, agencies, or political subdivisions
WHOLESALER certifies that neither it nor its principals is presently debarred or suspended by the
State, or any of its departments, commissions, agencies, or political subdivisions. WHOLESALER’s
certification is a material representation upon which this Contract award was based. WHOLESALER
shall provide prompt written notice to MMCAP’s Authorized Representative if at any time it learns that
this certification was erroneous when submitted or becomes erroneous by reason of changed
circumstances.
16. Certification regarding debarment, suspension, ineligibility, and voluntary exclusion
Federal money will be used or may potentially be used to pay for all or part of the work under this
Contract, therefore WHOLESALER certifies that it is in compliance with federal requirements on
debarment, suspension, ineligibility and voluntary exclusion specified in the solicitation document
implementing Executive Order 12549. WHOLESALER’s certification is a material representation upon
which this Contract award was based.
17. Publicity and endorsement
17.1
Publicity.
Any publicity regarding the subject matter of this Contract must identify MMCAP as
the sponsoring agency and must not be released without prior written approval from MMCAP’s
Authorized Representative. For purposes of this provision, publicity includes notices,
informational pamphlets, press releases, research, reports, signs, and similar public notices
prepared by or for the WHOLESALER individually or jointly with others, or any subcontractors,
with respect to the program, publications, or services provided resulting from this Contract.
17.2
Endorsement.
The WHOLESALER must not claim that MMCAP, the State of Minnesota, or any
Member State endorses its products or services, nor may MMCAP claim that the
WHOLESALER endorses its products or services.
18. Governing law, jurisdiction, and venue
Minnesota law, without regard to its choice-of-law provisions, governs this Contract. Venue for all
legal proceedings out of this Contract, or its breach, must be in the appropriate state court with
competent jurisdiction in Ramsey County, Minnesota. Except to the extent that the provisions of this
Contract are clearly inconsistent therewith, this Contract will be governed by the Minn. Stat. § 336,
the Uniform Commercial Code (UCC) as adopted by the State of Minnesota. Parties acknowledge
that the predominant purpose of this Contract is for the provision of goods.
19. Data disclosure
Under Minn. Stat. § 270C.65, subd. 3 and other applicable law, the WHOLESALER consents to
disclosure of its social security number, federal employer tax identification number, and/or Minnesota
tax identification number, already provided to the State, to federal and state agencies, and state
personnel involved in the payment of state obligations. These identification numbers may be used in
the enforcement of federal and state laws which could result in action requiring the WHOLESALER to
file state tax returns, pay delinquent state tax liabilities, if any, or pay other state liabilities.
20. Payment to subcontractors
To the extent applicable, pursuant to
Minn. Stat. § 16A.1245, the prime WHOLESALER must pay all
subcontractors, less any retainage, within 10 calendar days of the prime WHOLESALER's receipt of
payment from the State for undisputed services provided by the subcontractor(s) and must pay
interest at the rate of one and one-half percent per month or any part of a month to the
subcontractor(s) on any undisputed amount not paid on time to the subcontractor(s).
21. Termination
21.1
Termination by the State without cause.
The Commissioner of the Minnesota Department of
Administration may cancel this Contract at any time, without cause, upon 90 days’ written
MMCAP Contract No.: MMS15001
Page 9 of 14
notice to the WHOLESALER. Upon termination, the WHOLESALER will be entitled to payment,
determined on a pro rata basis, for services satisfactorily performed.
21.2
Termination for cause.
Either party may cancel this Contract at any time, for cause, upon no
less than ninety (90) days’ written notice to the other party. Upon notice of termination, the
noticed party shall have sixty (60) days to cure any defects.
21.3
Termination for insufficient funding.
MMCAP may immediately terminate this Contract if it
does not obtain funding from the Minnesota Legislature, or other funding source; or if funding
cannot be continued at a level sufficient to allow for the payment of the services covered here.
Termination must be by written or fax notice to the WHOLESALER. MMCAP is not obligated to
pay for any services that are provided after notice and effective date of termination. However,
the WHOLESALER will be entitled to payment, determined on a pro rata basis, for services
satisfactorily performed to the extent that funds are available. The State will not be assessed
any penalty if this Contract is terminated because of the decision of the Minnesota Legislature,
or other funding source, not to appropriate funds. MMCAP must provide the WHOLESALER
notice of the lack of funding within a reasonable time of MMCAP receiving that notice.
22.
Non-discrimination (In accordance with Minn. Stat. § 181.59)
The WHOLESALER will comply with the provisions of Minn. Stat. § 181.59 which require:
Every contract for or on behalf of the state of Minnesota, or any county, city, town,
township, school, school district, or any other district in the state, for materials,
supplies, or construction shall contain provisions by which WHOLESALER agrees: (1)
that, in the hiring of common or skilled labor for the performance of any work under any
contract, or any subcontract, no contractor, material supplier, or WHOLESALER, shall,
by reason of race, creed, or color, discriminate against the person or persons who are
citizens of the United States or resident aliens who are qualified and available to
perform the work to which the employment relates; (2) that no contractor, material
supplier, or WHOLESALER, shall, in any manner, discriminate against, or intimidate, or
prevent the employment of any person or persons identified in clause (1) of this section,
or on being hired, prevent, or conspire to prevent, the person or persons from the
performance of work under any contract on account of race, creed, or color; (3) that a
violation of this section is a misdemeanor; and (4) that this Contract may be canceled
or terminated by the state, county, city, town, school board, or any other person
authorized to grant the contracts for employment, and all money due, or to become due
under this Contract, may be forfeited for a second or any subsequent violation of the
terms or conditions of this Contract.
23. Affirmative action requirements for contracts in excess of $100,000 and if the WHOLESALER
has more than 40 full-time employees in Minnesota or its principal place of business
The State intends to carry out its responsibility for requiring affirmative action by its contractors.
23.1
Covered Contracts and Contractors.
If this Contract exceeds $100,000 and the
WHOLESALER employed more than 40 full-time employees on a single working day during the
previous 12 months in Minnesota or in the state where it has its principle place of business, then
the WHOLESALER must comply with the requirements of Minn. Stat. § 363A.36 and Minn. R.
5000.3400-5000.3600. A contractor covered by Minn. Stat. § 363A.36 because it employed
more than 40 full-time employees in another state and does not have a certificate of compliance,
must certify that it is in compliance with federal affirmative action requirements.
23.2
Minn. Stat. § 363A.36.
Minn. Stat. § 363A.36 requires the WHOLESALER to have an affirmative
action plan for the employment of minority persons, women, and qualified disabled individuals
approved by the Minnesota Commissioner of Human Rights (“Commissioner”) as indicated by a
certificate of compliance. The law addresses suspension or revocation of a certificate of
MMCAP Contract No.: MMS15001
Page 10 of 14
compliance and contract consequences in that event. A contract awarded without a certificate of
compliance may be voided.
23.3
Minn. R. 5000.3400-5000.3600.
(A)
General
. Minn. R. 5000.3400-5000.3600 implements Minn. Stat. § 363A.36. These rules
include, but are not limited to, criteria for contents, approval, and implementation of
affirmative action plans; procedures for issuing certificates of compliance and criteria for
determining a contractor’s compliance status; procedures for addressing deficiencies,
sanctions, and notice and hearing; annual compliance reports; procedures for compliance
review; and contract consequences for non-compliance. The specific criteria for approval or
rejection of an affirmative action plan are contained in various provisions of Minn. R.
5000.3400-5000.3600 including, but not limited to, Minn. R. 5000.3420-5000.3500 and
5000.3552-5000.3559.
(B)
Disabled Workers
. The WHOLESALER must comply with the following affirmative action
requirements for disabled workers.
(1) The WHOLESALER must not discriminate against any employee or applicant for
employment because of physical or mental disability in regard to any position for which
the employee or applicant for employment is qualified. The WHOLESALER agrees to
take affirmative action to employ, advance in employment, and otherwise treat qualified
disabled persons without discrimination based upon their physical or mental disability in
all employment practices such as the following: employment, upgrading, demotion or
transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of
compensation, and selection for training, including apprenticeship.
(2) The WHOLESALER agrees to comply with the rules and relevant orders of the
Minnesota Department of Human Rights issued pursuant to the Minnesota Human
Rights Act.
(3) In the event of the WHOLESALER's noncompliance with the requirements of this
clause, actions for noncompliance may be taken in accordance with Minn. Stat. §
363A.36, and the rules and relevant orders of the Minnesota Department of Human
Rights issued pursuant to the Minnesota Human Rights Act.
(4) The WHOLESALER agrees to post in conspicuous places, available to employees and
applicants for employment, notices in a form to be prescribed by the Commissioner.
Such notices must state the WHOLESALER's obligation under the law to take
affirmative action to employ and advance in employment qualified disabled employees
and applicants for employment, and the rights of applicants and employees.
(5) The WHOLESALER must notify each labor union or representative of workers with
which it has a collective bargaining agreement or other contract understanding, that the
Wholesaler is bound by the terms of Minn. Stat. § 363A.36, of the Minnesota Human
Rights Act and is committed to take affirmative action to employ and advance in
employment physically and mentally disabled persons.
(C)
Consequences
. The consequences for the WHOLESALER’s failure to implement its
affirmative action plan or make a good faith effort to do so include, but are not limited to,
suspension or revocation of a certificate of compliance by the Commissioner, refusal by the
Commissioner to approve subsequent plans, and termination of all or part of this Contract by
the Commissioner or the State.
(D)
Certification
. The WHOLESALER hereby certifies that it is in compliance with the
requirements of Minn. Stat. § 363A.36 and Minn. R. 5000.3400-5000.3600 and is aware of
the consequences for noncompliance.
24. E-Verify certification (In accordance with Minn. Stat. § 16C.075)
For services valued in excess of $50,000, WHOLESALER certifies that as of the date of services
performed on behalf of the State, WHOLESALER and all its subcontractors will have implemented or
be in the process of implementing the federal E-Verify Program for all newly hired employees in the
United States who will perform work on behalf of the State. WHOLESALER is responsible for
collecting all subcontractor certifications and may do so utilizing the
E-Verify Subcontractor
Certification Form
available at
http://www.mmd.admin.state.mn.us/doc/EverifySubCertForm.doc
. All
MMCAP Contract No.: MMS15001
Page 11 of 14
subcontractor certifications must be kept on file with WHOLESALER and made available to the State
upon request.
25. GPO Representation.
MMCAP represents and warrants that it is a “group purchasing organization”
as that term is defined under 42 C.F.R. Section 1001.952(j) and that it shall comply with all applicable
federal and state laws, rules and regulations, including, but not limited to, the provisions set forth in
42 U.S.C. Section 1320a-7b and the “safe harbor regulations” set forth in 42 C.F.R. Section
1001.952.
26. Contingency Fees Prohibited
. Pursuant to Minnesota Statutes § 10A.06, no person may act as or
employ a lobbyist for compensation that is dependent upon the result or outcome of any legislation or
administrative action.
27. Risk of Loss, Damage, and Shipping Terms.
Shipments under this Contract shall be FOB
Destination, freight prepaid and allowed, to the MMCAP Member’s receiving dock or pharmacy,
unless otherwise agreed to by the parties in writing. Title to and risk of loss of the products transfers
to the MMCAP Member upon delivery to the MMCAP Member, as set forth above.
28. Force Majeure.
Neither party hereto will be considered in default in the performance of its
obligations hereunder to the extent that performance of any such obligations is prevented or delayed
by acts of God, war, riot or other catastrophes beyond the reasonable control of the party. Force
majeure will not apply to the extent that the act or occurrence could have been reasonably foreseen
and reasonable action could have been taken to prevent the delay or failure to perform. A party
claiming excuse of performance under this provision must provide the other party prompt written
notice of the failure to perform, take commercially reasonable efforts to mitigate the damages caused
to all parties, and take all necessary steps to bring about performance as soon as practicable.
29. Default.
29.1
General.
In the event of default, MMCAP and the MMCAP Member reserve the right to
pursue any other remedy available by law. WHOLESALER may be removed from the
WHOLESALER’s list, suspended or debarred from receiving a Contract for failure to comply
with terms and conditions of this Contract.
29.2
Failure to Perform.
Upon failure to perform the following services in the time and manner as
set forth herein, the following fees shall be paid by WHOLESALER:
29.2.1
Bid Roll.
MMCAP will notify Wholesaler within 30 days after manufacturer bid roll of
any MMCAP Contract Products not loaded, stocked, and viewable by all MMCAP
Members, consistent with process identified within Attachment A. 4.5. B. In the event
that an MMCAP Contract Product(s) is not loaded, stocked, and viewable by all
MMCAP Members when the new manufacturer contracts are in effect and have been
received from the manufacturer(s), WHOLESALER shall pay the following fee to
MMCAP: $2,500/day, until resolved, not to exceed $25,000 per bid roll cycle.
29.2.2
Reports
In the event that any report and/or data provided by the WHOLESALER,
pursuant to the terms of this Contract, is not received according to schedule, contains
incorrect data, incomplete data, or no data, and is more than a minor defect or
causes harm to MMCAP’s ability to conduct business or its governmental purpose,
Wholesaler will be allowed a 3 business day cure period, or WHOLESALER shall pay
the following fee to MMCAP: $500/day, not to exceed $5,000 per reporting instance,
until resolved.
29.2.3
Inventory Management and Management of MMCAP Contract Products.
If an MMCAP Contract Product is not loaded, stocked, and viewable by all MMCAP
Members, as required pursuant to this Contract and within the timelines set forth
herein, WHOLESALER shall credit to the MMCAP Member submitting the request an
amount equal to two and one-half percent (2.5%) of such MMCAP Member’s
MMCAP Contract No.: MMS15001
Page 12 of 14
previous month’s net purchases of the generically equivalent item in the same
packaging size. WHOLESALER shall credit to the MMCAP Member within thirty (30)
calendar days of the MMCAP Member’s original request to stock the MMCAP
Contract Product. WHOLESALER will be responsible for Inventory Management and
Management of MMCAP Contract Products Failure to Perform claims for 90 calendar
days from the date the Wholesaler is first unable to supply the Product to an MMCAP
Member. This clause shall not apply when the Failure to Perform claim is attributable
to a cause outside WHOLESALER’s control, or where the alternative product
purchased is a WHOLESALER Generic Drug Program product, so long as
WHOLESALER is acting in good faith to stock the MMCAP Contract Product.
29.2.4
Delivery Delays.
Deliveries shall be made by the WHOLESALER in accordance with
the time schedules specified in Attachment A, or as otherwise agreed upon by the
WHOLESALER and MMCAP Member. Where delivery is delayed, WHOLESALER
shall credit to the Member a fee of forty five dollars ($45.00) per delivery not delivered
within 90 minutes of the delivery time scheduled, and for each day the delivery is not
received, payable as a credit to the Member within fourteen (14) calendar days of the
original delivery date. WHOLESALER shall not be responsible for paying the
aforementioned fee for delays outside of its control, and where notification of the
experienced delivery delay is not provided to the Wholesaler within 30 days of the
event.
29.2.5
Invoices.
Where WHOLESALER submits a current and/or subsequent invoice for any
fees not related directly to Product cost or not specified in Attachment B,
WHOLESALER shall reference the original invoice number or purchase order number.
Should the WHOLESALER inappropriately charge a fee not related directly to Product
cost or a fee not specified in Attachment B, Wholesaler shall credit the inappropriately
charged amount back to the MMCAP Member. There is no annual limitation attached
to the recovery of fees inappropriately charged that are not related directly to Product
cost or not specified in Attachment B, Wholesaler will provide a monthly report to
MMCAP of any miscellaneous fees charged to MMCAP Members which are not
related directly to Product cost or not specified in Attachment B.
29.2.6
Application of Fees.
The application of fees herein shall not excuse
WHOLESALER’s performance obligations as set forth in this agreement, nor shall it
waive any rights of MMCAP or MMCAP Members to seek any and all available legal
and equitable remedies.
29.2.7
Acknowledgement.
WHOLESALER acknowledges that the fees set forth above are
not penalties, but rather seek to make MMCAP and MMCAP Members whole for any
failure of performance by the WHOLESALER, as based upon good faith estimates as
agreed to by the parties.
30. Severability.
If any provision of this Contract, including items incorporated by reference, is found to
be illegal, unenforceable, or void, then both MMCAP and the WHOLESALER will be relieved of all
obligations arising under such provisions. If the remainder of this Contract is capable of performance,
it will not be affected by such declaration or finding, and will be fully performed.
31. Dispute Resolution.
WHOLESALER and MMCAP Members will handle dispute resolution for
unresolved issues using the following procedure.
31.1
Notification.
Parties shall promptly notify each other of any known dispute and work in good
faith to resolve such dispute within a reasonable period of time.
31.2
Documentation.
Both the MMCAP Member and the WHOLESALER will jointly develop a short
briefing document that describes the issue(s), relevant impact, and positions of both parties.
The briefing document must be sent by the WHOLESALER to MMCAP, the MMCAP Member,
and the WHOLESALER’s MMCAP Primary Account Representative.
MMCAP Contract No.: MMS15001
Page 13 of 14
31.3
Escalation.
If parties are unable to resolve the issue in a timely manner, as specified above,
either the MMCAP Member or WHOLESALER may escalate the resolution of the issue to a
higher level of management. Where escalation of the issue proves ineffective, either party may
contact MMCAP and/or the WHOLESALER’s MMCAP Representative for further resolution.
When escalated to MMCAP, a teleconference will be scheduled with MMCAP and the
WHOLESALER’s MMCAP Primary Account Representative to review the briefing document
and develop a proposed resolution and plan of action. The plan and timeline must be agreed to
by all parties – MMCAP, the MMCAP Member, and WHOLESALER.
31.4
Performance while Dispute is Pending.
Notwithstanding the existence of a dispute the
WHOLESALER must continue without delay to carry out all of their responsibilities under this
Contract that are not affected by the dispute. If the WHOLESALER fails to continue without
delay to perform its responsibilities under this Contract, in the accomplishment of all undisputed
work, any additional costs incurred by MMCAP and/or MMCAP members as a result of such
failure to proceed shall be borne by the WHOLESALER.
31.5
Member Rights.
In the event an MMCAP Member cannot resolve a dispute with the
WHOLESALER, and the MMCAP Member has worked with MMCAP to resolve the dispute, the
MMCAP Member(s) may change its prime Wholesaler even if the rest of the MMCAP Member
state does not wish to change its wholesaler.
31.6
No Waiver.
This clause shall in no way limit or waive either party’s right to seek available legal
or equitable remedies.
32. Adding New Members.
If new states are added as MMCAP Members and opt to participate in this
Contract, the new MMCAP Member state will select a wholesaler to service the MMCAP Members.
In the event one or more of said facilities are currently using another MMCAP-contracted wholesaler,
said facility will be allowed to choose if it will transition to WHOLESALER.
33. Required Licenses, Permits, and Registration
. WHOLESALER shall have in place prior to the
start of this Contract, and must maintain for the life of this Contract, all current licenses, permits and
registrations required by state, local and federal agencies. WHOLESALER must make such
documentation available upon request by MMCAP.
34. DEA License/HIN.
WHOLESALER shall not require an MMCAP Member to have a DEA number in
order to obtain products unless making orders for controlled substances. MMCAP Member facilities
will have HIN numbers assigned by MMCAP.
35. Personnel Changes.
WHOLESALER shall notify MMCAP of changes in the Wholesaler’s key
personnel, in advance and in writing. Any employee of Wholesaler, who, in the opinion of MMCAP, is
unacceptable, will be removed from the project upon written notice to the Wholesaler; provided,
however, any such removal must be for lawful reasons. In the event that an employee is removed
pursuant to a written request from MMCAP’s authorized representative, the Wholesaler will have ten
(10) working days in which to fill the role with an acceptable employee.
36. State Terms and Participation.
36.1 WHOLESALER may be required to prepare an MMCAP “Member-requested Participation
Agreement” (“MPA”), which is attached and incorporated as Attachment E, to amend this
Contract to provide for laws specific to a state or local jurisdiction. If these circumstances exist,
WHOLESALER must work with MMCAP and the MMCAP Member to prepare the MPA. An
MPA must clearly apply only to the requesting location and will not affect the rights of the other
MMCAP Members, nor will it modify, derogate, or otherwise diminish the rights and obligations
set forth herein, except in regard to the applicable named MMCAP Member. No verbal or
written instructions from MMCAP Members, or any of their staff or officials may be used to
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
1
Attachment A – Scope of Work ................................................................................................................ 4
4.1 Definitions .................................................................................................................................... 4
4.2 Service Area .................................................................................................................................. 6
4.3 Customer Service .......................................................................................................................... 6
A.
Customer Service to MMCAP
.......................................................................................... 6
B.
Customer Service to MMCAP Participating Facilities
.................................................. 8
4.4 Contract Transition and Implementation .................................................................................... 10
4.5 Inventory Management ............................................................................................................... 12
A.
MMCAP-Contracted Manufacturers
............................................................................ 12
B.
Bid-Roll
............................................................................................................................. 12
C.
MMCAP Contract Products
........................................................................................... 12
D.
Special Orders
.................................................................................................................. 13
E.
Wholesaler Created Stock Outages
................................................................................ 14
F.
Manufacturer Backorders
.............................................................................................. 18
G.
Service Levels
................................................................................................................... 19
H.
Shift Demands
.................................................................................................................. 20
4.6 Management of MMCAP Contract Products ............................................................................. 21
A.
Price Loading and Pricing Accuracy
............................................................................. 21
B.
Product Additions/Deletions
........................................................................................... 21
C.
Convenience and Individual Contracts
......................................................................... 21
D.
Product Expiration Dating
.............................................................................................. 22
4.7 Ordering Equipment ................................................................................................................... 22
A.
Ordering System
.............................................................................................................. 22
B.
Hardware, Software, and Devices
.................................................................................. 23
C.
Installation and Training
................................................................................................ 23
D.
Inventory at an MMCAP Participating Facility
........................................................... 24
E.
Ordering System(s) Back-up Service, Maintenance and Repair
................................. 24
F.
Label and Marking
.......................................................................................................... 25
4.8 Order Placement ......................................................................................................................... 25
A.
Wholesaler’s Ordering System(s)
................................................................................... 25
B.
Automatic Substitution
................................................................................................... 26
C.
Confirmation Printback/Order Confirmation
.............................................................. 26
D.
Controlled Substances Ordering System
....................................................................... 26
E.
Technical Support for Ordering
..................................................................................... 27
F.
340B Drug Pricing Program
........................................................................................... 27
4.9 Delivery ...................................................................................................................................... 27
A.
Routine Delivery
.............................................................................................................. 27
B.
Drop Shipments
............................................................................................................... 28
C.
Delivery for Special Products
......................................................................................... 29
D.
Delivery of Bulky Items.
.................................................................................................. 29
E.
Emergency Order, Placement and Delivery
.................................................................. 29
4.10 Pedigree .................................................................................................................................... 30
4.11 Contract Compliance ................................................................................................................ 30
A.
On-Contract Purchasing
................................................................................................. 30
B.
Compliance Calculations
................................................................................................. 30
C.
Reporting Tools
................................................................................................................ 31
4.12 Invoicing ................................................................................................................................... 32
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
2
A.
Order Invoice
................................................................................................................... 32
B.
Invoice Rounding
............................................................................................................. 34
C.
Credits and Rebills
.......................................................................................................... 34
D.
Price Audits and Corrections
......................................................................................... 35
E.
Chargeback Denials
......................................................................................................... 35
F.
Invoice Disputes
............................................................................................................... 35
G.
810 EDI Invoices and Auditing
....................................................................................... 36
H.
Goods Returned to the Wholesaler
................................................................................ 36
I.
Recalls
............................................................................................................................... 36
4.13 Purchase Orders and Payment .................................................................................................. 37
A. Purchase Orders
.............................................................................................................. 37
B. Payments by MMCAP Participating Facility
................................................................ 37
C. Verification of Authorized Purchasers
.......................................................................... 37
D. Funds available and authorized/non-appropriation
..................................................... 37
E. Termination of Individual Purchase Orders
................................................................. 37
F. Jurisdiction and Venue
.................................................................................................... 38
G. Late Payment
................................................................................................................... 38
4.14 Administrative Fee .................................................................................................................... 38
4.15 MMCAP Service Contracts ...................................................................................................... 39
A.
Contract Price Auditing
.................................................................................................. 39
B.
Reverse Distribution Processor
...................................................................................... 39
C.
Repackaging Services
...................................................................................................... 39
D.
Influenza Vaccine/Medical Supplies.
............................................................................. 40
4.16 Other Value-Added Services .................................................................................................... 40
A.
Wholesaler’s Generic Drug Program
............................................................................ 40
B.
MMCAP Participating Facility Negotiated Contracts
................................................. 42
C.
Pharmacy Interfaces
........................................................................................................ 42
D.
Business Development
..................................................................................................... 42
E.
Supplemental/Additional Services
................................................................................. 43
4.17 Business Interruption Plan ........................................................................................................ 43
4.18 Shareback Credits ..................................................................................................................... 43
4.19 Mandatory Reports ................................................................................................................... 44
1.
Reports provided to MMCAP:
....................................................................................... 44
A.
Sales Data Report
............................................................................................................ 44
B.
Monthly Payment Report
................................................................................................ 47
C.
Kill/Fill Report
................................................................................................................. 49
D.
Contract Change Report
................................................................................................. 50
E.
Contract File Audit Report
............................................................................................. 50
F.
Off-Contract with Alternative On-Contract Report
.................................................... 51
G.
Raw and Adjusted Fill Rate Report
............................................................................... 52
H.
Wholesaler Participating Facility Listing
...................................................................... 52
I.
Manufacturer Backorders
.............................................................................................. 53
J.
Discontinued Product Report.
........................................................................................ 53
K.
Service Level Report.
....................................................................................................... 54
L.
Service Fee Discount Report.
.......................................................................................... 54
M.
MMCAP Participating Facility Credit Report
............................................................. 55
N.
Miscellaneous Fees Charged to MMCAP Participating Facilities
.............................. 55
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
3
2.
MMCAP Member Reporting:
........................................................................................ 55
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
4
Attachment A – Scope of Work
4.1 Definitions
Throughout this Contract, the following terms are used as defined.
340B Drug Pricing Program (340B)
- The 340B Drug Pricing Program resulted from enactment of Public
Law 102-585, the Veterans Health Care Act of 1992, which is codified as Section 340B of the Public Health
Service Act. Section 340B limits the cost of covered outpatient drugs to certain federal grantees, federally-
qualified health center look-alikes and qualified disproportionate share hospitals (DSH). Several MMCAP
Participating Facilities are eligible and participate in the 340B Drug Pricing Program.
Adequate Supply
- A supply of Products made available to the MMCAP Participating Facilities that allow
conformity with the parameters of the fill rate and historical purchase patterns.
Bulky Products
- The MMCAP Office’s definition of Bulky Products include food and food products, home
healthcare products (durable medical equipment, such as walking aids, bathroom safety products,
wheelchairs and accessories, scooters and lift chairs, etc.), non-contract nutritionals, school and office
supplies, non-contract large volume parenterals, and non-contract IV Fluids.
Closed Distribution Products (CDP)
- Closed Distribution is either required by the manufacturer or by the
FDA. Reasons for the Closed Distribution of a product include patient safety, product stability, or the
product is new to the market. Most orders for Closed Distribution Products are passed through the
Wholesaler for delivery directly by the product supplier.
Confirmation Printback/Order Confirmation
- An electronic confirmation report generated from the
Wholesaler’s ordering system(s), meaning both Cardinal.com and Order Express and sent electronically
back to the ordering facility indicating that the requested Products are available, on Manufacturer
Backorder, out of stock, or deleted, etc. Also referred to as the Confirmation Printback Report.
Controlled Substance Ordering System (CSOS)
- Allows for secure electronic transmission of Schedule I-V
controlled substance orders without the supporting paper DEA Form 222.
Drop Shipment(s)
- Products ordered by the MMCAP Participating Facilities through the Wholesaler and
shipped directly to the MMCAP Participating Facilities from the manufacturer/product supplier. The
manufacturer/product supplier notifies and bills the Wholesaler, who then invoices and receives payment
from the MMCAP Participating Facility.
EDI
- Electronic Data Interchange - Inter-process (computer to computer application) communication of
business information in a standardized electronic form.
Manufacturer Backorder(s) (MBO)
- An order placed by the Wholesaler to a manufacturer or supplier which
is not shipped to the Wholesaler due to industry wide shortages or other supply issues as set forth in Section
4.5 (E.) of Attachment A.
MMCAP Contract Product(s)
- Any Product that appears on an MMCAP contract.
MMCAP Contract File Updates
– electronic files sent by the MMCAP Office to the Wholesaler which
provide batched MMCAP Contract Product and MMCAP contract pricing information. The MMCAP
Contract File Updates are usually sent to the Wholesaler on a weekly basis. The first file (titled “Update
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
5
[sequential number]”) details the MMCAP contract changes that have occurred since the last weekly
communication from the MMCAP Office. The second file (titled “[sequential number] Contract [8-digit
date]”) is a listing of the entire MMCAP contract as of the date provided in the title. The third file (titled
“[sequential number] Pending [8-digit date]”) is a listing of the MMCAP Contract Products with future
effective dates.
MMCAP Member(s)
– Any of the, currently, 48 MMCAP member states plus the Cities of Chicago and Los
Angeles and any other members added or deleted during the life of the Contract and any extensions.
MMCAP Members shall be considered intended third-party beneficiaries of this Contract.
MMCAP Participating Facility
- Any facility listed by the MMCAP Office as an active participant of
MMCAP program. A current listing of MMCAP Facilities is made available to all MMCAP vendors
monthly. MMCAP Participating Facilities shall be considered intended third-party beneficiaries of this
Contract.
Both
MMCAP Member(s)
and
MMCAP Participating Facility
may be referenced as “MMCAP Member(s)”,
when applicable throughout the Scope of Work.
MMCAP Office
– The administrative staff of the MMCAP Program responsible for initiating and
administering all MMCAP contracts. The MMCAP Office may be referred to synonymously as MMCAP.
Located at:
MMCAP
Minnesota Department of Administration
Materials Management Division
112 Administration Building
50 Sherburne Avenue
St. Paul, MN 55155
MMCAP State Contacts
– purchasing and pharmacy professionals are designated by MMCAP Member
States to serve as liaisons between the MMCAP Office and the MMCAP Participating Facilities in each
State. A list of MMCAP State Contacts is available at:
http://www.mmd.admin.state.mn.us/mmcap/background_current_states.htm.
National Drug Code (NDC) –
a unique 11-digit number which is a universal product identifier for human
drugs. The NDC identifies the labeler code, product code (strength, dosage form, and formulation), and
package code (package size and type). All NDCs reported to the MMCAP Office must be in the 5-4-2
configuration.
Next Day Delivery
- Orders placed Sunday through Thursday by MMCAP Participating Facilities by the
designated time as proposed by the Wholesaler which will be delivered the next business day. Orders
placed on Friday or Saturday must be delivered on the following Monday.
Next Scheduled Delivery Day
- is the day agreed upon by the Wholesaler and the MMCAP Participating
Facility for delivery of Products. For some MMCAP Participating Facilities, the Next Scheduled Delivery
Day may not necessarily denote that the delivery will be made within 24 hours.
Non-Contract Product
- Any product that does not appear on an MMCAP contract or the 340B Drug Pricing
Program contract.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
6
Pedigree
- A record containing information regarding each transaction resulting in a change of ownership of
a given medication, from sale by a manufacturer, through acquisition and sale by one or more wholesalers,
manufacturers, or pharmacies, until final sale to a pharmacy or other person furnishing, administering, or
dispensing the medication.
Product(s)
- Synonymously used to denote the merchandise requested by the MMCAP Participating
Facilities to be delivered through the Wholesaler.
Stock Outage(s)
- An occurrence wherein the Wholesaler cannot make available an Adequate Supply of the
MMCAP Participating Facility’s requested Products. As opposed to a MBO situation, the Wholesaler will
be held responsible for Stock Outages.
Wholesaler
- Also referred to as Vendor, Pharmaceutical Prime Vendor, or Prime Vendor, is a business that
functions as a purchaser’s source of distribution for a wide array of pharmaceutical and related Products as
identified by the MMCAP Participating Facility. A Wholesaler is responsible for maintaining and
distributing an Adequate Supply of pharmaceuticals and related Products and any other items contracted for
that are dispensed through the MMCAP Participating Facilities’ pharmacy service.
4.2 Service Area
As of the Contract effective date, Wholesaler will provide the full range of contracted services under this
Contract to all requesting MMCAP Participating Facilities and/or MMCAP Members. Unless approved by
MMCAP in writing, Wholesaler must provide services to all MMCAP Participating Facilities within a state
(not partial service coverage), subject to the requirements of Section 4.4. The MMCAP Office (represented
by the term MMCAP) reserves the right to add or delete MMCAP Members at any time during the Contract
term.
Wholesaler will provide service to the MMCAP Members specified in an amendment.
4.3 Customer Service
A.
Customer Service to MMCAP
The Wholesaler will designate an Account Management Team for MMCAP. The assigned Account
Management Team will have the depth of experience needed to serve in a solution- oriented role. The
principal resources identified by the Wholesaler are confirmed as to having the authority to make decisions
on behalf of the Wholesaler and to be empowered to provide accountability. The Account Management
Team will be staffed with qualified resources along with additional resources to provide sufficient back-up
support in the event that the principal resources become unavailable.
1.
The Wholesaler’s designated Primary Account Representatives for MMCAP will be Lisa Penn, Director
State Government,
lisa.penn@cardinalhealth.com
, 614- 553-3604 and Clay Miller, Manager State
Government,
clay.miller@cardinalhealth.com
, 614- 757-6763.
2.
Additional functional contacts are:
a. Contract issues/discrepancies (product stocking, product loading, pricing):
Tiffany Kuhel, Consultant
tiffany.kuhel@cardinalhealth.com
, 614-757-7528.
b. Class of trade issues (contract eligibility, denials, etc.):
Tiffany Kuhel, Consultant
tiffany.kuhel@cardinalhealth.com
, 614-757-7528.
c. Issues concerning MMCAP’s invoice auditing service:
Tiffany Kuhel, Consultant
tiffany.kuhel@cardinalhealth.com
, 614-757-7528.
d. Wholesaler distribution service fees:
Clay Miller, Manager State Government,
clay.miller@cardinalhealth.com
, 614- 757-6763
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
7
e. Data/reporting issues and Shareback fee process:
Alex Fox, Senior Analyst,
alex.fox@cardinalhealth.com
, 614-757-9449.
f. Electronic invoice auditing dispute resolution:
Tiffany Kuhel, Consultant
tiffany.kuhel@cardinalhealth.com
, 614-757-7528.
g. Service fee /cost of goods discounts:
Regional Leaders and Senior Specialists will be responsible for any service fee discount inquiries
specific to their assigned member states. Any escalated inquiries surrounding service fee/cost of goods
discounts should be directed to Clay Miller, Manager State Government,
clay.miller@cardinalhealth.com
, 614- 757-6763
.
h. Accounts receivable:
Michelle Janlin, Collections Manager,
michelle.janlin@cardinalhealth.com
, 614-822-4135
i. Accounts Payable:
Lauren Payne, Finance Operations Manager,
lauren.payne@cardinalhealth.com
614-652-1465
3.
In the event the MMCAP determines the Primary Account Representative is non-responsive, MMCAP
will escalate to Don Lyle, VP Account Management State Government,
Don.Lyle@cardinalhealth.com
,
614-757-7782, to take appropriate corrective action for problem resolution.
4.
The Wholesaler must provide advanced written notification to MMCAP of changes in the Wholesaler’s
key administrative personnel. Any employee of Wholesaler, who, in the sole opinion of MMCAP, is
unacceptable, will be removed from the project upon written notice to the Wholesaler, provided such
removal is for lawful reasons. In the event that an employee is removed pursuant to a written request
from MMCAP’s authorized representative, the Wholesaler will have ten (10) business days in which to
fill the vacancy with an acceptable employee. There will be no charge to MMCAP or the MMCAP
Members for replacement personnel assigned and Wholesaler agrees that each such replacement has
acquired the necessary orientation and background to make a productive contribution.
5.
Business Review
a.
Wholesaler will hold monthly business reviews at MMCAP’s office with the Wholesale’s
Primary Account Representative(s), as deemed necessary by MMCAP’s Wholesaler
Distribution Services Coordinator.
b.
Wholesaler will hold quarterly business reviews at MMCAP’s office with the Wholesaler’s
Primary Account Representative(s) and others from the Wholesaler’s Corporate Office to
address, at a minimum, the following:
•
Sales Data
•
Contract Financials (discounts, fees, cost of goods, etc.)
•
Contract Compliance/Category Breakdown
•
Inflationary/Budget Related Data
•
Managed Care News/Updates
•
Service Levels by distribution center, by MMCAP Members (state and facility), and for
MMCAP as a group
•
Contract Activity
•
Success Stories and Opportunities Ongoing.
•
Pedigree Updates
•
Any federal and/or state legislation affecting MMCAP Members and/or the
pharmaceutical industry
•
Proactive Product Information
•
Pharmaceutical distribution impacts and trends; pharmaceutical industry updates
•
Contract Activity Reporting
•
Compliance Activity Reporting
•
Purchase Activity Reporting
•
EDI Setup Audits
•
Customer Satisfaction
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
8
•
Relevant current and planned initiatives, both of MMCAP and the Wholesaler, and any
associated action plans
•
Wholesaler Performance
6.
Wholesaler and MMCAP agree to conduct a complete contract review no later than March 31, 2015 to
determine areas of non-compliance from both parties. This review will be done annually, with the due
date tied to the anniversary date of the effective date of the Contract.
B.
Customer Service to MMCAP Participating Facilities
1.
Customer Service Department
Wholesaler will provide the MMCAP Participating Facilities access to the Wholesaler’s customer
service department, which at a minimum, consists of the following:
a.
Customer support centralized in two national call centers located in Radcliff, Kentucky and Little
Rock, Arkansas.
b.
Cardinal Health’s overseas call center may be used only for business continuity situations, unless
approved in writing by MMCAP. Cardinal Health will provide prompt notice of any overseas call
center use and will provide a monthly report to MMCAP detailing the number of calls going to the
overseas call center.
c.
Access to customer service representatives with principal responsibilities in the areas of order
entry, Drop Shipment ordering, stocking issues, and general customer service requests.
d.
Customer service hours of operation are 7:30 a.m. – 8:00 p.m. (Eastern Standard Time) Monday
through Friday (excluding the following national holidays: Christmas, New Years Day,
Thanksgiving Day, Memorial Day, the Fourth of July, and Labor Day).
e.
Wholesaler’s customer service can be reached toll free at 866-641-1199, by fax at 866-551-0530,
or by e-mail at
GMB-P_SPL_V_GOV@cardinalhealth.com
.
f.
Technical support is available 24 hours a day, 7 days a week. Technical support for
Cardinal.com/Order Express can be reached toll free by calling 800-326-6457.
g.
Customers may use
Wholesaler’s TeleServe (866.958.2200) ordering/stock check application.
TeleServe is available 24 hours a day/7 days a week. Customers can use this valuable tool to place
orders for products, check stock status/item availability, and receive real-time confirmation of
product allocation. TeleServe allows purchasers to perform these functions hands-free through the
voice-activated feature.
h.
Emergency Call Procedures are for life critical emergency situations only that require product
before the Next Scheduled Delivery Day:
Emergency Call Procedure for the Fastest Response
1).
During normal business hours (Monday-Friday 7:30 am to 8:00 pm Eastern Standard Time),
call customer service at 866-641-1199.
2).
Outside normal business hours, please call 877-772-0346. An answering service
representative will take the message and a Cardinal Health employee will promptly return the
call. MMCAP Participating Facilities will need to provide their servicing distribution center
name, account name and number, a contact name, and a call back phone number available.
2.
MMCAP Members’ Customer Account Representatives
a.
MMCAP State Contacts
.
Each MMCAP State Contact will have a designated account
management Regional Leader appointed by the Wholesaler’s Primary Account Manager to meet
with both MMCAP Field Services representative, where regionally available, and MMCAP State
Contact and other state representatives on a quarterly basis to discuss, at a minimum, the following:
•
Customer satisfaction
•
Wholesaler performance
•
State account performance (COGs, payment terms, etc.)
•
Reports (e.g., contract compliance)
•
Other
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
9
b.
MMCAP Participating Facilities
.
Wholesaler will provide an account management Regional
Leader for each MMCAP Participating Facility with average volume of $25,000 per month or
more. This individual will serve as a liaison between the MMCAP Participating Facility and
Wholesaler, managing the working and strategic relationship to ensure quality of service delivery
and customer satisfaction. In managing the relationship, the assigned Regional Leader will utilize
various relationship management contact options, including the MMCAP Field Services
representatives whenever possible, dependent upon the needs of the MMCAP Participating
Facilities. Dedicated Senior Specialists are assigned to support the Regional Leaders and will also
have individual account management responsibilities for those MMCAP Participating Facilities
with an average volume of less than $25,000 per month. The Regional Leader will make routine
on-site visits to discuss performance issues and solve problems according to the schedule below:
Average Monthly
Purchasing Volume
Frequency of Contact with MMCAP
Participating Facility
Type of Contact
$0 - $25,000
Dialogue with MMCAP Participating Facility once
every 30 calendar days unless otherwise requested
by the MMCAP Participating Facility
Telephone Call
Onsite visits available upon
reasonable request
$25,001 – and up
1. Customer Business Reviews offered quarterly.
2. Dialogue with MMCAP Participating Facilities
once every 30 calendar days or as needed
1. On-site visit or Telephone Call
2. On-site visit or Telephone Call
State Purchasing
Contact
Dialogue offered monthly or as desired by State
Purchasing Contact. State contacts are to be
included in quarterly Member Customer Business
Reviews desired.
On-site visit or telephone call
c.
Additional Resources
.
Wholesaler will provide adequate staffing resources for both field
operations to provide direct service for the MMCAP Members and corporate operations to assist
MMCAP. These resources will provide facility targeted approaches to solve specific problems and
determining solutions for operational, contract compliance and inventory management issues.
Designated resources may fluctuate up or down depending on volume and business need.
d.
The Wholesaler will make its best efforts to notify MMCAP at least ten (10) business days in
advance of any meeting between the Wholesaler, any MMCAP State Contact, and/or MMCAP
Participating Facility, and any potential MMCAP State Contact or MMCAP Participating Facility
when the meeting topics will address issues beyond standard operation issues including but not
limited to requests for proposal, legislative activities concerning any products or services covered
by this Contract, or expansion of the Wholesaler’s presence in that organization or state. If
MMCAP is not an attendee at the meeting, the Wholesaler agrees to provide a detailed account of
the meeting to MMCAP and will make its best efforts to provide this information no later than five
(5) business days after the meeting.
3.
MMCAP State Contacts and MMCAP Participating Facility Satisfaction Survey
Wholesaler will solicit an MMCAP pre-approved, annual survey with all MMCAP State Contacts and a
representative random sample of MMCAP Participating Facilities. The goal is an overall average
survey score of 3.5 out of 5 points. The Wholesaler will share the raw survey responses for those
survey areas that score below 3.5 and will devise an action plan(s) to address deficiencies, presenting
status updates at quarterly Executive Business Reviews, or more frequent as appropriate.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
10
4.4 Contract Transition and Implementation
If the MMCAP Member is currently contracting with the Wholesaler for the services, or substantially similar
services, as set forth in this Attachment A, Wholesaler will transition each MMCAP Member from the existing
contract (and existing contract terms) to this Contract (and its terms) on the 1st day of the month following
execution of this Contract and in no event later than 30 days from Contract execution.
If the MMCAP Member is not currently contracting with the Wholesaler for the services or substantially similar
services, as set forth in Attachment A, Wholesaler shall implement this contract (and its terms) for the MMCAP
Member on the 1st day of the third month following execution of this Contract and in no event later than 90
days from Contract execution.
Transition from an existing contract to this Contract must occur on the 1
st
day of a month, and no other day.
In completing this transition, Wholesaler shall work with MMCAP Staff and MMCAP Participating Facilities to
determine the appropriate steps and schedule, subject to the above, for the transition. Wholesaler acknowledges
that the transition may be dependent upon the terms of the existing contracts and subject to the notice provisions
contained therein. MMCAP and MMCAP Participating Facilities acknowledge that the transition is dependent
on Wholesaler receiving all documentation from the MMCAP Participating Facility required for account set-
ups. This plan will detail the phase-in of the Wholesaler’s operations at the MMCAP Member with a 100%
operating level at the onset of the contract effective date.
Satisfaction of a 100% operating level will include:
a.
Installation and testing of all electronic ordering equipment
b.
Training of employees
c.
Bar coding and shelf labeling
d.
Price loading of all MMCAP contract products
e.
Wholesaler’s internal inventory preparation and distribution system, based on current MMCAP
Participating Facilities’ sales and usage data
f.
Wholesaler’s plan to ensure that stocking and chargeback agreements are in place with all
MMCAP-contracted vendors
Wholesaler’s standard procedure for implementing a new MMCAP Participating Facility is:
Week 1
Wholesaler Distribution Services Contract Signed
Provide 12 months detailed usage from MMCAP to Wholesaler
Provide site listing from MMCAP to Wholesaler
Communicate conversion team contact listing and schedule calls
Fax/email/mail DEA and state pharmacy licenses
Obtain MMCAP roster and confirm eligibility
Assess customer technology requirements and begin pre-work
Review customer attributes, needs, and expectations
Obtain digital certificate for CSOS
Week 2
Assess customer needs for product catalogs
Establish delivery plan, times, and requirements
Review DC/Customer-Specific Order Cut-Off Time
Load usage, activate/create items, and place orders
Continue ordering pre-work (EDI, cardinal.com or Order Express, etc)
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
11
Complete account set-up and provide account numbers
Week 3
Delivery route set-ups with couriers are completed
Technology work completed and tested
Create electronic version of new customer Welcome Kits
Confirm pricing eligibility and attach contracts to sites
Create new reports as necessary
Week 4
Send new customer Welcome Kits to each site
Complete site training for Cardinal.com or Order Express, etc
Send CII blanks, product catalogs, hardware, etc. in tote as test order
Outbound calls to each site as follow-up on test delivery and site visit
Confirm Product is received and ready for day-1 orders
Week 5
Send New customer Welcome Kits to each site
Complete site training for Cardinal.com or Order Express, etc
Send CII blanks, Product catalogs, hardware, etc. in tote as test order
Outbound calls to each site as follow-up on test delivery and site visit
Confirm Product is received and ready for Day-1 orders
Request corporate contacts to complete customer survey
Week 6
Schedule post-implementation review
Schedule Business Review meeting
Wholesaler will be responsible for notifying both new and existing MMCAP Participating Facilities in writing
specifying Wholesaler required documentation and instructions sufficient to enable the MMCAP Participating
Facilities to transition to the new Contract. Wholesaler will promptly notify the MMCAP Participating
Facilities in reasonable detail of any missing or incomplete documentation required for account set-up.
Wholesaler requires the following documents be completed and submitted to Wholesaler prior to opening a new
account:
1. Confirmation of MMCAP Membership (i.e. MMCAP ID, etc.)
2.
Letter of Authorization
3. Contract Pricing Declaration Form, found at:
http://www.cardinalhealth.com/pricingdeclaration
4. State Pharmacy License
5. DEA Certificate, if required for the Products ordered
6. State Controlled Substance License (if applicable)
7. Sales Tax Exempt Certificate
8. Signed Prescription Drug Marketing Act (PDMA) form
9. A contact name will be requested to address any potential Accounts Receivable/Payable issues
(credit applications are not required, however, the owner and party responsible for payment will be
required)
10. Compliance Representations and Warranties
No documentation is required by the Wholesaler for use of MMCAP’s repackaging, invoice auditing, and
returned goods service contracts. Only notification to the Wholesaler by the MMCAP Participating Facility is
required to use one of the applicable services in coordination with the Wholesaler.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
12
Wholesaler will provide an inventory of MMCAP Contract Products sufficient to meet the needs of the
MMCAP Participating Facilities from the beginning of the MMCAP contracting period. Historical usage data
will be provided by MMCAP six weeks prior to the start of the contract period. Wholesaler must have all
MMCAP Contract Products loaded in its ordering system(s) meaning both Cardinal.com and Order Express and
have a minimum of thirty (30) calendar days’ Product supply available to order prior to the Contract start date.
4.5 Inventory Management
A.
MMCAP-Contracted Manufacturers
For the term of this Contract, Wholesaler will have contracts with all MMCAP-contracted manufacturers as
required to provide all MMCAP Contract Products and perform the services described in this Contract to
MMCAP Participating Facilities. Exceptions must be approved in writing by MMCAP.
B.
Bid-Roll
For the term of this Contract, Wholesaler will agree to work with MMCAP during Bid-Roll intervals for both
generic and brand MMCAP Contract Products. During each of these intervals, the Wholesaler is required to
provide resources to work with MMCAP, supporting weekly meetings for status check-ins, beginning with the
receipt of the MMCAP contract files 45 days in advance of the effective date of the specific Bid-Roll interval.
The Wholesaler is required to establish and update a confirmation log, which will be utilized for the weekly
updates. As the effective date approaches, if daily check-ins should become necessary to meet process goals,
the Wholesaler will support any escalated efforts to ensure that preparations are in place to manage the
inventory stocking requirements.
The Wholesaler agrees to provide Inventory Reporting, specific to products that are:
•
Manufacturer Allocated
•
Manufacturer discontinued
•
Wholesaler discontinued
•
NDC changes
•
Backorders
•
No contract with manufacturer status
•
No Loads
•
Stock status by distribution center (DC)
to ensure that Bid-Roll is synchronized for the specific effective date interval of the Contract Product roll.
The Wholesaler agrees to complete an audit of the contract load prior to the effective date of the specific Bid-
Roll interval and weekly through the first month that the new contracts are in place.
C.
MMCAP Contract Products
The Wholesaler will be required to sufficiently stock MMCAP Contract Products. Wholesaler will be required
to stock inventory of MMCAP Contract Product unless there are fewer than three (3) units sold per month per
distribution center. If there is volume of three (3) units or more of an equivalent product, Wholesaler will be
required to stock inventory of MMCAP Contract Product based on equivalent product sales as requested by
MMCAP. MMCAP Contract Products that do not meet the units sold threshold and which are not stocked will
be expected to still be viewable within Wholesaler’s online ordering system(s) and orderable through Customer
Service.
1.
Wholesaler will not create unreasonable barriers in order to stock an MMCAP Contract Product.
2.
MMCAP must be notified in writing no later than five (5) business days if any of the
MMCAP contracted manufacturers’ contracts are terminated or expire via a Weekly Contract Changes
report found in Section 4.16 D. MMCAP reserves the right to modify the MMCAP-contracted
manufacturers list at any time during the Contract term.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
13
3.
Wholesaler acknowledges and agrees to carry utilization (demand) history for a minimum of 60
calendar days. If any Product has not been ordered after 60 calendar days, utilization history can be
decreased in Wholesaler’s inventory management system.
4.
Wholesaler will bring in a thirty (30) days’ supply of Products for initial account set-up based on usage
data from MMCAP. Thereafter, Wholesaler’s buying system will acknowledge created demand and
purchase inventory to meet said demand. Inventory will be maintained according to Wholesaler’s
Service Level and inventory parameters. See also Section 4.4, Contract Transition and Implementation.
5.
Wholesaler is responsible for providing an inventory forecasting report to MMCAP as requested. This
report will monitor and forecast ordering, usage patterns, as well as, identify significant trends,
including increases and decreases in purchases. Monthly contract compliance reports to monitor
purchases of Non-Contract Products will also be available to MMCAP upon request.
6.
Wholesaler may not discontinue stocking an MMCAP Contract Product unless there are fewer than
three (3) units sold per month per distribution center. For Products marked as non-stock, Wholesaler
must submit a monthly report detailing how equivalent generic purchasing is impacting non-movement.
7.
Timeline for new MMCAP Contract Product additions.
For newly added MMCAP Contract Products
that are currently available, Wholesaler will have the Products loaded, stocked and viewable in its
system and ready for delivery in accordance with the goals specified in Table 4.5E: Wholesaler Created
Stock Outage.
8.
Timeline for MMCAP Contract Products that are not stocked.
For MMCAP Contract Products that are
not stocked, an MMCAP Participating Facility may request the Wholesaler to add the Product to
inventory at the applicable distribution center by contacting customer service or its account
representative. Wholesaler will have the Products loaded, stocked and viewable in its system and ready
for delivery in accordance with the goals specified in Table 4.5E: Wholesaler Created Stock Outage,
unless the MMCAP Contract Product is delayed due to manufacturer unavailability or other factors
outside Wholesaler’s control. In the event the fulfillment of any of the requests will take longer than
what is specified in Table 4.5E: Wholesaler Created Stock Outage, Wholesaler will provide prior
written notice of the delay and the reason for the delay to the requesting MMCAP Participating Facility
and MMCAP.
9.
In the event MMCAP chooses to process Failure to Supply claims on behalf of MMCAP Participating
Facilities, the Wholesaler is to receive 30 days’ advance written notice. Wholesaler agrees to accept
electronic claims from MMCAP, and/or MMCAP Participating Facilities. Electronic claims will
identify the specific Contract Products for which alternative products were purchased and the amount of
reimbursement claimed on behalf of each MMCAP Participating Facility for the additional cost incurred
in purchasing the alternative products. Reimbursement amounts will be calculated by subtracting the
MMCAP Product invoice amount from the purchase invoice amount, excluding all other fees.
Wholesaler must pay such claims in the form of a credit within 30 days of the receipt of a claim
described above. If the Wholesaler does not pay such claim within such thirty (30) day period,
MMCAP will have the right to charge, and the Wholesaler agrees to pay, a late fee equal to the statutory
maximum,
defined in Minn. Stat. § 16D.13, as the allowable percentage per month of the amount of any
unpaid claim.
10.
Wholesaler’s designated contacts for all usage, inventory, and special order questions for MMCAP are
Holly Kartscher,
holly.kartscher@cardinalhealth.com
, 614-757-4622 and Kevin Wells,
kevin.wells@cardinalhealth.com
, 614-757-7924. MMCAP Participating Facilities can contact their
account representatives or customer service.
D.
Special Orders
1.
All large, one-time orders should be requested through the MMCAP Participating Facility’s Wholesaler
account representative or customer service.
2.
Special requests may be, but are not limited to: a) special one-time orders, b) governmental entities
placing large orders at the end of their fiscal year, c) items to be added to usage information to ensure
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
14
they are included as routine stock items at the distribution center, d) large quantities of identical lot
numbers
3.
For large volume orders, no more than ten (10) business days for processing and delivery will be
required, subject to supplier availability. Wholesaler will need additional time for special requests
requiring the same lot number.
4.
Large, one-time orders are not returnable without prior approval of manufacturer or Wholesaler.
Wholesaler commits the resources to working with the MMCAP Participating Facility and the
manufacturer to find a solution if the product must be returned.
5.
Stockpiling Program orders will be facilitated through the Cardinal Health Contract Compliance
Contracts & Pricing (CCC&P) staff member, to provide timely review of the specific items to be
purchased, dating, and stocking availability for the order to be fulfilled. Appropriate communication
throughout the process, from initiation to delivery, will be provided to the MMCAP Participating
Facility as well as the MMCAP Stockpiling Program Coordinator.
E.
Wholesaler Created Stock Outages
1.
Backorders due to Wholesaler created Stock Outages will be fulfilled in accordance with the goals
specified in Table 4.5E: Wholesaler Created Stock Outage.
2.
Wholesaler will have the manufacturer ship directly to the MMCAP Participating Facility for Next Day
Delivery if available by the manufacturer and if the Product is deemed critical by the MMCAP
Participating Facility. MMCAP agrees to work with Wholesaler on abusive situations.
3.
MMCAP Participating Facilities that have MMCAP Contract Products, deemed critical, drop shipped to
them directly from a manufacturer as a result of Wholesaler created Stock Outages will not be charged
additional fees.
4.
Manufacturer fees or fees to expedite orders for MMCAP Contract Products drop-shipped due to
Wholesaler created Stock Outages are not allowed.
5.
MMCAP Contract Products that are drop-shipped due to Wholesaler created Stock Outages will have
Wholesaler’s service fee discount applied.
6.
MMCAP Participating Facilities can place Products on backorder by calling Wholesaler’s customer
service department, otherwise orders for Products on backorder will be cancelled. Placing a Product on
backorder enables the MMCAP Participating Facility to receive the Product upon availability without
placing a reorder. The option to utilize auto-backorder function is available, but must be approved by
the MMCAP Participating Facility. Use of Order Express will allow the MMCAP Participating Facility
to select order exceptions from the Order Confirmation, and choose to add the Product(s) on a
Backorder List. This Backorder List displays updated availability information and may be edited by the
MMCAP Participating Facility. When a backorder Product comes back into stock and is allocated to
the order, the MMCAP Participating Facility will receive an alert in Order Express that the Product is
available to ship.
7.
If Product is transferred from an alternative distribution center in order to resolve a Stock Outage
situation due to Wholesaler created Stock Outages no fees will apply.
8.
If the Wholesaler fails to make prompt shipment of MMCAP Contract Products due to Wholesaler
created Stock Outages, Wholesaler’s ordering system(s) view errors, cancellations by Wholesaler, or
backorders (excluding manufacturer back-orders), the ordering MMCAP Participating Facility may buy
an alternate equivalent (generic) substitute Product from Wholesaler for the period in which the
Wholesaler is unable to provide the Product. The Wholesaler will be liable to the MMCAP Participating
Facility for any excess cost over the MMCAP Contract Product price and the alternate price of the Non-
Contract Product. This will be in effect for 90 calendar days from the date the Wholesaler is first unable
to supply the Product to an MMCAP Participating Facility. Credits due to an MMCAP Participating
Facility based on excess Product procurement costs caused by a Wholesaler created Stock Outage or
cancellation/backorder will be routed from the Wholesaler back to the participating MMCAP
Participating Facility in the form of an account credit.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
15
9.
When an MMCAP Participating Facility calls in regard to a Product that is temporarily out of stock,
customer service will coordinate efforts through the servicing Distribution Center and applicable
Inventory Departments to bring the requested Product into stock, as long as the minimum stocking
requirement of three (3) units per month is met. It is acknowledged by MMCAP that applicable
Pedigree requirements may limit the Wholesaler’s ability to provide alternate service for temporarily out
of stock and other product shortages.
10.
Wholesaler will notify MMCAP at least ten (ten) business days in advance of any changes to the list of
possible inventory stocking codes viewable on its online ordering system(s). A complete list of all
possible stocking codes and thorough descriptions of each code will be provided. MMCAP and
MMCAP Participating Facilities must be informed of any potential changes to demand shift logic and
stocking request procedures.
Table 4.5 E: Wholesaler Created Stock Outage
Wholesaler created “Stock
Outages”
Goal to have stock available to
ship to an MMCAP
Participating Facility
Criteria for when Failure to
Supply (FTS)* Applies
Current Contract Products
MMCAP Contract Product not in
stock in Distribution Center and
stock is available from national
warehouse if applicable.
•
Goal: 3 business days.
•
FTS applies when Wholesaler
has
exceeded five (5) business
days.
•
FTS applies when Wholesaler
has
exceeded seven (7) business
days
for MMCAP Contract
Products that are not stocked due
to utilization levels
MMCAP Contract Product not
stocked in distribution center,
available from another distribution
center (if applicable) where there
may be a Contract Product item
surplus.
•
Goal: 3 business days.
•
FTS applies when Wholesaler
has
exceeded five (5) business
days.
MMCAP Contract Product not in
stock at a specific distribution center,
and not stocked at the national
warehouse or another distribution
center, when the MMCAP
Participating Facility attempts to
order and subsequent request to stock
is made to Wholesaler (assumes
Contract Product is not MBO or on
Manufacturer Allocation).
•
Goal: 5 business days.
•
FTS applies when Wholesaler
has
exceeded ten (10) business
days for Rx and fifteen (15)
business days for Consumer
Health/OTC
products for
MMCAP Products currently
meeting 3 units of usage at the
distribution center.
•
FTS applies when Wholesaler
has
exceeded fifteen (15)
business days
for MMCAP
Contract Products that are not
stocked due to utilization levels.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
16
Table 4.5 E: Wholesaler Created Stock Outage (Cont.)
Wholesaler created “Stock
Outages”
Goal to have stock available to
ship to an MMCAP
Participating Facility
Criteria for when Failure to
Supply (FTS)* Applies
Newly Added Contract Products
New Contract Product – relationship
with Mfg/Sup already established
and NDC/UPC is already stocked at
the distribution center for other
Wholesaler’s customers.
•
Goal: 3 Business Days.
•
FTS applies when Wholesaler
has
exceeded five (5) business
days
from the time the
Wholesaler receives notification
that the Product has been added
to the MMCAP Contract.
New Contract Product– relationship
with Mfg/Sup already established;
product is not stocked at National
Logistics Center or distribution
centers for other customers.
•
Goal: 10 Business Days.
•
FTS applies when Wholesaler
has
exceeded fifteen (15)
business days
from the time the
Wholesaler receives notification
that the Product has been added
to the MMCAP Contract.
New Contract Product – relationship
with Mfg/Sup needs to be established
•
Goal: Not to exceed ninety
(90)
calendar days
from the
time the Wholesaler receives
notification that the Product
has been added to the
MMCAP Contract.
Due to the variability in the timing of
establishing a new
manufacturer/supplier relationship,
an MMCAP Participating Facility
will not have access to a Failure to
Supply remedy, unless Wholesaler
fails to inform MMCAP, in writing,
of difficulties with the specific
manufacturer/supplier.
Shift Demand
Shift demand of Cardinal Key
equivalent(s) when a lower priced
product comes on as a new Contract
Product
Assumes manufacturer has product
available to ship to the Wholesaler,
as of the specified effective date.
•
Goal: Ten (10) business
days.
•
FTS applies when Wholesaler
has
exceeded fifteen (15)
business days
MMCAP provides
notification to the Wholesaler or
the new Contract Product
effective date, whichever is later,
to ensure the new generic
Product is loaded, viewable, and
stocked at each distribution
center where there is MMCAP
Contract and/or Non-Contract
usage for Cardinal Key
equivalents.
Remainder of Page Intentionally Left Blank
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
17
Table 4.5 E: Wholesaler Created Stock Outage (Cont.)
Wholesaler created “Stock
Outages”
Goal to have stock available to
ship to an MMCAP
Participating Facility
Criteria for when Failure to
Supply (FTS)* Applies
Shift Demand
When a dual/multiple award Contract
Product is discontinued, demand is to
be shifted to a less active, Cardinal
Key equivalent, alternative Contract
Product. This demand shift and
stocking is required as not to disrupt
access to an alternative Contract
Product.
Assumes manufacturer has product
available to ship to the Wholesaler,
as of the specified effective date.
Goal: Five (5) business days.
•
FTS applies when Wholesaler
has
exceeded ten (10) business
days for Rx and fifteen (15)
business days for Consumer
Health/OTC
from when
MMCAP provides notification to
the Wholesaler of Contract
Product being discontinued, to
ensure the less active, alternative
Contract generic Product is
loaded, viewable, and stocked at
each distribution center, for
MMCAP Products currently
meeting 3 units of usage at the
distribution center.
•
FTS applies when Wholesaler
has
exceeded fifteen (15)
business days
for MMCAP
Contract Products that are not
stocked due to utilization levels.
* FTS = Failure to Supply, where MMCAP Participating Facility is provided a credit of the difference between
the lower cost Contract Product not available and the higher cost product (either Contract or Non-Contract) that is
purchased from Wholesaler as a result of the Wholesaler exceeding the specified business days in stocking the
Contract Product. Wholesaler will not be responsible to pay FTS claims for MMCAP Contracted products that
are on supplier disruption (i.e., manufacturer backorder, manufacturer allocation, etc.) or products in which the
supplier cannot support the additional volume requested. All FTS claims will be subject to the same exclusionary
rules as identified in section 4.5, G Service Levels, under MBO Units.
Failure to Supply (FTS) MMCAP Contracted Products Process:
1.
If Wholesaler fails to maintain sufficient inventory of MMCAP Contract Products to meet the
anticipated needs of MMCAP Participating Facilities, an MMCAP Participating Facility may purchase
an alternate equivalent generic product from Wholesaler for the period in which Wholesaler is unable to
provide the Product. Wholesaler will be liable for any excess cost over the MMCAP Contract Price for
a period of 90 calendar days from the date the Wholesaler is unable to supply the MMCAP Contract
Product to an MMCAP Participating Facility.
2.
Wholesaler will use the price of the MMCAP Contract Products and the invoice price of the alternate
generic product to determine the amount of reimbursement for failure to supply claims.
3.
An MMCAP Participating Facility will submit the following information to Wholesaler for each
MMCAP Contract Product that reimbursement is expected:
•
MMCAP Participating Facility Name, Address, City, State, Zip
•
MMCAP Participating Facility DEA or HIN
•
MMCAP Participating Facility point of contact for reimbursement (including telephone number
and e-mail address)
•
Product description
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
18
•
Generic Source price
•
MMCAP Participating Facility’s purchase price
•
Alternate NDC
•
Alternate NDC manufacturer
•
Alternate NDC purchase price
•
Alternate NDC quantity purchased
•
Alternate NDC date purchased
•
Amount due
•
Reason (e.g., brief description, proof of failed order)
•
A copy of the invoice showing the purchase of an equivalent generic product from the
Wholesaler
4.
Wholesaler must pay claims directly to the MMCAP Participating Facility via credit memo within 30
days of receipt of a claim.
5.
Wholesaler will be responsible for payment of Failure to Supply claims for 90 calendar days from the
date the Wholesaler is first unable to supply the Product to an MMCAP Participating Facility. Credits
due to an MMCAP Participating Facility based on excess product procurement costs caused by the
Wholesaler’s stocking failure will be routed from the Wholesaler back to the MMCAP Participating
Facility in the form of an account credit.
6.
Wholesaler’s address for FTS reimbursement:
Electronic filing address:
tiffany.kuhel@cardinalhealth.com
Wholesaler will provide training to MMCAP Participating Facilities using Wholesaler’s Generic Drug Program
to include:
1.
Ordering training to all MMCAP Participating Facilities desiring training, to include
ordering of non-stocked MMCAP Contract Products to be stocked as inventory in
Wholesaler’s distribution center and available for prompt delivery.
2.
Ranking for both MMCAP and Wholesaler’s Generic Drug Program contracts by contract
and by price.
3.
Filtering and sorting products to find the lowest priced item by purchased size or unit of
measure.
F.
Manufacturer Backorders
1.
Wholesaler’s order entry system will provide notification prior to order of all Manufacturer Backorders.
2.
Wholesaler will also list all Manufacturer Backorders on its ordering website and the MMCAP
Participating Facilities can call customer service.
3.
Notifications of Manufacturer Backorders will be provided by Wholesaler’s weekly “Service Flash,”
which is available via Wholesaler’s website or push e-mail. Backorder notices will contain an expected
date of resolution as well as the reason for the backorder (e.g., raw material shortage), if the information
is available from the supplier. When information is not forthcoming from the supplier, the Wholesaler’s
standard procedure is to make the “date out” two (2) months from the notification, following up with the
supplier on an every two week basis to obtain the appropriate updated information as to when products
will be available. Wholesaler’s “Service Flash” will also list recalled Products, discontinued Products,
and Products on allocation.
4.
Wholesaler acknowledges and agrees that its policy is to kill or fill all orders at order placement unless
the MMCAP Participating Facility is set up to receive backorders.
5.
MMCAP Participating Facilities with questions in regard to recalled, allocated, and discontinued
Products on backorder should call Wholesaler’s customer service.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
19
G.
Service Levels
1.
Raw and Adjusted Fill Rates will be calculated on a monthly basis for each MMCAP Participating
Facility’s account(s) (including 340B Drug Pricing Program accounts) serviced by the Wholesaler. Raw
and Adjusted Fill Rates will also be calculated for MMCAP as a group as well as by each distribution
center servicing MMCAP Participating Facilities.
2.
Wholesaler must submit a Raw and Adjusted Fill Rate Report using the calculations defined below
(Service Level Definitions) for each MMCAP Participating Facility, distribution center serving
MMCAP Participating Facilities, and by MMCAP as a group to MMCAP on a monthly and a quarterly
basis. See also Section 4.19 Mandatory Reports, for report requirements.
3.
Service Levels will be defined as follows:
a.
Raw Fill Rate will be calculated by dividing the number of units delivered by the number of units
ordered.
Raw Fill Rate = Number of Units Delivered
Number of Units Ordered
Orders for Products that are not filled as a result of Wholesaler being out of stock of such Products
will be considered as a line item for Product ordered in this calculation regardless of the reason for
Wholesaler being out of stock.
b.
Adjusted Fill Rate will be calculated by dividing the number of units delivered by the number of
units ordered minus the number of Manufacturer Backorder (MBO) units.
Adjusted Fill Rate = Number of Units Delivered
Number of Units Ordered - MBO Units
MBO Units will include:
•
Orders for Products made but not shipped because of industry wide shortages or other issues
beyond the control of Wholesaler as demonstrated by Wholesaler to the reasonable
satisfaction of the MMCAP Managing Director, lead pharmacist, and lead financial
representative (e.g., Manufacturer Unable to Supply, Manufacturer Allocations,
Manufacturer Backorders, Manufacturer Recalls, and Manufacturer Discontinued).
•
Purchases of Products which exceed 150% of the previous months activity
•
Products ordered which are filled and delivered within 24 hours of the original order
•
Partial shipments if 75% or more of the order can be completely filled within 48 hours
•
Unavailable Products repeatedly ordered within 72 hours of the original order
•
Special orders requiring shipment from the manufacturer
•
Non-stock Products that are not under contract with MMCAP
•
Contract rolls/awards where notifications from MMCAP are received with less than 4
weeks’ notice prior to transition of addition (e.g., bid year transition). Wholesaler may only
include Products in MBO Units for 30 calendar days after notification.
c.
Non-Contract OTC Products will not be included in the Adjusted Fill Rate.
4.
Wholesaler agrees to maintain a monthly Adjusted Fill Rate for pharmaceutical Products of at least
98.5% (calculated as set forth above) for each MMCAP Participating Facility account. Pharmaceutical
Products include but are not limited to: MMCAP Contract and Non-Contract prescription drug Products,
MMCAP Contract OTC Products, IV solutions, contrast media, nutritionals, and anesthesia gases.
5.
If the monthly Adjusted Fill Rate for pharmaceutical Products (calculated as set forth above) for a
MMCAP Participating Facility account falls below 98.5%, Wholesaler will provide the affected
MMCAP Participating Facility an action plan for improvement and will work in good faith to resolve
the Adjusted Fill Rate issue.
6.
Service level requirements for MMCAP Participating Facilities currently utilizing the Wholesaler will
begin 30 calendar days following the effective date of this Contract. The service level for new MMCAP
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
20
Participating Facilities added to this Contract after the effective date will begin 30 calendar days from
the time Wholesaler receives the MMCAP Participating Facility’s first order.
H.
Shift Demands
The Wholesaler will perform weekly maintenance in the Wholesaler’s procurement system, shifting demands
for additions and deletions where applicable. The Wholesaler will use Cardinal Key, (specific for active
ingredient, route, dosage form, pack size and strength), rather than NDC to aid in shift demand stocking
decisions. Brand to Generic Shift
.
When a branded pharmaceutical Product patent release approaches,
Wholesaler will utilize the following process to ensure MMCAP Contract Products are expedited for the newly
awarded generic.
a.
Ten (10) business days prior to patent expiration:
•
Wholesaler will run a sales report capturing three (3) months of purchase history on the
branded pharmaceutical Product.
•
Sales history will be provided to MMCAP and a reminder sent that the Wholesaler plans to
shift demand from the branded pharmaceutical Product to the awarded generic Product.
•
MMCAP will notify Wholesaler of the awarded generic Product at the same time MMCAP
notifies the awarded generic Product manufacturer.
•
Wholesaler will provide MMCAP with a summary of the shift demand that occurred per
distribution center.
•
Upon manufacturer launch and/or availability, Wholesaler will have demands shifted and
will expedite the new MMCAP generic Contract Product into applicable distribution
centers.
b.
A shift demand will occur for all Product presentations for which there was a brand Product
available. For example, if the brand Product was available in 100-count bottles, 500-count
bottles and unit dose packaging (UD100ea x 1), Wholesaler will shift demand generically for all
three presentations, if available.
c.
Shift demands will be converted even if bottle or package size varies. For example, if the brand
Product was available in 60 count bottles but the generic Product is available in 100 count
bottles, demand will be shifted to the 100 count bottles.
d.
Shift demands will not take place on additional bottle sizes or unit dose packaging that was not
previously available unless Wholesaler is directed by MMCAP to do so. MMCAP will notify
Wholesaler of expected shift demands through its weekly contract update process.
1.
Generic to Generic Shift.
Wholesaler will process shift demands for multi-source generic Products
added to contract upon notification of an award from MMCAP. Wholesaler has ten (10) business days
from the time of MMCAP notification or until the product effective date, whichever is later, to have the
new generic Product loaded, viewable, and stocked at each distribution center where there is MMCAP
contract and/or non-contract usage for equivalent generic Products. This time line assumes that the
manufacturer has the Contract Product ready to ship to the Wholesaler on the effective date specified.
Wholesaler will provide MMCAP with a summary of the shift demand that occurred per distribution
center.
2.
Additional Services and Activities
a.
Wholesaler will provide a weekly price change report to MMCAP to assist in monitoring price
reductions for multi-source generics. Wholesaler will do shift demands for price decreases
upon MMCAP request.
b.
Weekly maintenance is run in the Wholesaler’s procurement system, shifting demands for
additions and deletions where applicable.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
21
4.6 Management of MMCAP Contract Products
A.
Price Loading and Pricing Accuracy
1.
Wholesaler will be responsible for processing the MMCAP Contract File Updates, or the files sent to
the Wholesaler by MMCAP which specify the Products and pricing that MMCAP has negotiated with
its contracted manufacturers. Wholesaler will load and make viewable in its ordering system(s) all data
lines from MMCAP’s Contract File Update notifications within five (5) business days from the date of
receipt or by the MMCAP Contract File Update effective date, whichever is later.
When manufacturer
verification is needed in order to load an MMCAP Contract Product and the MMCAP-contracted
manufacturer has not responded or provides data that is inconsistent with the MMCAP Contract File
Updates, Wholesaler will promptly notify MMCAP in writing no later than two (2) business days (after
the five (5) business days allowed for Wholesaler processing).
2.
Wholesaler agrees that any notice received from an MMCAP-contracted manufacturer or supplier for a
price or Product change on an MMCAP Contract Product will be forwarded to MMCAP in the form of a
weekly contract change report (see Section 4.19, Mandatory Reports). Wholesaler agrees to provide
credits/rebills at no charge to correct pricing in the event that MMCAP and its contracted manufacturers
disagree in regard to price and Product loading.
3.
Price change reports will be available to all MMCAP Participating Facilities at any time via
Wholesaler’s ordering system(s).
4.
Provided that Wholesaler has received all requested account set-up information, Wholesaler will have
all MMCAP contract and individual contracts loaded prior to the MMCAP Participating Facility’s first
order. This includes all tiered contracts, if applicable, per receipt of documentation from the supplier.
B.
Product Additions/Deletions
1.
Wholesaler may not add or remove any MMCAP Contract Products from its database without providing
prior written notification to MMCAP. Written notification can consist of the latest weekly Contract
Change report which lists all changes made within the past week to the MMCAP contract (see Section
4.19, Mandatory Reports).
2.
Wholesaler agrees to maintain an Adequate Supply for a Product that is added to the MMCAP contract
due to a change in the NDC number, Product deletion, and replacement of a Product by the
manufacturer, and in situations where Wholesaler is notified that MMCAP has determined a need to
switch its procurement selections. Immediately upon notification of the change, Wholesaler will
generate a usage report for the old item. This report will be used to decrement the old item(s) and
increment the new item(s) as needed, to procure Product in a timely manner to satisfy MMCAP
Participating Facilities’ needs.
C.
Convenience and Individual Contracts
1.
MMCAP Contract Products priced at Wholesale Acquisition Cost – zero percent (WAC - 0%) will be
reported as on-contract purchases.
2.
Wholesaler agrees that contract purchases for WAC – 0% will receive Wholesaler’s service fee
discount, as set forth in Attachment C, Service Fee Discount Matrix.
3.
Wholesaler will not charge any delivery fees for MMCAP Contract WAC – 0% Products if they fall
within the MMCAP Participating Facility’s normal delivery schedule.
4.
Upon request of an MMCAP Participating Facility and after prior approval by MMCAP in writing,
Wholesaler will supply and distribute Products acquired under contracts individually negotiated with
(e.g., pharmaceutical) manufacturers by an MMCAP Participating Facility. Service fee discounts will
be applied to purchases made from MMCAP Participating Facility individually negotiated contracts.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
22
D.
Product Expiration Dating
1.
At a minimum, expiration dating for all MMCAP Contract Products and Non-Contract Products
delivered under this Contract must have a minimum shelf life of six (6) months expiration dating
remaining upon delivery to the MMCAP Participating Facilities.
2.
Shipment of Product with expiration dating of less than six (6) months requires the prior approval of
the MMCAP Participating Facility before release and delivery of the short-dated Product.
3.
If Wholesaler distributes short dated Product to an MMCAP Participating Facility without prior
approval, the Product may be returned to Wholesaler, with the MMCAP Participating Facility being
credited for the return, subject to Attachment A, Section 4.12 H, Goods Returned to the Wholesaler.
4.7 Ordering Equipment
A.
Ordering System
1.
Wholesaler will provide to each MMCAP Participating Facility an ordering method that allows the
facility to quickly and accurately order MMCAP Contract Products, within the technological
capabilities of the MMCAP Participating Facility. At a minimum, Wholesaler’s ordering system(s)
must provide the following functionalities:
a.
Clearly identify all MMCAP Contract Products and whether these Products are in stock
b.
Build and place electronic orders
c.
Review pending orders for correctness and contract compliance
d.
Provide online allocation of ordered amounts
e.
Receive Order Confirmation reports
2.
Wholesaler will offer its ordering system(s) to MMCAP Participating Facilities. Wholesaler currently
supports the following ordering methods: Internet, EDI, phone orders via interactive voice response,
direct call to customer service, handheld device ordering, and fax orders. All ordering methods
described below require minimal setup and implementation work with the exception of EDI.
a.
Telxon
– is a hand held ordering system which allows MMCAP Participating Facilities to order
at the SKU level directly from the shelf location.
b.
TeleServe -
allows MMCAP Participating Facilities access to Wholesaler’s Stock Support Line
(866-958-2200) 24 hours a day, 7 (seven) days a week to order Product and check stock status.
TeleServe is tied into Wholesaler’s pharmaceutical distribution system so users receive instant
confirmation that Product is available and will be shipped with the next delivery. The system
features interactive voice response.
c.
Cardinal.com
- is a pharmacy order and inventory management solution available via the
Internet. Cardinal.com features real-time stock status, real-time allocation of Products,
instantaneous Order Confirmation, electronic credits and returns, and reporting capabilities.
Cardinal.com will be sunset, once all MMCAP Participating Facilities have been converted and
transitioned to Order Express. The Wholesaler’s Account Management team will continue
working with MMCAP Participating Facilities to convert them from Cardinal.com to Order
Express. Transition planning and execution includes account setup, training, and follow up to
ensure compliance. Wholesaler’s goal is to convert all current and new MMCAP Participating
Facilities to Order Express by the end of FY15. Wholesaler will report monthly to MMCAP, the
status of the conversions and transition timelines.
d.
Order Express
– is a web-based order entry and inventory management system that will
provide MMCAP Participating Facilities with real-time access to up-to-date product
information including product availability, immediate order confirmations, 36 months of
purchase history for reporting, and other reporting capabilities.
e.
EDI Capabilities
- the process for Electronic Purchase Orders begins with the receipt from a
customer of an EDI PO (850), followed by the delivery to the customer of an Order
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
23
Confirmation (855), an Advanced Shipment Notice (ASN) (856) is created once the order is
picked, then an Electronic Invoice (810), which is followed by a Electronic Funds Transfer
Remittance Advice (820) from the customer. The Wholesaler is required to support all 810, 894
and 880 EDI protocol documents for electronic invoicing as well as 820 notices for electronic
remittances. If an MMCAP Participating Facility chooses to implement an EDI solution,
Wholesaler will have a dedicated staff who will work with the customer and the third party
vendor to develop the appropriate interface to begin trading files.
f.
Mobile Solutions
with the MC70 Handheld Scanner- allows customers to order, receive, and
inventory Product using a handheld device. The user can send/receive current catalog data,
submit orders, transfer orders to Cardinal.com, and retrieve receiving data. The device offers
greater flexibility in the management of the receiving process, allowing receiving to take place
at any location within the pharmacy. Mobile Solutions utilizes wireless technology. Mobile
Solutions will be retired along with Cardinal.com and is to be replaced with Order Express with
MC40.
g.
Mobile Order Express with MC40
- allow a user to build and place an order, perform physical
inventory and receive their shipment of orders all on the device with no need to cradle or sync
to a computer. The Mobile website seamlessly integrates with the desktop experience on Order
Express giving the user easy access to the best of both features. With instant synchronization of
data between the desktop and mobile experience, any user can review and modify actions
throughout the ordering process. The MC40 scans directly in the Mobile Order Express website
obtaining the most recent catalog and pricing which provides the pharmacy with accurate stock
and pricing information.
The MC1000 builds an order and take inventory offline. The MC1000 syncs with Order
Express to allow easy access to ordering and inventory files. The MC1000 carries a full product
catalog of available products and displays product details remotely on the device.
B.
Hardware, Software, and Devices
1.
Wholesaler agrees that all fees charged for software and/or ordering devices will be listed in Attachment
B, Discounts and Fees.
2.
Telxons will be provided upon request and based on need, depending upon availability in the
Wholesaler’s supply network. As a result of enhanced handheld device technology, Telxons do not
interface with Order Express and will therefore be completely phased-out with Cardinal.com
3.
MMCAP Participating Facilities that have existing hardware provided by Wholesaler previously will
have it remain until it no longer functions or is not needed by the facility. Wholesaler’s handheld
devices require the installation of Microsoft’s Active Sync 4.5 which is currently provided by Microsoft
as freeware.
4.
Wholesaler’s CSOS requires the installation of Axway’s Cyclone Activator which is provided by
Wholesaler at no charge. Wholesaler is working to have CSOS technology available to MMCAP
Participating Facilities that does not require the use of Java.
C.
Installation and Training
1.
Wholesaler agrees that all provided hardware, software, and ordering devices will be fully functional at
time of installation.
2.
Software updates, system changes, and training will be facilitated through a variety of communication
methods. Scheduled maintenance as well as new Product offerings and enhancements will be detailed
on the MMCAP Participating Facility’s Cardinal.com or Order Express home page. Training can either
be provided on-site by the business/IT team or the MMCAP Participating Facility will have the option
to participate in monthly application training webinars.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
24
3.
Wholesaler’s software for CSOS and Mobile Solutions can be downloaded from the Internet. System
requirements and installation instructions for CSOS and Mobile Solutions will be available from
Wholesaler upon request.
4.
Training will include:
a.
Proper use of order entry devices including computer and hand held units
b.
How to access and interpret Wholesaler’s inventory status
c.
Order placement process (Product inquiry, placement, order edit, printback confirmation, etc.)
d.
Any required ordering system maintenance
e.
Downloading price changes
f.
Performing file maintenance
g.
Requesting or printing bar code labels
h.
Download/Run/Print/Export contractually required reports
i.
Operation of Inventory Management program
j.
Identifying MMCAP Contract Products (e.g., contract ranking)
k.
Any other commercially available training in use of the equipment or ancillary items
l.
Contact information in case of questions regarding ordering
m.
Training guides or manuals and system operating manuals, accessible on-line (including all
updates), for all equipment and software furnished by the Wholesaler to each individual
ordering facility
n.
Assigning of account login IDs and passwords
o.
Item Return Processing Training
p.
Technical support to interface hand held devices with each facility’s PC/network infrastructure.
5.
Wholesaler will make available to each facility online training documents and videos for the Order
Express ordering system being used by the MMCAP Participating Facility that outlines all of the
functions on the online ordering tool. Wholesaler will work with MMCAP to develop other training
processes.
D.
Inventory at an MMCAP Participating Facility
Wholesaler will provide, at no cost to the MMCAP Participating Facility, training, software, reports, and
handheld devices to perform an onsite inventory. Hiring a physical inventory company is not included in
these services. Requests for inventory support need to be made directly with the MMCAP Participating
Facility’s account representative or customer service. Wholesaler recommends at least fourteen (14) day
lead time to reserve extra handheld devices for use in performing inventory; Wholesaler will take
reservations for handheld devices up to 60 calendar days prior to the inventory date. MMCAP Participating
Facilities may also request a set of shelf labels to be printed using the facilities’ purchase history. The labels
can be printed in Brand or Generic name order for ease of use. Training on the inventory procedure may be
on-site or online.
E.
Ordering System(s) Back-up Service, Maintenance and Repair
Wholesaler agrees to provide all software updates and system maintenance at no cost for the term of this
Contract. Cardinal.com is Internet-based and therefore requires routine site maintenance. Order Express,
while web-based, also requires routine maintenance. Wholesaler agrees that maintenance on either ordering
system will only occur on weekends and MMCAP Participating Facilities will be notified in advance. The
Wholesaler reserves a maintenance window for Cardinal.com and Order Express of Saturday 8pm through
Sunday 8am EST. TeleServe stock status line, Telxons, faxes, and calling the customer service department
will serve as back-ups for Wholesaler’s ordering systems. If computer maintenance is required, Wholesaler
will replace or repair accordingly.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
25
F.
Label and Marking
Wholesaler’s online ordering system(s), Order Express, will print shelf labels, on-site, on demand. MMCAP
Participating Facilities may also call Customer Service to request shelf labels. Wholesaler can provide
contract status on its shelf labels. However MMCAPParticipating Facilitiescan also request that the contract
name field be added to their yellow Product sticker format which will aid in the identification of MMCAP
Contract Products.
4.8 Order Placement
A.
Wholesaler’s Ordering System(s)
1.
Wholesaler’s ordering system(s) will display the following information:
•
MMCAP Participating Facility’s name
•
Wholesaler assigned account number
•
Product Name
•
Wholesaler’s Product Number
•
Generic Name
•
Product Description
•
Strength
•
Packaging
•
Manufacturer
•
Unit dose indicator
•
Form (e.g., tablet, capsule, etc.)
•
National Drug Code (NDC) for applicable Products
•
Wholesale Acquisition Cost
•
Average Wholesale Cost
•
Orange Book Rating – Referred to as AB rating
•
Universal Product Code (UPC), where applicable
•
Product Control Schedule (e.g., CII)
•
DEA number (where applicable)
•
Type of contract – contract identification or code that identifies product as an MMCAP
Contract Product, Non-Contract, 340B Drug Pricing Program contract, or alternate contract
Product
•
Contract price (specific to the pricing and contract eligibility of each MMCAP Participating
Facility).
•
Product denoted as available as a Drop Shipment
•
Product inventory status (e.g., stocked, unavailable due to MBO, Wholesaler Out of
•
Stock, or allocation situations)
•
Real-time Product inventory quantity available (Product in stock minus those allocated
•
to orders)
•
Alternate Product search option
•
Product inquiry search option
•
Automatic substitution information option
2.
Wholesaler’s ordering system(s) cannot display the following information:
•
Universal Product Number (UPN), - not currently on development plans for an addition to
ordering systems(s) data fields
•
HIN number (where applicable) – will be made available Summer 2015
3.
Wholesaler agrees that all new MMCAP Participating Facilities will be started with a standard
default ordering set-up to ensure MMCAP contract compliance. This default set-up will be
approved by MMCAP prior to being deployed.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
26
4.
All MMCAP Contract Products and MMCAP Participating Facility individually negotiated
contracts will be loaded in the prime or first position (with price being the ranking determinant
between MMCAP Contract Products and individually negotiated contracts) and be visible in
Wholesaler’s ordering system(s). In situations where the MMCAP Contract Product and another
item are the same price, the MMCAP Contract Product and price will be loaded and visible. When
there is a lower cost option for which there is a shared NDC, the lower cost option will be visible.
Wholesaler’s ordering system(s) will clearly identify MMCAP Contract Products. Wholesaler will
not redirect MMCAP Participating Facility to other available contracts except with the written
request of the MMCAP Participating Facilities.
5.
Wholesaler’s ordering screen will clearly identify special orders such as controlled substances (e.g.,
CIIs), Drop Shipments, and Closed Distribution Products. Closed Distribution Products and Drop
Shipment Products are identified in the Stock status field. Drop Shipment Products are denoted
with a “DSHP” within the item description.
B.
Automatic Substitution
Automatic substitution will only be permitted upon specific request by an MMCAP Participating Facility,
with prior written notification provided by Wholesaler to MMCAP. In instances where the Wholesaler uses
the Automatic Substitution process, the MMCAP Participating Facility must be notified of the substitution
and the substituted Product must be annotated as such on the MMCAP Participating Facility’s Order
Confirmation. Once such an agreement is entered into between the Wholesaler and the MMCAP
Participating Facility, the Wholesaler will be required to maintain an Adequate Supply of the alternate
Product. There will be no commitment to buy the alternate Product and any order consisting of alternate
Products will still require the prior approval of the MMCAP Participating Facility. Automatic substitution
by the Wholesaler without the MMCAP Participating Facility’s prior approval is prohibited. Upon request,
Wholesaler will supply MMCAP with a list of facilities using automatic substitution.
C.
Confirmation Printback/Order Confirmation
1.
All orders processed through Wholesaler’s electronic ordering system(s) will receive a
Confirmation Printback or Order Confirmation generated from the Wholesaler’s system and sent to
the ordering MMCAP Participating Facility. For orders submitted through Cardinal.com or Order
Express ordering, an immediate Order Confirmation is provided to the user. Additionally, the
MMCAP Participating Facility can elect to have the Order Confirmation print automatically to a
local printer for each order submitted.
2.
Any additional fees for Product distribution will show as a separate line charge on an invoice, but
not on the Order Confirmation.
3.
Order Confirmations, regardless of the order’s source system, can be viewed on Cardinal.com and
Order Express once the order has been allocated. The timeframe for allocation is approximately five
(5) minutes from the time Wholesaler receives the order. If the MMCAP Participating Facility
chooses to receive an EDI Order Confirmation, the Order Confirmation is still generated at the time
of allocation, however the file may take anywhere from 10 to 30 minutes to be transmitted to the
MMCAP Participating Facility to allow for file translation time.
D.
Controlled Substances Ordering System
1.
Wholesaler’s Controlled Substance Ordering System (CSOS) will allow MMCAP Participating
Facilities to submit secure, electronic orders for controlled substances.
2.
Wholesaler will provide CSOS through Cardinal.com and Order Express.
3.
Wholesaler’s standard turnaround time for the hard copy version of DEA Form 222 is 24 hours to
48 hours, depending on location. If CSOS orders are received by the distribution centers’ cutoff
time, they will be delivered the next day.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
27
4.
Controlled substances ordered on a hard copy version of DEA Form 222 will be shipped upon
Wholesaler’s receipt of the form or on the Next Scheduled Delivery Day. Wholesaler will not
impose any additional shipping charges for ordering controlled substances if the controlled
substances are shipped separately from the original order or on the Next Scheduled Delivery Day.
5.
For controlled substance orders using electronic CSOS (electronic DEA Form 222), Wholesaler’s
standard turnaround time is 24 hours. Wholesaler will not apply additional shipping charges for
controlled substances when shipped separately from another order due to process delays.
6.
All fees for the use of CSOS or for using the hard copy version of DEA Form 222 will be listed on
Attachment B, Discounts and Fees.
E.
Technical Support for Ordering
Wholesaler’s technical support is available from 7:00 A.M. – 12:00 A.M. EST Monday-Friday and 9:00
A.M.- 9:00 P.M. Saturday & Sunday. From midnight until 8 am, the line will transfer to voicemail,
however, Wholesaler’s technical staff on site will check voicemail every hour and will respond to any
urgent issue. The primary method for contacting technical support is via telephone, however for certain
support scenarios, technical support can accommodate requests via email.
F.
340B Drug Pricing Program
Wholesaler is and must remain for the term of this Contract an Authorized Distributor for the 340B Drug
Pricing Program. Wholesaler is required to provide notice in writing to MMCAP, immediately, in the event
of a status change. For MMCAP Participating Facilities that are eligible and participating in the 340B Drug
Pricing Program, the Wholesaler will maintain two separate purchasing accounts, one for ordering MMCAP
Contract Products and one for ordering 340B Drug Pricing Program contract products.
Wholesaler is required to have sufficient subject matter expertise available to MMCAP Participating
Facilities to support the complex intricacies of this program.
Service fee/cost of goods discounts are to be applied to 340B purchases, with 340B purchase volume to be
included in the total purchasing volume for the state, as it relates to the service fee/cost of goods discount
volume matrix.
4.9 Delivery
A.
Routine Delivery
1.
Wholesaler agrees that all fees charged for delivery will be listed on Attachment B, Discounts and
Fees. Wholesaler will not charge any additional fees for routine service to Alaska or Hawaii.
2.
All routine scheduled order shipments will be F.O.B. destination, freight prepaid.
3.
Wholesaler will provide delivery services based on average monthly purchasing volume as
summarized below. Scheduled delivery days will be communicated at setup.
Average Monthly Purchasing
Volume
Number of Free (No-Charge)
Deliveries per Week
$0 - $25,000
5
$25,000 and up
5
4.
Wholesaler agrees that it will not charge a fuel surcharge for the term of this Contract and any
extensions.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
28
5.
Wholesaler will provide a daily order and delivery schedule for each MMCAP Participating
Facility. All deliveries will be made next day or on the Next Scheduled Delivery Day (excluding
Alaska and Hawaii), unless communicated otherwise.
6.
Wholesaler’s daily order cut off time will be 7 pm local time with the delivery window from 7 am –
3 pm the next day depending on location and distance from servicing distribution center. Orders
received Monday through Thursday will be delivered the following day. Orders received Friday
will be delivered the next business day (Monday). Wholesaler’s distribution centers will make a
good faith effort to deliver before noon local time.
7.
Wholesaler will provide a Holiday Schedule to each MMCAP Participating Facility and MMCAP
throughout the term of this Contract. Wholesaler will notify MMCAP Participating Facilities of the
holiday schedule by using tote stuffers.
8.
Wholesaler usually makes normal deliveries via its contracted couriers. Delivery to locations
outside of the continental US will be accomplished via commercial air, vessel, and local couriers.
9.
Wholesaler will stock and deliver Products that require special handling and shipping, such as
controlled substances, refrigerated or temperature-controlled Products, oncology or chemotherapy
Products, and any hazardous materials. Wholesaler will only ship hazardous materials as allowed
by the appropriate government regulations.
10.
Same day delivery is not available unless the service can be available through emergency delivery.
11.
Damaged Products must be reported to Wholesaler’s customer service department as set forth in
Section 4.12 H, Goods Returned to Wholesaler, and applicable credits will be issued within three
(3) business days from receipt of the damaged item.
12.
Lost Products must be reported to Wholesaler’s customer service department as set forth in Section
4.12 H, Goods Returned to Wholesaler. Upon reconciliation, Wholesaler will apply credit for lost
items as applicable within three (3) business days.
13.
Wholesaler must have the ability to ship palletized deliveries via freight companies and must be
able to use large companies for dock deliveries instead of small couriers. Orders should be shipped
as ordered (by case or by pallet) to the facility so they can be properly unloaded and stored.
Wholesaler will ship palletized and case quantity orders on a weekly or twice monthly basis for all
distribution centers.
14.
MMCAP agrees to work with Wholesaler on abusive situations involving MMCAP Participating
Facilities which request special delivery vehicles or methods for routine deliveries.
B.
Drop Shipments
1.
All fees associated with Drop Shipments are listed in Attachment B, Discounts and Fees.
2.
The Wholesaler will act as a conduit to expedite and simplify the ordering and payment of drop
shipped Products.
3.
Unless approved by the MMCAP Participating Facility, Drop Shipments directly from product
suppliers for recurring orders are prohibited.
4.
Products requiring Drop Shipment must be easily identified in Wholesaler’s ordering system(s).
Wholesaler’s Drop Shipment Products are denoted in Cardinal.com and Order Express as DSHP.
5.
Timelines for the delivery of Drop Shipment Products will be made per the request of the MMCAP
Participating Facility (e.g., expedited shipment, standard delivery, etc). Wholesaler will place Drop
Shipment requests with manufacturers or suppliers within one (1) business day of receiving the
request from the MMCAP Participating Facility.
6.
In the event that Wholesaler is unable to fill an MMCAP Participating Facility’s order for an
MMCAP Contract Product, Wholesaler will have the Product drop shipped directly from the
manufacturer. The MMCAP Participating Facility will not be assessed a fee for this shipment.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
29
C.
Delivery for Special Products
1.
Wholesaler will maintain appropriate temperatures and environmental conditions in accordance
with manufacturer requirements for delivery to the MMCAP Participating Facilities. All
refrigerated Products will be shipped in returnable coolers with appropriate packaging to maintain
the required temperature range. Products requiring refrigeration will be clearly marked as such.
Wholesaler will use phase change panels to maintain orders at proper temperatures.
2.
All Products will be adequately packaged by Wholesaler. If an MMCAP Participating Facility
refuses Product that has been inadequately packaged, the MMCAP Participating Facility must notify
Wholesaler’s customer service department to log the complaint. Any costs associated with the
return of Product due to improper packaging or transport will be at the expense of the Wholesaler.
3.
Wholesaler will comply with all DEA requirements for controlled substances.
4.
Wholesaler must not distribute MMCAP Contract Products through associated specialty distributors
without the prior written approval of MMCAP or without the manufacturer requiring the Wholesaler
to do so. Wholesaler has a relationship with Cardinal Health 108, LLC d/b/a Specialty
Pharmaceutical Distribution (SPD). SPD is a wholly owned subsidiary of Cardinal Health, Inc.
MMCAP acknowledges that certain MMCAP-contracted suppliers have limited distribution
networks and that Cardinal SPD will be distributing these manufacturers’ products for MMCAP
Participating Facilities. Wholesaler is required to apply service fee/cost of goods discounts to any
MMCAP Contract Products distributed by Cardinal SPD, and ensure that MMCAP is paid the
distributor administration fee on same said products distributed by Cardinal SPD. Wholesaler is
also required to ensure that sales distributed by Cardinal SPD are included in the Sales Data Report,
as specified in Section 4.19 Mandatory Reporting.
5.
In the event a manufacturer charges Cardinal SPD for shipping due to an expedited request by an
MMCAP Participating Facility, Wholesaler will line item invoice the MMCAP Participating
Facility for the same shipping cost charged by the manufacturer
.
Backup documentation will be
available upon request for any shipping fees that are charged to the MMCAP Participating Facility
for products supplied by Cardinal SPD.
D.
Delivery of Bulky Items.
Bulky items are those products that may be exceptionally cumbersome to deliver. Examples of these
products may include cases of nutritional products, IV fluids, etc. In the event that the MMCAP
Participating Facility approves the Wholesaler’s request to have bulky items drop shipped, the product
manufacturer and drop-ship notification is to be annotated on the MMCAP Participating Facility’s order
confirmation.
Service fee/cost of goods discounts are required to be applied to orders for bulky items for which
MMCAP has a contract.
E.
Emergency Order, Placement and Delivery
Wholesaler’s procedure for placement of emergency orders during non-business hours will be made
available to each MMCAP Participating Facility upon startup of service. Each MMCAP Participating
Facility will be provided twelve (12) emergency orders annually free of charge. Any additional
emergency orders beyond the twelve per year that are free will be assessed a fee as detailed in
Attachment B, Discounts and Fees. An emergency order is defined as one necessary for immediate and
specific patient care which falls outside the normal order and delivery parameters. Using air and ground
options, Wholesaler will exhaust all resources in delivering emergency Product in the most timely and
efficient methods. Air services may be used at the discretion of the Wholesaler based on the severity of
the emergency situation. Wholesaler will make a good faith effort to make emergency deliveries within
four (4) hours following receipt of the order. OTC Products are not considered necessary for immediate
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
30
and specific patient care and therefore do not qualify for free emergency orders. Service fee discounts
will be applied to emergency orders as set forth in Attachment B, Discounts and Fees.
4.10 Pedigree
In the passage of the Drug Quality and Security Act (H.R. 3204) on November 27, 2013, Title II of the Act,
establishes a national system for tracing pharmaceutical products through the supply chain and sets national
licensing standards for wholesale distributors. This legislation preempts the current state pedigree and
serialization laws, however, as the Drug Quality and Security Act transitions, the Federal pedigree
requirements within the Prescription Drug Marketing Act (PDMA) are to remain in effect for the immediate
future.
The Wholesaler is required to comply with all aspects of Drug Quality and Security Act as it transitions, and
until January 1, 2015, to continue to comply with PDMA. During the interim period, from DSCSA being
passed, 11/27/13, until 1/1/15, the current federal minimum standards for the wholesale distribution of
prescription drugs apply, meaning PDMA remains in effect and can be enforced.
Cardinal Health is an
Authorized Distributor of Record for all prescription drugs distributed and is therefore not required to pass
pedigree under PDMA.
If any new transitions of the Drug Quality and Security Act which require change(s) to the current
pharmaceutical distribution procedure(s), a minimum of 30 calendar days’ notice of the change(s) will be
provided so MMCAP Participating Facilities can prepare. Wholesaler agrees to provide next day service for
those Products requiring a Pedigree.
As the Drug Quality and Security Act, Title II is a requirement upon wholesalers as a national licensing
standard, Wholesaler will not charge any fees throughout the term of this Contract and any extensions to
MMCAP or MMCAP Participating Facilities related to complying with this Act.
As part of the quarterly executive business review with MMCAP, the Wholesaler will be required to provide
updates on the Drug Quality and Security Act, Title II transition and how the Wholesaler is integrating
compliance aspects into its work deliverables to MMCAP Participating Facilities and MMCAP.
4.11 Contract Compliance
A.
On-Contract Purchasing
Wholesaler agrees to encourage MMCAP Participating Facilities to purchase MMCAP Contract Products.
Wholesaler must not condone or encourage in any way the purchase substitution of an MMCAP Contract
Product with that of a Non-Contract Product. To ensure overall MMCAP Participating Facility contract
compliance, Wholesaler may be asked to provide, at no cost to the MMCAP State Contacts in each state
served by the Wholesaler, a monthly report containing the following fields:
1.
MMCAP Participating Facility name
2.
Wholesaler account number
3.
Contract volume (in dollars) by facility
4.
Not-on-contract volume (in dollars) by facility
5.
Total volume (in dollars) amounts by facility
6.
Number of line items shipped to the facility
B.
Compliance Calculations
Wholesaler agrees to report contract compliance using MMCAP’s preferred calculations when requested by
MMCAP, MMCAP Participating Facilities, or any other entities designated by MMCAP.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
31
1.
Raw Contract Compliance:
MMCAP Contract Sales
a
Total Sales
b
a.
MMCAP Contract Sales: Products for which MMCAP has negotiated a contract
b.
Total Sales consist of MMCAP Contract Sales, Alternate Contract Sales, Wholesaler’s Generic
Drug Program pricing, and non-contract sales.
2.
Adjusted Contract Compliance:
MMCAP Contract Sales
a
+ Alternate Contract Sales
b
Total Sales
c
a.
MMCAP Contract Sales: Products for which MMCAP has negotiated a contract
b.
Alternate Contract Sales consist of Products purchased under the 340B Drug Pricing Program,
Products purchased from contracts individually negotiated by the MMCAP Participating
Facilities, and/or Products purchased from the Wholesaler’s Generic Drug Program.
c.
Total Sales consist of MMCAP Contract Sales, Alternate Contract Sales, and Non-Contract
Sales.
d.
In the event that an MMCAP Participating Facility has a 340B account, that portion of the
MMCAP Participating Facility’s business will be assigned a separate account number and
Contract Compliance will be calculated in the same manner for that account.
3.
Wholesaler will encourage the use of MMCAP Contract Products by providing training and services
to MMCAP Participating Facilities during the bid roll and throughout the term of this Contract.
4.
Cardinal.com and Order Express will offer “Contract Ranking” settings to assist MMCAP
Participating Facilities in color coding and sets a search result ranking bringing preferred contracts
to the top of the users search screen.
5.
In special situations where deemed necessary, Wholesaler will provide sub logic to MMCAP to
support corporate initiatives (e.g., market share agreements, contract switches and other potential
formulary initiatives).
6.
In the case where an MMCAP Participating Facility is denied contract pricing (e.g., vendor block),
Wholesaler agrees to send notification to MMCAP via e-mail (
mmcap.contracts@state.mn.us
).
C.
Reporting Tools
1.
Wholesaler agrees to provide online electronic access to all purchasing data relating to the Products
that are purchased by each MMCAP Participating Facility to MMCAP and MMCAP Participating
Facilities. Wholesaler will provide a system for reporting each individual MMCAP Participating
Facility’s purchases, as well as be capable of running reports on select groups of facilities. Users
must be able to manipulate the data to build reports based on each MMCAP Participating Facility’s
individual needs/requirements directly through the system or through the ability to transfer data into
spreadsheets in a Microsoft Office compatible format.
2.
Wholesaler agrees to provide each MMCAP Participating Facility and MMCAP either with
entelligence
SM
, a web-based reporting tool on Cardinal.com or Standard and Advanced Reporting on
Order Express. The
entelligence
SM
decision support tool rolls up purchase data from each of the
points of purchasing within an organization and provides comprehensive reporting to evaluate
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
32
purchasing (e.g., super-user). Report Writer is an ad hoc reporting tool that enables MMCAP
Participating Facilities to create, preview, save, copy, and print report requests. Report Writer will
also be made available to MMCAP’s Members and MMCAP. Advanced Reporting on Order
Express, largely replaces the
entelligence
SM
reporting tool, with enhanced capabilities. Standard
and Advanced Reporting on Order Express will be provided at no additional charge to MMCAP or
to MMCAP Members.
3.
At a minimum, Wholesaler will provide the following on-line reporting tools:
•
80/20 (Velocity) Purchase Summary Report: ranks items by sales value over a designated
period of time
•
Manufacturer Backorder reporting
•
Contract missed opportunities
•
Therapeutic interchange analysis
•
Brand-to-generic saving analysis
•
Budgetary forecasting and analysis
4.
Wholesaler will set up a user login on Wholesaler’s online ordering system(s) for each MMCAP
Member State and MMCAP with all MMCAP Participating Facility accounts for the purpose of
reporting at no cost.
5.
Wholesaler will provide the technology to allow one user (e.g., super-user) to run reports for several
MMCAP Participating Facilities’ accounts at one time.
4.12 Invoicing
A.
Order Invoice
1.
Wholesaler agrees that MMCAP Participating Facilities will be invoiced at the MMCAP contract price
for MMCAP Contract Products, plus or minus the negotiated service fee discount, throughout the term
of this Contract and any extensions. Service fee discounts will be applied to all Non-Contract Products
with the exception of Non-Contract Bulky Products, as set forth in Attachment B, Discounts and Fees.
2.
Wholesaler agrees that all service fee discounts will be in accordance with Attachment C, Service Fee
Discount Matrix.
3.
Wholesaler agrees that any fees besides cost for both MMCAP Contract Products and Non-Contract
Products will be listed on Attachment B, Discounts and Fees.
4.
Wholesaler will not add any fee, percentage, or other cost to the Products purchased under this Contract
unless the fee, percentage, or cost is defined and approved in writing by MMCAP prior to
implementation.
5.
Wholesaler will submit an invoice with each order. Invoices must be only for the amount of Product
delivered, not the amount ordered. Quantity ordered and quantity shipped must be based on the
packaging associated with the NDC number.
6.
MMCAP’s definition of Bulky Products include food and food products, home healthcare products
(durable medical equipment, such as walking aids, bathroom safety products, wheelchairs and
accessories, scooters and lift chairs, etc.), non-contract nutritionals, school and office supplies, non-
contract large volume parenterals, and non-contract IV Fluids. All service fee discounts and fees for the
delivery of Bulky Products are listed on Attachment B, Discounts and Fees. No fees or special handling
charges will be assessed for MMCAP contract nutritionals, MMCAP contract large volume parenterals,
or MMCAP contract IV fluids throughout the term of this Contract. Service fee discounts will be
applied to MMCAP Contract Products that are also Bulky Products, including MMCAP contract
nutritionals, MMCAP contract large volume parenterals, and MMCAP contract IV fluids, as set forth on
Attachment B, Discounts and Fees.
7.
Cardinal SPD is required to utilize the MMCAP contract price associated with MMCAP Contract
Products distributed through Cardinal SPD. If Cardinal SPD has the same NDC available through its
contracting as is contracted under MMCAP, Cardinal SPD will provide the CIN utilizing the MMCAP
contract pricing. Service fee discounts will be applied to MMCAP Contract Products that are drop
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
33
shipped through Cardinal SPD. Cardinal SPD is required to stock or make available those MMCAP-
contracted Blood Factor and MMCAP-contracted Plasma Products, ensuring primacy of these Contract
Product items. In a secondary placement, Cardinal SPD-contracted Blood Factor and Cardinal SPD-
contracted Plasma Products that are not MMCAP Contract Products will be billed at market price, as
communicated to the MMCAP Participating Facility prior to purchase.
8.
Any non-contract brand prescription product purchases will be invoiced at no more than WAC.
9.
All additional fees (e.g., service fees, shipping charges, emergency orders, etc.) charged by Wholesaler
will be in line item detail separated from the product’s cost and will be tied back to an original invoice
number. Wholesaler’s invoices have a memo field that is used to reference the original invoice in
instances where fees or credits are billed to the MMCAP Participating Facility. Wholesaler will
populate this memo field for all MMCAP Participating Facility orders, if applicable.
10.
Wholesaler agrees to work with facilities requesting customized invoices within 120 days of project
initiation. At no cost and upon request, Wholesaler will work with the MMCAP Participating Facility to
develop a customized invoice format. Wholesaler agrees to respond to all customized invoice requests
within 120 calendar days.
11.
At a minimum, the Wholesaler’s invoice will contain the following fields:
MMCAP Participating Facility Name
Wholesaler-assigned account number for the MMCAP Participating Facility
Invoice number
Invoice line number
MMCAP Participating Facility's purchase order number
Invoice date
Wholesaler’s SKU item number
NDC (11 digit)
Controlled substance classification
Product Name/Description
Packaging as associated with NDC number
Unit price
Quantity ordered
Quantity shipped
Extension (unit price multiplied by the quantity shipped)
Total invoice price
Type of transaction (MMCAP contract purchase, other contract purchase (e.g., 340B, off-
contract purchase))*
Service fee per line item
Bill to address
Ship to address
Applicable omit codes (e.g., Manufacturer Backorder, wholesaler temporarily out, manufacturer
discontinued, etc.)
12.
Wholesaler’s invoice note codes indicate the type of transaction and are as follows:
Code
Definition
T
Taxable
CT
Contract
G
Generic substitution
SN
Special net
CS
Source Contract
SP
Special pricing
OV
Price Override
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
34
13.
Wholesaler’s omit codes are:
Code
Definition
C
Dropship
2
DC out
3
Mfr out
4
Not stocked
5
Mfr disc
6
DC disc
7
Drug recall
8
New item/stock unavailable
9
Restricted item
B.
Invoice Rounding
Wholesaler is required to have invoicing procedures that follow standard rounding methodology. The
standard invoicing methodology will round down if the third digit after the decimal is 4 or less and round up
if the third digit after the decimal is 5 or more. Wholesaler agrees that any rounding will occur at the line
item.
C.
Credits and Rebills
1.
Wholesaler agrees to process and issue credits and rebills as manufacturer notifications are received. .
In the case of an invoice dispute, Wholesaler will issue credits/rebills within two (2) business days after
dispute resolution.
2.
Wholesaler will make credits and rebills available to each MMCAP Participating Facility online, with
the option to print a hard copy.
3.
Wholesaler will notify MMCAP Participating Facility of credit balances through a monthly report
showing all credits that were paid and any existing credit that is still available.
4.
Wholesaler will provide credits issued to MMCAP Participating Facilities without an expiration date,
and for all dollar amounts; credits will not be subject to a minimum amount.
5.
Wholesaler agrees that in the event of a facility closure or other extreme event where the MMCAP
Participating Facility will not be making another purchase through the Wholesaler, the MMCAP
Participating Facility may cash out its credit(s).
6.
Wholesaler agrees that if it is directed by an MMCAP Participating Facility, a credit can be transferred
from one account to another account.
7.
Wholesaler will clearly identify Credits as a credit.
8.
The Wholesaler will take all necessary steps to ensure that credits that become available close to the end
of the MMCAP Participating Facility’s Fiscal Year are available for use by the MMCAP Participating
Facility not later than five (5) business days prior to the end of the fiscal year.
9.
Wholesaler’s credit memo will contain:
a.
Original purchase order
b.
Original Wholesaler invoice number
c.
Original invoice date
d.
Itemized listing of the product(s) affected
e.
Any rebill associated with the credit
f.
Reason(s) for the credit (e.g., manufacturer credit, merchandise return, etc.)
g.
Net credit amount available to the MMCAP Participating Facility
10.
Wholesaler will clearly identify Rebills as a rebill. Rebilled invoices can be found online via
Cardinal.com through
entelligence
SM
(Standard Reports) or in Order Express (Standard Reports).
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
35
11.
Wholesaler’s rebill memo will contain:
a.
Original purchase order
b.
Original Wholesaler invoice number
c.
Original invoice date
d.
Itemized listing of the product(s) affected
e.
Credit memo associated with the rebill
f.
Reason(s) for the rebill (e.g., manufacturer chargeback denial, pricing error, etc.)
12.
Wholesaler agrees that rebills will reflect the net difference owed or due after any original credited
amount has been applied.
D.
Price Audits and Corrections
1.
In the event of a pricing error (e.g., late pricing load, etc.) that is solely attributable to the
Wholesaler, Wholesaler agrees to no longer process credit/rebills after the greater of 90 calendar
days or the maximum allowed by the supplier. Wholesaler agrees to actively pursue any available
remedies with suppliers on behalf of MMCAP Participating Facilities’ interests and agrees to seek
exceptions to supplier imposed limitations if necessary. This clause will in no way be deemed a
limitation on the Parties as it relates to the future auditing and/or correction of invoices.
2.
When Wholesaler, an MMCAP Participating Facility, MMCAP, or an MMCAP contracted service
vendor, like an invoice auditing service provider, discovers an error in pricing for an MMCAP
Contract Product that affects one MMCAP Participating Facility, Wholesaler will issue
credits/rebills to ALL MMCAP Participating Facilities for the time period from the date the error
began to the date it is corrected.
3.
Price Audits and Corrections: Throughout the terms of this Contract, Wholesaler will conduct
contract pricing audits matching pricing information provided by MMCAP against contract pricing
provided by Manufacturers. If Wholesaler discovers discrepancies, the Wholesaler will notify
manufacturer and MMCAP of the discrepancy in order to reach resolution. Upon resolution,
Wholesaler will correct the errors, will create a sales history report, and enter credit(s)/rebill(s) for
each MMCAP Participating Facility connected to the contracts within five (5) business days.
Wholesaler is expected to continue to provide the process, which was the outcome of the
collaboration between the Wholesaler and MMCAP, to deliver comprehensive and efficient means
to provide continuous price audit data.
4.
MMCAP and the MMCAP Participating Facilities acknowledge that if a pricing discrepancy is the
fault of the applicable manufacturer, such manufacturer may limit recovery arising from such
pricing discrepancy and Wholesaler will not have any responsibility for such discrepancy or any
such limitation.
E.
Chargeback Denials
MMCAP requires the Wholesaler to provide prompt electronic notification upon receipt by the Wholesaler
of a legitimate chargeback denials from manufacturers that have denied MMCAP Participating Facilities
contract pricing. Notification will be communicated to MMCAP via a notification from a member of the
Wholesaler’s Account Management team. Wholesaler will provide this notification within two (2) business
days of validation with the supplier. Wholesaler may require support from MMCAP to rectify eligibility
issues with MMCAP-contracted suppliers, and Wholesaler agrees to resubmit chargebacks for the MMCAP
Participating Facility upon eligibility resolution. Notifications are to be sent to:
mmcap.contracts@state.mn.us
.
F.
Invoice Disputes
Subject to state law, the MMCAP Participating Facility will notify Wholesaler of any known dispute with an
invoice within 30 calendar days of receipt of the invoice.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
36
The MMCAP Participating Facility will pay all portions of a disputed invoice, unless prohibited by state
law, subject to resolution of that dispute. If upon resolution, the disputed invoice was found to be in error,
Wholesaler will credit the original amount of the invoice and rebill the MMCAP Participating Facility.
Where complete payment of a disputed invoice is prohibited by an MMCAP Member State’s applicable
law(s), the Wholesaler will comply with requirements of that state’s law(s) related to disputed invoices. In
addition, Wholesaler agrees that any outstanding amount on a disputed invoice will not be held against the
MMCAP Participating Facility when calculating the weighted average payment date as applicable to service
fee discounts. For any disputed invoice, the Wholesaler agrees to code the invoice as disputed to ensure the
service fee calculation for the MMCAP Participating Facility is not impaired.
Wholesaler will make a good faith effort to resolve known disputes related to contract pricing within 30
calendar days of notice of the dispute. This clause will in no way be deemed a limitation on the Parties as it
relates to the future auditing and/or correction of invoices.
Where a disputed invoice is determined not to have been in error, the MMCAP Participating Facility will
not be liable for interest and penalties related to the disputed amount.
G.
810 EDI Invoices and Auditing
Wholesaler must provide 810 EDI invoices to MMCAP, MMCAP Participating Facilities, and any other
entity designated by MMCAP. Wholesaler is required to work with MMCAP’s contracted invoice auditing
vendor. Wholesaler will research product pricing that appears to have a discrepancy and will confirm that
pricing and information with the manufacturer. Wholesaler will review and make a reasonable effort to
resolve errors within ten (10) business days of notification from MMCAP-contracted invoice auditing
vendor. Wholesaler will not charge MMCAP or the MMCAP Participating Facility for use of an invoice
auditing service or for invoice dispute resolution. Wholesaler will issue credits/rebills within three (3) days
of manufacturer verification.
H.
Goods Returned to the Wholesaler
Goods returned to Wholesaler will be managed in accordance with Attachment D, Wholesaler’s Returned
Goods Policy.
I.
Recalls
If any Product distributed by the Wholesaler under this Contract is recalled or removed by the manufacturer
or the Wholesaler itself, or if a recall is suggested or mandated by a regulatory or official Agency,
Wholesaler will send notice to each ship-to location for which Wholesaler has a sales history within the
affected recall timeframe. Recall notices will be sent with the MMCAP Participating Facility’s next delivery
or via mail if the MMCAP Participating Facility does not have a delivery the day the recall notice is
released.
Depending on the class of the recall, Wholesaler will, after initiating a recall, send to any MMCAP
Participating Facility that did not provide Wholesaler verification they received the recall notice, a second
notice three weeks and/or six weeks after recall initiation.
Wholesaler will send recall notices to inactive MMCAP Participating Facilities that have ordered the
recalled Product up to 12 months after the last purchase.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
37
4.13 Purchase Orders and Payment
A. Purchase Orders
As a condition for purchasing under this Contract, purchasers must be MMCAP Participating Facilities in
good standing with MMCAP. Then, MMCAP Participating Facilities may purchase goods and services by
submitting Purchase Orders. MMCAP Participating Facilities may use their own forms for Purchase
Orders. To the extent that the terms of any form differ from the terms of this Contract, the terms of this
Contract supersede such conflicting or contrary terms.
B. Payments by MMCAP Participating Facility
Each MMCAP Participating Facility will be responsible for payment of goods and services provided to
them by the Wholesaler. MMCAP does not have any liability for an unpaid invoice of any MMCAP
Participating Facility. The Wholesaler is required to accept purchase orders and invoice the MMCAP
Participating Facility for all products shipped and services provided. Payment modalities that the
Wholesaler is minimally required to facilitate are checks and Automated Clearing House/Electronic Funds
Transfer (ACH/EFT) transactions. At time of new account setup, the MMCAP Participating Facility will
initiate ACH/EFT process with its bank.
Service fee discounts and payment term definitions are listed on Attachment C, Service Fee Discount
Matrix.
C. Verification of Authorized Purchasers
Upon request of MMCAP, Wholesaler must verify that it provides goods and services under this Contract
only to MMCAP Participating Facilities.
D. Funds available and authorized/non-appropriation
Wholesaler will not be compensated for goods delivered or services performed under a Purchase Order by
any entity other than the MMCAP Participating Facility that issued the Purchase Order. By submitting a
Purchase Order the MMCAP Participating Facility represents it has sufficient funds currently available and
authorized for expenditure to finance the costs of the Purchase Order.
E. Termination of Individual Purchase Orders
MMCAP Participating Facilities may terminate individual Purchase Orders, in whole or in part,
immediately upon notice to Wholesaler, or at such later date as the MMCAP Participating Facility may
establish in such notice, upon the occurrence of any of the following events:
a.
The MMCAP Participating Facility fails to receive funding, or appropriations, limitations or other
expenditure authority at levels sufficient to pay for the goods to be purchased under the Purchase
Order;
b.
Federal or State laws, regulations or guidelines are modified or interpreted in such a way that either
the purchase of goods under the Purchase Order is prohibited or the MMCAP Participating Facility
is prohibited from paying for such goods from the planned funding source; or
c.
Wholesaler commits any material breach of this Contract or a Purchase Order.
Upon receipt of written notice of termination, Wholesaler will stop performance under the Purchase Order
as directed by the MMCAP Participating Facility.
Termination of a standing Purchase Order does not extinguish or prejudice the MMCAP Participating
Facility’s right to enforce such Purchase Order with respect to Wholesaler's breach of any warranty or any
defect in or default of Wholesaler's performance under such Purchase Order that has not been cured,
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
38
including any right of the MMCAP Participating Facility to indemnification by Wholesaler or enforcement
of a warranty. If a standing Purchase Order is terminated, the MMCAP Participating Facility must pay
Wholesaler in accordance with the terms of this Contract for goods delivered and accepted by the MMCAP
Participating Facility.
F. Jurisdiction and Venue
Upon completion of the Dispute Resolution process outlined in Article 31 of this Contract, and solely with
the prior written consent of MMCAP and the State of Minnesota Attorney General’s Office, the MMCAP
Member may bring a claim, action, suit or proceeding against Wholesaler. The MMCAP Member’s
request to MMCAP to bring the claim, action, suit, or proceeding must state the initiating party’s desired
jurisdiction, venue and governing law.
Upon completion of the Dispute Resolution process outlined in Article 31 of this Contract, the Wholesaler
may bring a claim, action, suit or proceeding against MMCAP Member, in Wholesaler’s sole discretion.
G. Late Payment
This clause will not apply to an MMCAP Participating Facility when prohibited by that MMCAP
Participating Facility’s applicable state law.
If any MMCAP Participating Facility fails to comply with the agreed upon payment terms, Wholesaler will
have the right to change the Service Fee Discount to that which the MMCAP Participating Facility is
entitled to prospectively, to reflect that MMCAP Participating Facility’s actual payment practices. An
MMCAP Participating Facility will be deemed to have failed to comply with the payment terms if it does
not make timely payment for a period lasting two cycles or, with respect to MMCAP Participating
Facilities selecting the 30 Day Pay or 45 Day Pay, for a period of sixty (60) calendar days.
Wholesaler will use commercially reasonable efforts to work with the MMCAP
Participating Facility
in the
event payments are not timely made. Wholesaler may, at its election, either reduce payment terms to a
shorter number of days or place an MMCAP
Participating Facility
on C.O.D status under the following
circumstances: (i) if Wholesaler has not received payment of outstanding invoices in full as set forth above,
or (ii) there is a material adverse change in the financial condition of the MMCAP
Participating Facility
. In
either instance, the situation shall be immediately elevated to an executive team from both the MMCAP
Participating Facility
and Wholesaler in an effort to rectify the situation and restore the MMCAP
Participating Facility
's then current payment terms. In the event of such elevation, if the executives are
unable to reach a mutually acceptable resolution within a period of twenty (20) calendar days and any
undisputed amounts remain unpaid for more than ten (10) calendar days thereafter, Wholesaler reserves the
right to refuse orders from the MMCAP
Participating Facility
.
Notwithstanding anything to the contrary that may be contained herein, Wholesaler shall have, and it
hereby reserves, all the rights and remedies otherwise available to it under the Uniform Commercial Code,
as in effect from time to time.
4.14 Administrative Fee
In consideration for services provided by MMCAP, the Wholesaler will pay an administrative fee on all
purchases (less any credits and returns) made through Wholesaler and the Wholesaler’s Specialty Products
Distribution division, as specified in Attachment B. Administrative fees will not be paid on 340B, PHS, or
ADAP sales or prime vendor DSH sales. The administrative fee must be paid as soon as is reasonable after
the end of each month, but no later than 30 calendar days after the end of the month. The Wholesaler will
not pay MMCAP Member state specific administrative or procurement fees that are not considered “pass
through”. “Pass Through” fees are included in state specific terms and conditions requiring the Wholesaler
to increase Service Fees, and then passing them through in the form of a check to the designated State entity.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
39
MMCAP reserves the right to collect interest on payments 30 calendar days past due at a rate of 18%
annually, consistent with Minn. Stat. § 16A.124.
Wholesaler will submit monthly administrative fee data for all sales made through Wholesaler and the
Wholesaler’s Specialty Products Distribution division. All required administrative fee data files must be
sent to:
Mn.MMCAP@state.mn.us
at the end of each month, but no later than 30 days after the end of the
month. Failure to comply with this provision may constitute breach of this Contract.
4.15 MMCAP Service Contracts
A.
Contract Price Auditing
The Wholesaler is required to have the ability to provide 810 EDI invoices to MMCAP, MMCAP
Participating Facilities, and any other entity designated by MMCAP. It is expected that the Wholesaler will
work with MMCAP’s contracted invoice auditing vendor and that the Wholesaler will research product
pricing that appears to have a discrepancy and will confirm that pricing and information with the
manufacturer, making a reasonable effort to resolve errors within ten (10) business days of the notification
from MMCAP-contracted invoice auditing vendor. The Wholesaler will then be expected to issue
credits/rebills within three (3) days of manufacturer verification.
The Wholesaler will not charge any fees, to either MMCAP or the MMCAP Participating Facilities, for the
transmissions made to MMCAP’s contracted invoice auditing vendor.
B.
Reverse Distribution Processor
Wholesaler must have an agreement throughout this contract period with the MMCAP-contracted returned
goods processor(s) to allow all MMCAP Participating Facilities to fully participate in the services offered
by the MMCAP Returned Goods Contract. The Returned Goods Processor(s) is subject to change at any
time. The Wholesaler will not withhold or delay application of a credit from a returned goods processor to
the MMCAP Participating Facility’s account for any reason. Wholesaler will not withhold credit owed to
MMCAP Participating Facilities when the credit is from a manufacturer that is in arrears with the
Wholesaler. All fees associated with reverse distribution, including returns from alternate processors that
are not the awarded reverse distribution processing vendor for the MMCAP Returned Goods Program, are
listed on Attachment B, Discounts and Fees.
C.
Repackaging Services
Wholesaler is required to have an agreement throughout the term of the Contract period with the MMCAP-
contracted repackaging vendor(s) to allow all MMCAP Participating Facilities to fully participate in the
services offered by the MMCAP Repackaging Services Contract. It is expected that the Wholesaler will
have contracts with all MMCAP contracted repackaging vendor(s), and to note the Repackaging Services
vendor(s) is subject to change at any time.
Process Steps:
a.
The MMCAP Participating Facility notifies the Wholesaler that they would like to utilize an
MMCAP repackaging services contract.
b.
Once the Wholesaler is notified, the Wholesaler begins the set-up work with the identified
repackaging vendor.
c.
The repackaging vendor will then work directly with the MMCAP Participating Facility to qualify
their needs. Paperwork will be sent to the MMCAP Participating Facility and a list of the drugs that
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
40
that are being requested to have repackaged should be provided (NDCs, quantities, repackaging
format, etc.)
d.
Once the MMCAP Participating Facility has been qualified by the repackaging vendor and all
documentation is completed, the MMCAP Participating Facility will then request a new ship-to/bill-
to account be setup by the Wholesaler.
e.
The NDCs that are intended to be repackaged should be shared with the Wholesaler to ensure
stocking adjustments have been made at the distribution center that would be servicing the
repackaging vendor’s facility on behalf of the MMCAP Participating Facility.
f.
The Wholesaler would set up the new account to have all of the MMCAP Participating Facility’s
standard contracts and pricing applied.
g.
The MMCAP Participating Facility will make the determination if invoicing for the repackaging
services is to be through the Wholesaler or direct billed by the repackaging vendor.
h.
MMCAP Participating Facility places their first order through the new repackaging account once
fully setup and order-ready.
i.
Repacking vendor receives MMCAP Participating Facility’s order the next day from the Wholesaler
and processes the repackaging order according to the MMCAP Participating Facility requirements.
j.
The repackaging vendor then ships the product directly to the MMCAP Participating Facility via
UPS/FedEx.
k.
Invoicing is generated based on the determination made by the MMCAP Participating Facility.
While the Wholesaler can require a repackaging vendor to pay a fee to the Wholesaler for services
rendered, Wholesaler is not allowed to charge an additional fee to the MMCAP Participating Facility for
utilizing this service. However if the MMCAP Participating Facility has exceeded the free delivery quota
for the period of time applicable, the Wholesaler can charge a delivery fee in keeping with the delivery fee
associated with exceeding the free delivery quota for the specified period of time.
The set-up of the repackaging account should not impair any account limitations or incur any initial
account set-up fees to the MMCAP Participating Facility.
D.
Influenza Vaccine/Medical Supplies.
Both influenza vaccine distribution and medical supplies distribution are independent, separate service
offerings. It is required that reasonable efforts will be made by Wholesaler to direct MMCAP Participating
Facilities to MMCAP for guidance on these service offerings. Unless Wholesaler is also awarded one or
both of these other service offerings through a separate contract award processes, it is required that
Wholesaler will not solicit MMCAP Participating Facilities for influenza vaccine distribution and medical
supplies distribution service offerings.
4.16 Other Value-Added Services
A.
Wholesaler’s Generic Drug Program
Many MMCAP Members have state procurement mandates requiring the purchase of the lowest cost
product. Adherence to the requirement to stock MMCAP Contract Products is in place to support the
procurement mandates of MMCAP Members.
In addition to MMCAP Contract Products to support the procurement mandates of MMCAP Members
MMCAP expects the Wholesaler to provide a fluid warehousing approach whereby the Wholesaler will be
permitted to load its best-priced tier Generic Drug Program, offered side-by-side, in the stocking of like
products. This fluid approach would allow the MMCAP Participating Facilities to choose a product from
the Wholesaler’s generic drug program if the product was at a lower price than the MMCAP Contract
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
41
Product. The choice would be based on price, not on the Wholesaler’s generic drug product being the only
product stocked.
The fluid warehousing approach requires strict adherence the following conditions:
a.
The applicable MMCAP State Contact has not opted out of the Wholesaler’s Generic Drug
Program.
b.
Wholesaler is not allowed to use MMCAP’s contract pricing to calculate its Generic Drug
Program Pricing.
c.
For consistency in communicating program savings, if Wholesaler receives requests for
program savings, a demonstration of program savings, or cost avoidance regarding
Wholesaler’s generic drug program, Wholesaler is required to direct all inquiries to MMCAP.
d.
For consistency in communications in promoting Wholesaler’s generic drug program,
Wholesaler agrees to work with MMCAP on material content and potential co-branding.
e.
Wholesaler’s Generic Drug Program products may be ranked before MMCAP Contract
Products only if an MMCAP Participating Facility has set its ordering system to rank by price
and the price is lower than the MMCAP Contract Product. If an MMCAP Participating Facility
ranks by contract, then the MMCAP Contract Product must appear first.
f.
Wholesaler is required to clearly label any products on its Generic Drug Program as such in its
ordering system.
g.
Wholesaler is required to identify Wholesaler’s Generic Drug Program products as such when
Wholesaler reports sales data to MMCAP.
h.
Wholesaler will be required to pay a monthly administrative fee of 3% to MMCAP on all sales
of Wholesaler’s Generic Drug Program products sold to MMCAP Participating Facilities, in
addition to any distributor administrative fee payments.
i.
Service fee discounts extended to MMCAP Participating Facilities will be applied to all Generic
Drug Program sales.
j.
A complete list of products and pricing under the Generic Drug Program will be available for
viewing in Wholesaler’s ordering systems by MMCAP and MMCAP Participating Facilities.
k.
Products in Wholesaler’s Generic Drug Program available to MMCAP Participating Facilities
will be generic pharmaceuticals (including vitamins and over the counter products) and will not
contain medical supplies or health and beauty products, unless approved by MMCAP.
l.
Wholesaler will notify all MMCAP Participating Facilities participating in the Generic Source
program and MMCAP of switches in products covered under the Generic Source program.
m.
Wholesaler is required to only institute automatic substitution upon specific request of an
MMCAP Participating Facility and upon written notification by the Wholesaler to MMCAP.
n.
If the same NDC is the same price on both an MMCAP contract and on Wholesaler’s Generic
Drug Program, the sale will be applied to MMCAP.
o.
Wholesaler agrees to minimum stocking levels (three units/month) at each distribution center
for all MMCAP Contract Products, dependent upon MMCAP Participating Facility demand.
p.
Wholesaler is required to send MMCAP’s contracted invoice auditing vendor a weekly pricing
file that will include all the data necessary for the invoice auditing vendor to be able to audit the
pricing invoiced to MMCAP Participating Facilities.
q.
Wholesaler’s ordering system will have capability to accept an MMCAP Participating Facility’s
zero order. MMCAP Participating Facilities will need to call Customer Service to request
Wholesaler stock an MMCAP Contract Product.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
42
In order to audit compliance and non-competitiveness with the requirements above, Wholesaler must
provide a report on a monthly basis to MMCAP that details each product that is currently available on the
Wholesaler’s Generic Drug Program and the product price so that MMCAP can validate that the
Wholesaler’s Generic Drug Program is not competing with MMCAP Contract Products. The minimum
data fields required are listed below:
Minimum data fields required
NDC (11-digit format)
Wholesaler product identification number
SKU or Manufacturer’s part number
Product description (generic name)
Packaging
Supplier name (Manufacturer)
Quantity Purchased
Total Sales
Wholesaler’s Generic Drug Program Price per Unit
Wholesaler will not use MMCAP pricing or manufacturer contract terms in the Wholesaler’s generic pricing
program for any other use beyond managing the MMCAP Contract for MMCAP Participating Facilities, nor
will MMCAP use the Wholesaler’s pricing for the same purposes. Wholesaler and MMCAP will maintain
appropriate policies, procedures, and information technology and infrastructure to ensure that only those
employees of the Wholesaler and MMCAP that have a need to know for performance under this Contract
have access to product lists, discounts, prices, and any other information that would qualify as competitive
information in connection with the contracts, subject to Minn. Stat. Ch. 13.
B.
MMCAP Participating Facility Negotiated Contracts
There will likely be instances where MMCAP Participating Facilities may enter into contracts individually
negotiated by MMCAP Participating Facilities. In those instances, the Wholesaler is required to agree that the
ordering, delivery, payment, and reporting terms of the overlying contract with MMCAP will apply to contracts
individually negotiated by MMCAP Participating Facilities, including any associated service fees.
C.
Pharmacy Interfaces
Wholesaler’s pharmacy interfaces with software/dispensing systems will be developed and implemented at
no cost to the MMCAP Participating Facility. Training and technical support related to pharmacy interfaces
will be provided at no cost.
D.
Business Development
MMCAP Members benefit when opportunities to increase purchase volumes are optimized, as well as
creating business wins for MMCAP vendor partners. To strengthen current relationships and develop new
ones, MMCAP deploys Field Services staff to provide front-line support to current MMCAP State Contacts
and MMCAP Participating Facilities and to engage state eligible entities by explaining to them the benefits
available to them through leveraging the MMCAP membership contracts to their purchasing benefit. The
Wholesaler will support business development opportunities, utilizing joint engagement strategies with
MMCAP Field Services, to increase the use of the MMCAP contracts. Should said efforts place the
Wholesaler in a position where the Wholesaler would be in breach of contract with another business partner,
the Wholesaler can exempt themselves from a business development opportunity.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
43
E.
Supplemental/Additional Services
The Wholesaler must make supplemental/additional services and products that are available to its general
customers, not specifically mentioned within the resulting contract with MMCAP, available to all MMCAP
Participating Facilities upon request and agreement by MMCAP and the MMCAP Participating Facilities.
Wholesaler shall not solicit MMCAP Participating Facilities to participate in Wholesaler’s
supplemental/additional services and products programs, where such programs are already provided by
MMCAP to MMCAP Participating Facilities. Prior to providing these supplemental/additional services, the
Wholesaler must provide full disclosure of the services or product fees and costs to MMCAP and receive
approval from MMCAP before these services and products are provided to any MMCAP Participating
Facilities.
Supplemental/additional services and products offered by Wholesaler, if approved by MMCAP, will be
managed through an amendment to the Contract.
4.17 Business Interruption Plan
Wholesaler must have in-place during the term of this Contract, an emergency preparedness and business
continuity plan. Upon request, Wholesaler will work with the MMCAP Participating Facility to develop a
pre-selected list of Products that would be needed in the event of a national or regional emergency and
shipped upon availability. The Wholesaler’s emergency preparedness and business continuity plan is to
include specificity on how the Wholesaler will ensure that MMCAP Participating Facilities would continue
to receive medications during a regional/national disaster or other unforeseen malfunction in pharmaceutical
distribution. Wholesaler’s detailed Disaster Recovery Plan is available upon request from MMCAP or
MMCAP Participating Facilities.
As part of the Business Continuity Plan, Wholesaler will provide:
1.
Up to three backup locations for each distribution center
2.
Emergency customer support and centralized command and control centers
3.
Procedures for contacting employees
4.
Strong relationships with suppliers to maintain fuel supply in the event of a shortage
5.
Working relationships with government agencies and industry trade associations
4.18 Shareback Credits
Wholesaler will manage, at no additional cost or fee withheld to MMCAP or MMCAP Participating
Facilities, the MMCAP annual shareback credit according to the schedule below:
1.
MMCAP will provide Wholesaler a list of MMCAP Participating Facilities receiving a credit, the
credit amount for each facility, and a check for the total amount of all credits to be provided.
2.
Wholesaler is required to apply the credit to all listed MMCAP Participating Facilities within fifteen
(15) business days of the receipt of the funds and the list of facilities receiving credit has been
received from MMCAP.
3.
Within 30 business days of the receipt of the funds and the list of facilities receiving credit,
Wholesaler is required to provide to MMCAP an Excel Spreadsheet detailing the credit memo
information. This Excel listing must include the following fields: distribution center, account
number, facility name, facility address, facility city, facility state, DEA, HIN, date of credit memo,
credit memo number, and credit memo amount. In addition to supplying the credit memo detail to
MMCAP, the Wholesaler will also provide a listing of all accounts that are inactive that cannot have
a credit memo issued.
4.
Within 60 days of the date credits were applied and the inactive accounts are communicated as
stated in process step #3, MMCAP must provide W-9 documents to the Wholesaler for any facilities
found on the “Inactive Account” listing provide that expect to receive their credits in the form of a
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
44
check. All other outstanding credits will be refunded to MMCAP in the form of a check at the end
of the 60 day waiting period.
5.
The Wholesaler will work with MMCAP to identify all MMCAP Participating Facilities in an effort
to issue all credits before refunding dollars back to MMCAP. Prior to any funds returned to
MMCAP, written approval must be received from MMCAP.
6.
Within 15 business days of written approval for funds to be returned, Wholesaler is required to issue
a refund to MMCAP of the remaining dollars for which it was unable to issue credit.
7.
Upon initiating the refund to MMCAP, Wholesaler will provide a copy of the original Shareback
Credit spreadsheet detailing the credit information (received from MMCAP), the reason for non-
application of funds, and the dollar amount of the funds being returned to MMCAP.
Should MMCAP change its process for the Shareback Credit to a more frequent interval (semi-annual,
quarterly), any time during the term of this Contract, the Wholesaler will continue to manage this process as
a service inclusion, with no additional cost or fee withhold to MMCAP or MMCAP Participating Facilities.
4.19 Mandatory Reports
Wholesaler will provide the reports listed herein for all MMCAP Participating Facilities regardless of a
primary GPO affiliation other than MMCAP. Reports will not include pricing or other contract details for
GPO purchases not associated with MMCAP. Wholesaler agrees that any similar reports provided to other
GPOs for shared MMCAP Participating Facilities will not include MMCAP pricing or contract details.
Wholesaler is required to comply with specified formats, timing, and provision of all the reports listed in
this Section. Reporting is a wholesaler work product requirement, for which the Wholesaler will provide,
without additional cost to either MMCAP or MMCAP Participating Facilities.
1.
Reports provided to MMCAP:
A.
Sales Data Report
Wholesaler will supply to MMCAP accurate monthly sales data on or before the 10th day of the second
subsequent month (e.g., June’s data will be due July 10th). This report MUST include the following for
every transaction between the Wholesaler and the MMCAP Participating Facility, including those
transactions that come through the Wholesaler’s Specialty Products Distribution division:
i.
The first table details the required fields for the sales data report
ii.
The second table details the required record layout in fixed record format.
Required Data Field Full Name for Sales Data Report
MMCAP-assigned facility ID
MMCAP Facility Name
Vendor Distribution Center Code
Vendor-assigned Account number for the MMCAP Facility
Invoice Number
Invoice Line Number
Purchase Order Number
Invoice date (mmddccyy)
Buyer name or equivalent of buyer ID for person submitting the
invoices
Vendor's (distributor) SKU item number
NDC of purchased product in 5-4-2 format as stored in First DataBank,
Inc.
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
45
Required Data Field Full Name for Sales Data Report
Label Name
Unit Dose
Pack Size
Unit
Case Size
Dose
Strength
Route
Unit Price (99999.9999)
Quantity ordered (not Vendor repackaged or re-bundled
quantity)(999999.9999)
Quantity shipped (not Vendor repackaged or re-bundled quantity)
(999999.9999)
Extension (unit price multiplied by the quantity shipped) EXTENDED
PRICE (99999999.999)
Type of transaction (MMCAP contract purchase, other contract
purchase (340B,PHS), not on contract purchase) 1=contract item,
2=other contract, 3=not on contract
Bill to Address 1
Bill to City
Bill to State (2 alpha postal code)
Bill to Zip (standard 5-4 format, no dash necessary)
Ship to Address 1
Ship to City
Ship to State (2 alpha postal code)
Ship to Zip (standard 5-4 format, no dash necessary)
Service Fee (9999.9999)
MMCAP Contract Number (MMSxxxxx) or Generic Source Contract
Identifier
Admin fee for non-contract items (9999.9999)
Credit Indicator (C for credit)
MMCAP Assigned Wholesaler Code
(Codes will be assigned to
Wholesaler's during implementation period of the contract)
Manufacture Name (MFG Name)
Class of Trade
340b Purchase
Remainder of Page Intentionally Left Blank
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
46
Monthly Sales Data Usage Report - Fixed Length Fields
Required Data Field Full Name
Field Name
Data Type
Format (note
decimals are to be
included)
Size
Nulls
Begin
Column
End
Column
MMCAP-assigned facility ID
MMCAP_id
Alpha Numeric
7
1
1
7
MMCAP Facility Name
MMCAP_Name
Alpha Numeric
30
1
8
37
Vendor Distribution Center Code
DistributionCenter
Alpha Numeric
3
1
38
40
Vendor-assigned Account number for the MMCAP Facility
VendAccountNo
Alpha Numeric
10
1
41
50
Invoice Number
InvoiceNumber
Alpha Numeric
15
1
51
65
Invoice Line Number
InvoiceLineNo
Alpha Numeric
4
1
66
69
Purchase Order Number
poNumber
Alpha Numeric
15
1
70
84
Invoice date (mmddccyy)
InvoiceDate
numeric
mmddccyy
8
1
85
92
Buyer name or equivalent of buyer ID for person submitting the invoices
BuyerName
Alpha Numeric
20
1
93
112
Vendor's (distributor) SKU item number
SKU
Alpha Numeric
13
1
113
125
NDC of purchased product in 5-4-2 format as stored in First DataBank, Inc.
NDC
Alpha Numeric
999999999
11
1
126
136
Label Name
LabelName
Alpha Numeric
40
1
137
176
Unit Dose
UD
numeric
9
1
1
177
177
Pack Size
Pack_Size
numeric
99999.999
9
1
178
186
Unit
Unit
Alpha Numeric
2
1
187
188
Case Size
Case_Size
numeric
9999
4
1
189
192
Dose
D
Alpha Numeric
10
1
193
202
Strength
STR
Alpha Numeric
10
1
203
212
Route
RT
Alpha Numeric
10
1
213
222
Unit Price (99999.9999)
UnitPrice
numeric
99999.9999
10
1
223
232
Quantity ordered (not Vendor repackaged or re-bundled
quantity)(999999.9999)
QuantityOrdered
numeric
999999.9999
11
1
233
243
Quantiy shipped (not Vendor repackaged or re-bundled quantity)
(999999.9999)
QuantityShipped
numeric
999999.9999
11
1
244
254
Extension (unit price multiplied by the quantity shipped) EXTENDED
PRICE (99999999.999)
ExtendedPrice
numeric
99999999.999
13
1
255
267
Type of transaction (MMCAP contract purchase, other contract purchase
(340B,PHS), not on contract purchase) 1=contract item, 2=other contract,
3=not on contract
SaleType
Alpha Numeric
1
1
268
268
Bill to Address 1
billtoaddress1
Alpha Numeric
30
1
269
298
Bill to City
billtocity
Alpha Numeric
20
1
299
318
Bill to State (2 alpha postal code)
billtostate
Alpha Numeric
2
1
319
320
Bill to Zip (standard 5-4 format, no dash necessary)
billtozip
Alpha Numeric
9
1
321
329
Ship to Address 1
shiptoaddress1
Alpha Numeric
30
1
330
359
Ship to City
shiptocity
Alpha Numeric
20
1
360
379
Ship to State (2 alpha postal code)
shiptostate
Alpha Numeric
2
1
380
381
Ship to Zip (standard 5-4 format, no dash necessary)
shiptozip
Alpha Numeric
9
1
382
390
Service Fee (9999.9999)
ServiceFee
numeric
9999.9999
9
1
391
399
MMCAP Contract Number (MMSxxxxx)
contractnumber
Alpha Numeric
10
1
400
409
Admin fee for not-on-contract items (9999.9999)
AdminFee
numeric
9999.9999
9
1
410
418
Credit Indicator (C for credit)
CreditIndicator
Alpha Numeric
1
1
419
419
MMCAP Assigned Wholesaler Code (AmeriSource-Bergen=0401, Cardinal
Health=0301, Morris-Dickson=0701, Bergen=0201,
(New codes will be
assigned to PPV's during implementation period of the contract)
WholeCode
Alpha Numeric
4
0
420
423
Manufacture Name (MFG Name)
MfgName
Alpha Numeric
40
1
424
463
Class of Trade
ClassofTrade
Alpha Numeric
4
1
464
467
340b Purchase
340b
Alpha Numeric
1
1
468
468
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
47
B.
Monthly Payment Report
Wholesaler will provide to MMCAP accurate monthly payment data on or before the 10th
day of the second subsequent month (e.g., June’s data will be due July 10th).
1.
The first table details the required fields for the monthly payment report
2.
The second table details the required record layout in fixed record format.
MMCAP Payment Data Fields
MMCAP-assigned facility ID
MMCAP Facility Name
Vendor-assigned Account number for the MMCAP
Facility
Invoice Number
Invoice Line Number
Purchase Order Number
Vendor's (distributor) SKU item number
NDC of purchased Product in 5-4-2 format as stored in
First DataBank, Inc.
Payment Due Date (mmddccyy)
Label Name
Packaging as associated with NDC Number
Date Payment Credited to Account (mmddccyy)
Quantity Purchased-must be expressed in terms of the
packaging associated with the NDC (not Vendor
repackaged or re-bundled quantity) (999999.9999)
Dollar Amount of Transaction-to the third decimal.
The dollar amount must be the actual acquisition cost,
after any discounts and service fees.
Credit Indicator (C for credit)
ID for person making the payment
Remainder of Page Intentionally Left Blank
Attachment A Scope of Work – Cardinal MMCAP Contract No.:
MMS15001
Cardinal
ATTACHMENT A
48
Record Layout for the Monthly Payment File - Fixed Length Fields
Long Name (from original MMCAP
Contract
)
Field Name
Data Type
Format
(note decimals
are to be
included)
Size
Nulls
Begin Column
End Column
MMCAP-assigned facility ID
MMCAP_id
Alpha Numeric
7
1
1
7
MMCAP Facility Name
MMCAP_Name
Alpha Numeric
30
1
8
37
Vendor-assigned Account number for the MMCAP Facility
VendAccountNo
Alpha Numeric
10
1
38
47
Invoice Number
InvoiceNumber
Alpha Numeric
15
1
48
62
Invoice Line Number
InvoiceLineNo
Alpha Numeric
4
1
63
66
Purchase Order Number
poNumber
Alpha Numeric
15
1
67
81
Vendor's (distributor) SKU item number
SKU
Alpha Numeric
13
1
82
94
NDC of purchased Product in 5-4-2 format as stored in First
DataBank, Inc.
NDC
numeric
99999999999
11
1
95
105
Payment Due Date (mmddccyy)
DueDate
numeric
mmddccyy
8
1
106
113
Label Name
LabelName
Alpha Numeric
40
1
114
153
Packaging as associated with NDC Number
Packaging
Alpha Numeric
16
1
154
169
Date Payment Credited to Account (mmddccyy)
PaymentCDate
numeric
mmddccyy
8
1
170
177
Quantity Purchased-must be expressed in terms of the
packaging associated with the NDC (not Vendor repackaged
or re-bundled quantity) (999999.9999)
QuantityOrdered
(Shipped)
numeric
999999.9999
11
1
178
188
Dollar Amount of Transaction-to the third decimal. The
dollar amount must be the actual acquisition cost, after any
discounts and service fees.
TranDollar
numeric
99999999.999
13
1
189
201
Credit Indicator (C for credit)
CreditIndicator
Alpha Numeric
1
1
202
202
ID for person making the payment
BuyerName
Alpha Numeric
20
1
203
222
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 49
Attachment A
C.
Kill/Fill Report
Wholesaler will provide to MMCAP accurate kill/fill data on or before the 10th day of the
second subsequent month (e.g., June’s data will be due July 10th). This data must be provided in
an Excel format and be submitted electronically to mn.multistate@state.mn.us. The following
table details the required fields for the Kill/Fill data report:
Field Long Name
MMCAP ID
Customer Name
PPV Customer DC Number
Customer Distribution Center
PPV Customer Number
Address
City
State
NDC of Product in 5-4-2 format as stored in First
DataBank
Invoice Number
Invoice Date
Short Reason Code
Short Reason Description
Product Trade Name
Product Generic Name
Pack Qty
Pack Size
Order Quantity
Shipped Quantity
Killed Qty
Extended Sales
Remainder of Page Intentionally Left Blank
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 50
Attachment A
D.
Contract Change Report
Wholesaler will provide to MMCAP accurate Contract Change data on or before the first day of
each week. This data must be provided in an Excel format (may be zipped) and be submitted
electronically to
mn.multistate@state.mn.us
. The table below details the required fields from the
Contract Change Report. This report must include the following for every Product added to,
changed, or deleted from the MMCAP contract.
Long Field Description Name – Contract Change Report
MMCAP Office Assigned PPV Number
Contract Start Date
Contract End Date
Pharmaceutical Manufacturer Contract Number
Vendor Product ID Number
Pharmaceutical Manufacturer
Description
NDC (11 digit format)
Packaging
Current Price
Previous Price
Effective Date
Change Type (e.g., price increase, price decrease, NDC change,
etc.)
E.
Contract File Audit Report
Wholesaler will provide to MMCAP accurate contract data on or before the first day of each
week. This data must be provided in an Excel format (may be zipped) and be submitted
electronically to mn.multistate@state.mn.us. The table details the required fields for the
Contract Audit Report. This report MUST include the following for every product loaded and
attached to the MMCAP contract:
Long Field Description Name – Contract Audit Report
Vendor Name
MMCAP Contract Number
Product Item Unit Number
NDC of Product in 5-4-2 format as stored in First DataBank
Manufacturer
Item Description
Vendor Reference Contract Number
Size
Form
UOM
MMCAP Contract Cost
Contract Start Date
Contract End Date
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 51
Attachment A
F.
Off-Contract with Alternative On-Contract Report
Wholesaler will provide to MMCAP accurate Off-Contract with Alternative Item On-Contract
report on or before the 10
th
day of the subsequent month (e.g., June’s data will be due on July
10
th
). This report must be provided in an Excel format and be submitted electronically to
mn.multistate@state.mn.us. The table details the required fields for the Off-Contract with
Alternative On-Contract Report. This report MUST include the following for every transaction
where an MMCAP Contract Product was available for an off-contract purchase:
Field Long Name – Off-Contract with Alternate
On-Contract Report
MMCAP ID
Customer Name
PPV Customer DC Number
Customer Distribution Center
PPV Customer Number
Address
City
State
NDC of Product in 5-4-2 format as stored in First
DataBank Off Contract
Product Generic Name
Product Trade Name
Pack Size
Order Quantity
Cost
NDC of Product in 5-4-2 format On
MMCAP
contract
Product Generic Name
Product Trade Name
Pack Size
Cost
Difference in price from off contract to on contract
Remainder of Page Intentionally Left Blank
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 52
Attachment A
G.
Raw and Adjusted Fill Rate Report
Wholesaler will provide to MMCAP a Raw and Adjusted Fill Rate Report. The Raw and
Adjusted Fill Rate Report must be received on or before the 10
th
day of the subsequent month
(e.g., June’s data will be due on July 10
th
). The table details the required fields for the Raw and
Adjusted Fill Rate Report. This report must be provided in an Excel format and be delivered
electronically to mn.multistate@state.mn.us. This report MUST include the following fields:
Field Long Name – Raw and Adjusted Fill Rate
Report
MMCAP ID
Customer Name
PPV Customer DC Number
Customer Distribution Center
PPV Customer Number
Address
City
State
Raw Fill Rate
Adjusted Fill Rate
H.
Wholesaler Participating Facility Listing
Wholesaler will provide a listing to MMCAP of the MMCAP Participating Facilities attached to
the MMCAP contract on or before the 10th day of the subsequent month (e.g., June’s data will
be due on July 10th). The data must be submitted electronically to mn.multistate@state.mn.us.
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 53
Attachment A
I.
Manufacturer Backorders
Wholesaler will provide to MMCAP, at a minimum, weekly a listing of all MMCAP Contract
Products backordered due to the manufacturer’s inability to supply the Product. The report is to
be delivered the first business day of each week. The Excel report must be delivered
electronically to
mn.multistate@state.mn.us
and any other sources MMCAP designates (e.g.,
current vendor hosting MMCAP’s online catalog).
Manufacturer is to be spelled out, no abbreviations.
NDC – 11 digit format as defined in First Data Bank
J.
Discontinued Product Report.
A monthly, or more frequent, report detailing MMCAP Products which the Wholesaler deems to
be discontinued. This report must identify reason for discontinuation (e.g. manufacturer
discontinued, wholesaler discontinued, etc.). A monthly frequency reporting cycle is to be
provided on or before the 10th day of the subsequent month (e.g., June’s data will be due on July
10
th
) and the Excel report must be delivered electronically to mn.multistate@state.mn.us . The
table below details the required fields from the Discontinued Product Report:
Remainder of Page Intentionally Left Blank
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 54
Attachment A
K.
Service Level Report.
Monthly report detailing service levels provided on or before the 10th day of the subsequent
month (e.g., June’s data will be due on July 10
th
) and the Excel report must be delivered
electronically to
mn.multistate@state.mn.us
. The table below details the required fields from the
Service Level Report:
L.
Service Fee Discount Report.
Quarterly report detailing applicable Service Fee Discount for each MMCAP Participating
Facility based on payment terms and purchase volume. Report is to be provided not later than
the 20
th
of the month following the end of the quarter for an effective date of the last day of the
month following the end of the quarter. For example, Q1 of a fiscal year is July – September.
The updated Service Fee Discount report is due to MMCAP not later than October 20
th
, for an
effective date change of October 31
st
. The Excel report must be delivered electronically to
mn.multistate@state.mn.us . The table below details the required fields for the Service Fee
Discount (COG) report:
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 55
Attachment A
M.
MMCAP Participating Facility Credit Report
Quarterly report detailing credits available to MMCAP Participating Facilities by account
number. The report must be submitted electronically to mn.multistate@state.mn.us and is due by
the 15
th
of the month, following the end of the quarter.
Report Requirements
MMCAP Participating Facilities Number
Facility Name
Facility State
DC
Wholesaler Account Number
Credit Issue Date
Credit Balance
N.
Miscellaneous Fees Charged to MMCAP Participating Facilities
Wholesaler will provide a monthly report to MMCAP of any miscellaneous fees charged to MMCAP
Participating Facilities
which are not related directly to Product cost or not specified in Attachment B.
Report is to be submitted on or before the 10th day of the subsequent month (e.g., June’s data
will be due on July 10
th
) and the Excel report must be delivered electronically to
mn.multistate@state.mn.us.
Report Requirements
MMCAP Participating Facility Number
Facility Name
Facility State
DC
Wholesaler Account Number
Invoice Number
Invoice Date
Amount Charged
Description of Charge
2.
MMCAP Member Reporting:
The following reports, are the minimum reporting requirements for the Wholesaler to make
available to all MMCAP Members and these reports are to be made available online in printable
copy and electronic/exportable formats (e.g., Excel).
If the Wholesaler has multiple levels of reporting packages, it is required that the Wholesaler
allow MMCAP Participating Facility access to any and all reporting, whether standard, advance
or analytics type of reporting, provide support to train both general and super-user of the
reporting tools, as well as set-up support for super-user account structures for appropriate
MMCAP Member oversight. These tools, regardless of level (standard, advance, analytics)
must be provided to MMCAP Members at no additional cost for the full term of the Wholesaler
Distribution Services Contract
If applicable, reports must be sortable by generic or label name, units, date range, or dollars.
Additionally, units reported must correspond to the packaging associated with the NDC.
Attachment A Scope of Work – Cardinal MMCAP Contract Number
MMS15001
Cardinal Health 56
Attachment A
Wholesaler is required to meet the reporting requirements for frequency (e.g., daily, monthly,
quarterly, annually, etc.), using on-line tools for generating frequency specified reporting or ad
hoc reporting options. All reporting is required to accurate for all reporting types. Standard,
aggregated, and enhanced reports are to including but are not limited to the following:
a.
Reports detailing total purchases (payment amount and units) by individual item (e.g.,
NDC, SKU, supplier, generic name, and/or label name);
b.
Cost savings reports associated with the use of either MMCAP Contract Products or other
alternative contracts (should be compared to relevant retail pricing);
c.
Reports displaying purchases of controlled substances and the associated invoice and/or
purchase order numbers along with MMCAP Participating Facility name, account
number, NDC number, invoice number, invoice line number, label name, date shipped,
amount paid, date payment credited, FDA schedule category, and DEA number;
d.
Velocity (80/20) report (fastest moving and highest dollar) containing forecasted velocity
codes with order points and order quantities; contains cumulative percentages;
e.
Price change report, indicating products with price changes; includes percentage change
in price;
f.
Physical inventory reports sorted by American Hospital Formulary Service (AHFS)
pharmaceutical category. These reports must show the label name, NDC, quantity, cost
per unit and the extended cost of the product units on hand;
g.
Drug usage (amount paid and units) reports by AHFS category. Percentages for each
category must be provided. MMCAP Participating Facilities must be able to select all
AHFS categories as well as select specific AHFS categories;
h.
A report detailing all items that were ordered, but that will not be delivered, provided to
the MMCAP Participating Facility the same day the order is generated by the same
method that the order was transmitted;
i.
Manufacturer backorder reports, identifying where products were not available due to
manufacturers’ inability to supply that captures all product alternatives purchased in its
place;
j.
Product category breakdown reports, which display total procurement dollar volume for
categories such as brand, generic, OTC, 340B, contract, non-contract, etc.;
k.
Invoice reports, selected by invoice number, account number, purchase order number, or
at billing statement intervals;
l.
On- and off- contract reports that display total dollars spent on and off contract; MMCAP
Members should be able to drill down into item purchases;
m.
Off-contract purchases with contract alternatives report; and
n.
Any other reports required by law.
Balance of Page Intentionally Left Blank
Attachment B – Discounts and Fees Cardinal MMCAP Contract MMS15001
Page | 1
ATTACHMENT B
DISTRIBUTOR ADMINISTRATIVE FEE
(Payable by Wholesaler to MMCAP)
0.40% will be paid to MMCAP on all MMCAP Member purchases (less any credits and
returns) made through the Wholesaler under this Contract (the Distributor Administrative
Fee applicable to MMCAP Members continuing to purchase under the prior contract will
continue to be equal to 0.32% until such time such MMCAP Members transition to this
Contract or terminate their relationship with Distributor). Distributor Administrative fees
will not be paid on Prime Vendor 340B Drug Pricing Program Sales or Prime Vendor DSH
sales.
OTHER FEES
(Payable by MMCAP Member To Wholesaler)
1.
Deliveries
Deliveries
Routine
Emergency
Regardless of
dollar volume
5 per week
12 per year
a.
If a member requires more deliveries beyond the allotments specified for
routine and emergency deliveries, the Wholesaler will pass on the cost of the
delivery to the member.
b.
There will be no charges for the delivery of MMCAP Contract or Non-
Contract Bulky Products so long as the delivery falls within the MMCAP
Member’s normal delivery schedule.
c.
Wholesaler will not assess a delivery fee to an MMCAP Member for drop
shipped deliveries, unless delivery charges are passed onto Wholesaler by the
supplier.
d.
Wholesaler will not assess a delivery fee to an MMCAP Member for Specialty
deliveries, unless delivery charges are passed onto Wholesaler/SPD by the
supplier.
e.
Wholesaler will not access delivery fee to an MMCAP Member for products
shipped to MMCAP’s contracted repackaging vendor(s), unless delivery
charges are passed onto the Wholesaler by the repackager.
f.
Control substances shipping – if held to be shipped with MMCAP Member’s
regular order and not shipped with regular order, there will be no charge to the
Member to ship it and there will be no impairment to the weekly allotment.
2.
MMCAP Service Contracts
Service
Fees
Contract Price Audit
No Charge
Reverse Distribution
No Charge
Repackaging*
No Charge
*Note 1.e. on Delivery charges.
Attachment B – Discounts and Fees Cardinal MMCAP Contract MMS15001
Page | 2
3.
Reporting
Reporting
Standard
Advanced Reporting
No
Charge
No Charge*
*The value of such advanced reporting programs ($99 per month for six (6) dashboards; $30 per
month for individual dashboards) constitutes a "discount or other reduction in price," as such
terms are defined under the Medicare/Medicaid Anti-Kickback Statute (42 U.S.C. §
1320a-7b(b)(3)(A) and the "safe harbor" regulations regarding discounts or other reductions in
price set forth in 42 C.F.R. § 1001.952(h)), on the products purchased by MMCAP Members
under the terms of this Contract. MMCAP Members may have an obligation to accurately
report, under any state or federal program which provides cost or charge based reimbursement
for the products or services covered by this Contract, or as otherwise requested or required by
any governmental agency, the net cost actually paid by MMCAP Members. In lieu of accepting
this free service, MMCAP Members may elect to pay for such advanced reporting programs, at
the rates set forth above. Upon request of MMCAP, Wholesaler agrees to provide a list of
MMCAP Members utilizing advanced reporting programs and whether or not they have elected
to pay for the service.
4.
Inventory Support
Inventory Support
Fees
Restocking Fee
Returns subject to specific requirements outlined within
Attachment D (Wholesaler’s Returned Goods Policy).
Shelf Labels
No Charge
On-site support of
physical inventory
No Charge
Telxon or similar
device
Price per Device
•
Telxons: No Charge
•
MC 1000 – Long Term Lease, minimum 3 month requirement,
$25/month or $250 per year
•
Physical Inventory
-
Single Unit, 1 docking station $50
-
Small Bundle, 4 handhelds, 1 docking station $150
-
Large Bundle, 6 handhelds, 2 docking stations $250
•
MC 40 – Long Term Lease $100/month
Attachment C Service Fee Discount Matrix Cardinal MMCAP Contract MMS15001
Page | 1
ATTACHMENT C
Table 1: Service Fee Discount Pricing Matrix
State Monthly Purchase Volume
Facility
Payment Terms
$1 to
$500,000
$500,001
to
$1,000,000
$1.000,001 to
$2,000,000
$2,000,001 to
$5,000,000
$5,000,001 to
$8,000,000
$8,000,000 to
$12,500,000
$12,500,001
and Above
30 Day Pre-Pay
-4.69%
-5.07%
-5.56%
-5.86%
-6.07%
-6.32%
-6.54%
15 Day Pre-Pay
-4.45%
-4.83%
-5.32%
-5.62%
-5.83%
-6.08%
-6.30%
7 Day Pre-Pay
-4.32%
-4.70%
-5.19%
-5.49%
-5.70%
-5.95%
-6.17%
Next Day Pay
-4.19%
-4.57%
-5.06%
-5.36%
-5.57%
-5.82%
-6.04%
7 Day Net
-4.10%
-4.48%
-4.97%
-5.27%
-5.48%
-5.73%
-5.95%
15 Day Net
-3.97%
-4.35%
-4.84%
-5.14%
-5.35%
-5.60%
-5.82%
30 Day Net
-3.73%
-4.11%
-4.60%
-4.90%
-5.11%
-5.36%
-5.58%
45 Day Net
-3.33%
-3.71%
-4.20%
-4.50%
-4.71%
-4.96%
-5.18%
60 Day Net
-2.92%
-3.30%
-3.79%
-4.09%
-4.30%
-4.55%
-4.77%
90 Day Net
-2.11%
-2.69%
-2.98%
-3.28%
-3.49%
-3.74%
-3.96%
Generic Source Program Opt-Out:
Wholesaler will adjust the Service Fee Discount by 0.40% for those MMCAP Members that notify
MMCAP of their decision to opt-out of allowing the Wholesaler to attach the Wholesaler’s Generic
Source program.
For example, an MMCAP Member notifying MMCAP of an opt-out decision to the attachment of the
Wholesaler’s Generic Source program, having an average pay date of 7 Day Net Pay and a state monthly
purchase volume of $2 Million to $5 Million, the Service Fee Discount for this MMCAP Member would
decrease from -5.27% to -4.87% .
Table 2: Annual Volume Incentive:
MMCAP Volume Per Year*
Additional Service Fee Discount
$750,000,000 to $999,999,999 10 Basis Points (-0.10%)
$1,000,000,000 and above
20 Basis Points (-0.20%)
*
Total book of business between MMCAP and Wholesaler
The following payment term options shall be available to each MMCAP Member:
30 Day Pre-pay: A one-time deposit equal to 30 days purchase value is due by the 25th of the previous
month. Thereafter, payment is due on or before seven calendar days from the date of invoice.
15 Day Pre-pay: A one-time deposit equal to 15 days purchase value is due by the 25th of the previous
month. Thereafter, payment is due on or before seven days from the date of invoice.
Attachment C Service Fee Discount Matrix Cardinal MMCAP Contract MMS15001
Page | 2
7 Day Pre-pay: A one-time deposit equal to 7 days purchase value is due by the 25th of the previous
month. Thereafter, payment is due on or before seven days from the date of invoice.
Next Day Net: Next Day Net means that the buyer will pay Wholesaler in full on or before the next
calendar day of when the invoice is received by the buyer.
Seven (7) Day Net: 7 Day Net means that buyer will pay Wholesaler in full on or before the 7th calendar
day of when the invoice is received by the buyer.
Fifteen (15) Day Net: 15 Day Net means that buyer will pay Wholesaler in full on or before the 15th
calendar day of when the invoice is received by the buyer.
Thirty (30) Day Net: 30 Day Net means that buyer will pay Wholesaler in full on or before the 30th
calendar day of when the invoice is received by the buyer.
Forty-Five (45) Day Net: 45 Day Net means that buyer will pay Wholesaler in full on or before the 45th
calendar day of when the invoice is received by the buyer.
Sixty (60) Day Net: 60 Day Net means that buyer will pay Wholesaler in full on or before the 60th
calendar day of when the invoice is received by the buyer.
Ninety (90) Day Net: 90 Day Net means that buyer will pay Wholesaler in full on or before the 90th
calendar day of when the invoice is received by the buyer.
If any of the above-specified Payment Term due dates fall on a weekend day or local, state, or federal
holiday, payment will be due on the on the preceding business day.
Each MMCAP Member may select one of the payment term options indicated above by indicating its
selection to Wholesaler. At any time during the term of this Contract, an MMCAP Member may change
its manner of paying the Wholesaler upon thirty (30) days' prior written notice to Wholesaler.
Wholesaler will accept Electronic Funds Transfer (EFT) for payment, but does not offer any additional
discounts for paying by EFT.
Wholesaler will apply service fee discounts to all emergency deliveries.
Wholesaler will apply service fee discounts to all MMCAP Contract Products. Service fee discounts will
be applied to MMCAP Contract Products that also meet the definition of Bulky Products. Service fee
discounts will be applied to Non- Contract Products, (including Wholesaler’s Generic Drug Program
Products), with the exception of Non-Contract Products that also meet the definition of Bulky Products.
Service fee discounts will not be applied to Non-Contract Bulky Products.
Service fee discounts will be applied to MMCAP Contract Drop Shipments. Service fee discounts will be
applied to Non-Contract Products that must be drop shipped due to a Vendor-created Stock Outage
(excluding cases where the manufacturer is unable to supply the MMCAP Contract Product). Service fee
discounts will be applied to Non-Contract Drop Shipment Products that do not meet the definition of
Bulky Products.
Attachment C Service Fee Discount Matrix Cardinal MMCAP Contract MMS15001
Page | 3
Service fee discounts will be applied to MMCAP Contract Products that are drop shipped through SPD.
SPD contracted Blood Factor and SPD-contract Plasma Products that are not MMCAP Contract Products
will be billed at market price as communicated prior to the purchase.
The purchase price for the below listed items are not subject to the standard Service Fee Discount Pricing
Matrix, and will instead be priced according to the below Service Fee Discount, unless an MMCAP
Member’s applicable Service Fee Discount is lower, in which case, the lower Service Fee Discount will
be applied. For example if an MMCAP Member’s applicable Service Fee Discount is -2.11%, such
Member’s Service Fee Discount applicable to its purchases of Sovaldi® will be -2.11%, not -2.60%
(Olysio® will be -2.10%). Wholesaler reserves the right to negotiate with MMCAP adjustments to
Service Fee Discounts applied to brand pharmaceutical products launched after October 1, 2014. If
Wholesaler and MMCAP are unable to come to an agreement on the applicable Service Fee Discount for
any brand pharmaceutical product launched after October 1, 2014, Wholesaler will sell any such product
that is an MMCAP Contract Product at the MMCAP Contract Price (i.e., no Service Fee Discount to be
applied), or for any such product that is a Non-Contract Product, at a price equal to no more than WAC
(i.e., no Service Fee Discount to be applied).
Table 3: Service Fee Discount Exceptions
Product
Service Fee Discount
Sovaldi® (Sofosbuvir 400MG TAB)
-2.60%
Olysio® (Simeprevir 150MG CAP)
-2.10%
Table 4: Application of Service Fee Matrix:
Application of Service Fee Matrix
Yes
No
MMCAP Contract Products
X
MMCAP Contract Bulky Products
X
MMCAP Contract Products Drop Shipped
X
MMCAP Contract Product for which due to
Wholesaler stocking error, must be Drop
Shipped to meet the needs of the MMCAP
Member
X
Wholesaler’s Generic Source Program
X
Non-Contract (Generic/Brand)
X
Non-Contract Bulky Products
X
Service fee discounts are based on the previous quarter s’ payment performance and sales volume for
each MMCAP Member. Wholesaler will be allowed to change MMCAP Members’ service fee discounts
four times annually within 30 calendar days after the close of each fiscal quarter (e.g., service fee
discounts for January through March must be changed by April 30). If Wholesaler does not make
changes to the service fee discounts within 30 calendar days, Wholesaler will be required to make the
changes that positively impact MMCAP Members and backdate those changes to the first day of the
quarter, but will not be allowed to make changes to those accounts that are negatively impacted until the
next fiscal quarter.
Attachment C Service Fee Discount Matrix Cardinal MMCAP Contract MMS15001
Page | 4
Wholesaler will provide MMCAP a draft of the proposed service fee discount changes for all MMCAP
Members ten (10) business days prior to the date the changes will take effect. If MMCAP identifies any
errors in the proposed service fee discounts, Wholesaler will resolve any concerns, by reviewing,
modifying, and resending a draft of the proposed changes such that the required deadline is met.
Attachment D Wholesaler’s Returned Goods Policy MMCAP Contract No.:
MMS15001
Page 1
Cardinal Health Pharmaceutical Distribution Returned Goods Policy
Products in “merchantable condition” (as defined below) and originally purchased from Cardinal
Health may generally be returned to the customer’s servicing Cardinal Health distribution center
in accordance with, and subject to, the terms and conditions of this policy.
Return Made Within:
Normal Credit Amount:
1 – 60 Days from Invoice Date
100% of original invoice amount paid by customer. This
policy covers all order shortages, filling errors and
damage if reported within three (3) business days and
such products are returned within ten (10) business days
of the date of the applicable invoice. Recalled products
must be returned in accordance with applicable recall
terms.
61 – 180 Days
85% of original invoice amount paid by customer.
Provided, however, if applicable Cardinal Health mark-
up is greater than 0%, credit will be based on customer’s
contract cost or Cardinal Health’s then-current base cost,
as applicable.
181 – 365 Days
70% of original invoice amount paid by customer.
Provided, however, if applicable Cardinal Health mark-
up is greater than 0%, credit will be based on customer’s
contract cost or Cardinal Health’s then-current base cost,
as applicable.
Returns made greater than 365 days from the invoice date will not be accepted. No credit will be
issued, and the product will be returned to customer.
Recalls
100% of return value (prorated for partial return) or, if
known, applicable manufacturer credit.
“
Merchantable condition
”
will be determined by Cardinal Health based upon its ability to
return the product to its inventory for resale in the normal course of its business, without special
preparation, testing, handling, or expense and will
exclude
the following:
a)
Any product purchased from any supplier other than Cardinal Health.
b)
Any product which has been used or opened; is a partial dispensing unit or unit of sale; is
without all original packaging, labeling, inserts, or operating manuals; or that is
stickered, marked, damaged, defaced, or otherwise cannot readily be resold by Cardinal
Health for any reason.
c)
Short-dated (less than seven (7) months expiration dating)
d)
Any product that is outdated, seasonal, purchased on a “special order” basis, non-stocked
or discontinued, drop-shipped, deals, pre-packs, frozen, products with low stability (e.g.,
unusually sensitive to temperature/handling situations), products considered to be toxic
waste, and products not returnable by law proposed at the time of return and products
remaining in opened containers.
e)
Any product not intended for return to a wholesaler in accordance with the return policies
of the applicable manufacturer.
f)
Any product listed by any state or federal regulatory agency as a high-risk pedigree item
that is returned without a valid invoice number that cannot otherwise be verified by
Cardinal Health.
Attachment D Wholesaler’s Returned Goods Policy MMCAP Contract No.:
MMS15001
Page 2
Unmerchantable Products
Any product not eligible for return in accordance with this policy (i.e., the product is not in
“merchantable condition” as set forth above) will require return directly to the manufacturer. If
any such products are returned to Cardinal Health, they will be returned to customer and no credit
will be issued. Stickered products will be handled as follows: Cardinal Health will remove the
sticker, retain the product and credit the customer (as applicable pursuant to this policy). If the
product is damaged during the removal of the sticker, no credit will be issued to customer and the
product will be returned to customer.
Notwithstanding the foregoing, in any case where Cardinal Health accepts the return of such
products and agrees to return such products to the applicable manufacturer on behalf of customer
(provided the manufacturer allows the return of such products), any credit issued to customer will
be determined by Cardinal Health.
Required Return Documentation
Prior to returning any product to Cardinal Health, customer must execute and deliver to Cardinal
Health a
Cardinal Health Returned Goods Authorization
Ongoing Assurance
verifying that
all returned products have been kept under proper conditions for storage, handling, and shipping.
A fully completed and signed
Merchandise Return Authorization Form
(the “MRA Form”)
must accompany all products to be returned.
Note
: An MRA Form cannot be fully completed
without a valid invoice number. The request for an MRA Form will be rejected if a valid invoice
number is not provided.
Controlled Substances
Credit for the return of controlled substances requires a separate MRA Form and such returns
must comply with all applicable laws, rules and regulations in addition to the terms and
conditions of this policy.
Refrigerated, Chemotherapy and Hazardous Products
Refrigerated, chemotherapy and hazardous products must be returned in packaging that complies
with applicable regulatory requirements. All such products that are not returned in packaging that
complies with applicable regulatory requirements will be considered damaged and unsaleable.
This product will be destroyed and no credit will be issued to customer.
Shorts and Damaged Products
Claims of order shortages (e.g., products invoiced but not received), filling errors and damage
must be reported within three (3) business days from the applicable invoice date, or no credit will
be issued. Returns of damaged products or products shipped in error must be received by the
Cardinal Health servicing distribution center within ten (10) business days from the applicable
invoice date, or no credit will be issued. Controlled substance shortage claims must be reported
immediately per DEA requirements. In all instances, credit will not be issued until verification of
the claim by Cardinal Health.
No deductions may be taken by customer until a valid credit memo is issued by Cardinal Health.
Shipping of Return Products
Products to be returned must be placed in a proper shipping container and signed for by the driver
when picked up.
Signed MRA Forms shall be included in totes with the returned products. Only one (1) MRA
Form shall be included in each tote.
a)
If the MRA Form is not signed, no credit will be issued, and the products will be returned
to the customer.
Attachment D Wholesaler’s Returned Goods Policy MMCAP Contract No.:
MMS15001
Page 3
b)
If the MRA Form is not inside the tote with the returned products, Cardinal Health will
attempt to identify the customer that returned the products. The tote will then be returned
to the customer with a request for a completed MRA Form(s).
c)
No credit will be issued for products returned but not listed on the accompanying MRA
Form. Such products will be returned to the customer.
All MRA Forms will be reviewed by Cardinal Health for compliance with this policy. The
acceptability and valuation of any return is at the sole discretion of Cardinal Health.
Products must be returned to the customer’s servicing Cardinal Health distribution center within
thirty (30) days from the date of customer’s request for an MRA Form,
or no credit will be issued.
In addition to the requirements set forth in this policy, Customer shall comply with all return
procedures required by the Cardinal Health servicing distribution center.
Other Restrictions
Excessive returns may result in higher restocking fees as deemed necessary by Cardinal Health.
In such an instance, Cardinal Health shall provide customer and MMCAP with at least (30) days
written notice prior to implementing a higher restocking fee.
This policy is subject to change without prior notice by Cardinal Health. This policy is further
subject to modification as may be deemed necessary or appropriate by Cardinal Health to comply
with applicable federal and/or state regulations, FDA guidelines, state law, and other restrictions
applicable to returned products. Cardinal Health will use commercially reasonable efforts to
notify MMCAP of any change to this policy within ten (10) business days of said change.
Attachment E Member-requested Participation Agreement (MPA) MMCAP Contract No.: MMS15001
Attachment E - MPA
Each MMCAP Member’s Member-requested Participation Agreement (MPA) shall be, to the extent applicable,
attached and incorporated as an Exhibit into this Attachment by amendment.
Cardinal Health 110, 112
and 107 LLC
Contract MMS15001
Amendment 21
is not posted for viewing
