260125_Chapter_1B_-_PBM_Cost_Proposal-REVISED-RETURN_WITH_BID.xlsx
XLSX spreadsheet 2 MB Posted
- Solicitation number
- 260125
- Issued by
- Pima County, Tucson City, Arizona
About this file
The file "260125_Chapter_1B_-_PBM_Cost_Proposal-REVISED-RETURN_WITH_BID.xlsx" is related to a Request for Proposal (RFP #260125) issued by the City of Tucson, Arizona, seeking comprehensive healthcare and benefits administration services. The RFP covers five distinct service lines: Medical/Telehealth, Pharmacy, Wellness, Employee Assistance Program (EAP), and Dental Coverage for approximately 4,498 employees and 2,306 retirees, with a July 1, 2026 effective date. Vendors may bid on one or more service lines, with the Wellness line potentially being awarded to multiple contractors. The solicitation allows for proposals until November 12, 2025, at 2:00 p.m. local time, with questions due by October 21, 2025, at 5:00 p.m. The contract includes an initial one-year term with options to renew for six additional one-year periods.
The current incumbent for most services is Cigna, and the City pays 100% of employee and dependent costs for most services. Monthly rates vary by service, with the dental DHMO ranging from $8.67 to $21.16 and the EAP priced at $1.96 Per Employee Per Month (PEPM). The City also maintains a $100 per subscriber annual wellness incentive fund. Minimum requirements for bidders include five years of business experience, 10,000 full-service covered members, and three clients with at least 2,000 total members. Evaluation criteria will focus on network/provider access, approach methodology, costs, and contractor qualifications. While no specific set-aside designations are mentioned, the RFP suggests a preference for vendors with established public sector experience and robust capabilities in Arizona.
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Cover Sheet
| Pharmacy Benefit Management (PBM) Services |
| REQUEST FOR PROPOSAL |
City of Tucson
Statement of Confidentiality
The information contained herein is confidential and proprietary to McGriff Insurance Services. It is intended only for use of the intended recipient(s) and may not be disclosed or distributed without prior written consent. Unauthorized distribution, copying or disclosure is strictly prohibited and may be unlawful. Any unauthorized use of disclosure may result in irreparable harm and legal action.
TOC
| City of Tucson | |
| Pharmacy Benefit Management Plan Request for Proposal | |
| Table of Contents | Tab |
| Cover Page | ……………………………………………………………………………….. | 1 |
| Table of Contents | ……………………………………………………………………………….. | 2 |
| Bidders Form | ……………………………………………………………………………….. | 3 |
| Project Overview | ……………………………………………………………………………….. | 4 |
| Required Documents | ……………………………………………………………………………….. | 5 |
| Questionnaire | ……………………………………………………………………………….. | 6 |
| Pricing Outline | ……………………………………………………………………………….. | 7 |
| Savings Projections | ……………………………………………………………………………….. | 8 |
| Performance Guarantee & Credit | ……………………………………………………………………………….. | 9 |
| Formulary Disruption | ……………………………………………………………………………….. | 10 |
Bidders Form
| City of Tucson | ||
| Bidders Form | ||
| Please confirm your organization has read and agrees with each of the following requirements by selecting "Agree" (use the drop-down options) in the space provided. PBMs unable or unwilling to comply with these requirements may be eliminated from further consideration. | ||
| __________________________________________(PBM organization name) has received The Client (City of Tucson) Request for Proposal for Pharmacy Benefit Management Services. This completed form serves as a component of our proposal. |
Requirement Agree Disagree
| Agree w/ Modifications | Comments | ||
| 1 | PBM agrees that financial proposals, including any best and final offer submitted post-RFP, are binding and shall be integrated into the services agreement ('contract') with City of Tucson. | ||
| 2 | PBM's proposal will be valid for a period of 180 days following submission and if awarded the business until a contract has been executed. | ||
| 3 | PBM agrees that this RFP shall not be construed in any manner to create an obligation on the part of the Client to enter into any contract or to serve as a basis for any claim for reimbursement of costs for efforts expended by the PBM. This RFP may be withdrawn or canceled by the Client at any time, and the Client reserves the right to reject any or all proposals submitted hereunder for any reason whatsoever. | ||
| 4 | PBM agrees to keep the information provided herein confidential. PBM agrees not to publish or reproduce or in any other way divulge such information in whole or part, in any manner of form, or authorize or permit others to do so. | ||
| 5 | PBM's RFP response, including any attachments, shall be the property of City of Tucson. | ||
| 6 | PBM acknowledges that all qualified proposals will be evaluated, and the award will be made to the PBM whose combination of cost and services are deemed to best satisfy the objectives of the Client. This document is part of the PBM selection process; the Client reserves the right to request a best and final offer, and/or supplemental information needed to evaluate PBM's compatibility with the Client's pharmacy management objectives. | ||
| 7 | If selected as the winner, PBM agrees to pay McGriff Pharmacy Practice directly $15,000 per quarter ($60,000 annually) for consulting services plus up to $50,000 annually for PBM audit services, including pre- and post-implementation audits. This amount is included in the pricing, upon the contingent award of the business, which starts the contracting phase of the procurement. This consultation fee should be considered/included in the offered pricing and will not be invoiced to the client. Note: If your organization does not agree to this term, your organization may be disqualified as a potential bidder. | ||
| 8 | If PBM is selected as the winner, PBM agrees to provide a contract within 30 business days of being awarded the business. | ||
| 9 | PBM understands that if a requirement is disagreed to in the requirements section of the RFP or not confirmed fully as written in the requirements section of the RFP and there is not agreement from the McGriff Pharmacy Practice, the disagreement this will be considered an open item and can be negotiated in the contract if PBM is selected as the winner. | ||
| 10 | The definitions and terms in this RFP along with the PBM's responses, including all subsequent documents provided during this RFP process, will be incorporated in the contract terms between the parties. | ||
| 11 | (Incumbent PBM ) Changes from the current contract language to the renewal contact (if awarded) must first be redlined and submitted for signed approval by McGriff Pharmacy Practice and/or City of Tucson. Any unauthorized or unapproved changes in language (including removal of definitions, programs, or edits to credits and fees) will void said edits and the incumbent PBM will be held liable for all financial impacts to <client>. |
Authorized Signatory
PBM Signatory Name:
PBM Signatory Job Title:
| PBM Signatory Contact (email): |
| Signature: |
Date:
Project Overview City of Tucson
| Key characteristics: | |
| ▪ | Approximately 4,498 enrolled employees & retirees |
| ▪ | Current PBM – Cigna |
| ▪ | Medical Carrier – Cigna |
| ▪ | Annual Pharmacy Claims – Approximately 100,000 |
| ▪ | Industry – Municipality |
| Additional Info: | |
| ▪ | Network Type: Broad |
| ▪ | Formualry Type: Standard |
| ▪ | Specialty Type: Exclusive |
| ▪ | Plan Design Info: PPO, HDHP, HRA - refer to https://tucsonaz.gov/benefits and attached Benefit Design attachment |
| ▪ | List current Programs: Refer to Benefit Design attachment |
| ACTIVITY | TIMELINE |
| Project Release | 10/10/25 |
| Bidders Form Due | 11/12/25 |
| Question Due from Bidders | 10/21/25 |
| Responses Due | 11/12/25 |
| Client Presentation | TBD |
| Client Decision | TBD |
| Implementation Begins | TBD |
| Plan Effective Date | 7/1/26 |
| *The Client reserves the right to conduct PBM finalist meetings, and/or request a Best and Final Offer. |
Required Documents
| City of Tucson |
| Required Attachment List |
Please include the Attachment # as well as the Attachment Description listed below in the file name with your response.
| Listing of Required Attachments | Provided? | Comments | ||
| Attachment # | Attachment Description | |||
| Attachment 1 | Formulary Disruption Analysis based on provided claims data, including drug exclusions and alternatives | |||
| Attachment 4 | Formulary List by NDC11 in Excel format; must include all non-formulary and excluded products | Yes | ||
| Attachment 5 | Specialty List in Excel format by NDC11 with % discount guarantees and LDD indicators | |||
| Attachment 6 | List of all clinical program options with detail description as well as their associated fees. |
(Include any weight loss (GLP1s), diabetic, wellness, and member engagement.)
| Attachment 9 | Broad Retail 30-day commercial network with NPI (Excel Format) | |
| Attachment 17 | Detailed Implementation Tracker including clinical program and formulary options (Excel Format) | |
| Attachment 18 | MAC list in Excel format, including GPI or GCN, NDC11, and unit price for all generic medications in your drug database | No |
| Attachment 19 | Exclusion list in Excel format with NDC11 for low value, high cost drugs | |
| Attachment 20 | Pricing Commitment Document | |
| Attachment 21 | Sample contract with definitions and pricing addendum | |
| Attachment 22 | Manufacturer assistance program options, including for HSA members, with projected savings and program cost. |
Questionnaire
| City of Tucson |
| RFP Questionnaire |
| Question | Answer | Comment |
| Headquarters location | ||
| PBM Background Information | ||
| Current number of member lives served | ||
| PBM "employee" retention rate for the last calendar year | ||
| PBM "client" retention rate for the last calendar year | ||
| List 3 key differentators from other PBMs | ||
| Prior Autorization approval rating for the previous calendar year | ||
| 2024 Humira & Stelara Biosimilar conversion rate and expected conversion rate for 2025 | ||
| List Biosimilar Strategy for Humira, Stelara, and Keytruda (formulary placement/removal, low/high WAC biosimilars, eligibility for specialty rebate guarantee, rebate credits for biosimilar fills, etc.) | ||
| List GLP-1 Strategy |
Financial, Pricing and Rebate Guarantees Agree Disagree
| Agree w/ Modifications | Comments |
| General Pricing Requirements, Terms & Conditions | |
| City of Tucson reserves the right to terminate the agreement without cause and without penalty or withholding of earned, unpaid rebates, upon 90 days written notice. | |
| Confirm data may be shared with McGriff Consulting Services at no additional fee. | |
| All pricing terms are based on client's current plan design, clinical programs, and utilization, and do not require changes in plan designs or adoption of additional programs. | |
| Implementation of mandatory generic, mandatory mail, step therapy, or other utilization management programs will not cause any change in pricing terms other than rebate guarantees. | |
| Upon contract termination the following files will be provided at no additional charge: most recent 6 months of historical claims, Specialty pharmacy patient data, Open Refill Transfer file, and Prior Authorization file. | |
| Data transfer to other vendor partners (e.g., medical plan administrator, stop loss vendor, disease management vendor, catastrophic claimant advocate, etc.), will be provided at no additional charge with an appropriate NDA. | |
| If the client's membership changes less than 20% no changes in pricing terms are necessary. | |
| On an annual basis throughout the contract term, The Client or its consultant may initiate a market check. Consultant may review pricing proposals specific to The Client or may utilize benchmarking for comparable plans/groups with similar gross drug spend and for substantially similar services. If the aggregate value of pricing commercially available to such plans/groups can yield savings of 1% or more annually, PBM agrees to negotiate in good faith an equitable adjustment to The Client pricing. The results of the market check can only lead to more favorable pricing for The Client. Such pricing will become effective the first day of the following contract year, or earlier, if mutually agreed upon by the parties. If the PBM is unable or unwilling to offer revised pricing terms and conditions that provide The Client the percentage savings, then The Client may terminate this Agreement without penalty upon ninety (90) days prior written notice to the PBM. | |
| Following termination of the contract, PBM will process and pay run-out claims up to a period of 60 days at no additional charge. | |
| Pricing Guarantees & Methodology | |
| Actual AWP Discount: [1-(total adjudicated gross cost (excluding dispensing fees and prior to application of member cost share) of all claims for the annual period divided by total undiscounted AWP for the annual period)]. | |
| PBM will use one consistent source of AWP (Medi-Span) to price each drug claim for guarantee calculation, reconciliation and reporting. The AWP shall be determined by the actual dispensed NDC-11 on the date dispensed (fill date). | |
| Pricing Guarantees (AWP discounts and dispensing fees) will be measured independent of Rebate guarantees such that under-performance on a pricing guarantee will not be offset with over-performance on a rebate guarantee and visa versa. | |
| Over-performance on any network performance guarantee component and channel will not be used to offset under-performance on any other network performance guarantee component and channel. No cross subsidization of program savings, fees, discounts, or guarantees will occur at retail, mail, specialty pharmacy or within the distribution channel. Any overage will accrue 100% to Client. | |
| PBM's maximum days supply for Specialty Drugs is 30 days. | |
| Member will always pay the lowest of the client negotiated price, usual and customary (U&C) or eligible member cost Share for Retail Network and Mail Pricing. Any excess Eligible Member Cost Share will not be retained by PBM. | |
| Claims for which the member pays 100% shall not be excluded from guarantees. Actual discounted AWP or ingredient costs applied to these claims during adjudication shall always be used in the reconciliation process. Under no circumstances will the PBM use a discount percent for guaranteed reconciliation that exceeds the actual pricing discount applied to the claim. | |
| Confirm Exclusive Specialty Pharmacy Overall Effective Discount includes all drugs on the Specialty Drug List, New to Market Specialty Drugs, and all LDD. This guarantee is across all dispensing channels and sites of care. This guarantee includes provider administered Specialty Pharmacy drugs supplied by the Specialty Pharmacy. | |
| Confirm Open Specialty Pharmacy Overall Effective Discount includes all drugs on the Specialty Drug List, New to Market Specialty Drugs, and all LDD. This guarantee is across all dispensing channels and sites of care. This guarantee includes provider administered Specialty Pharmacy drugs supplied by the Specialty Pharmacy. | |
| Specialty drug level discounts will be guaranteed separately from the aggregate. The NDC-specific discount guarantees supersede over the entire Specialty OED. | |
| DAW-5 claims will be reconciled with generics. | |
| Over-the-counter (OTC) drugs are products classified as OTC by Medi-Span using the OTC indicator "O" or "P," as of the fill date based on the NDC-11 dispensed. OTC drugs are subject to cost share based on brand or generic drug designation and shall NOT be excluded from discount, dispensing fee, or rebate guarantees. | |
| Usual and customary (U&C) is the amount charged to cash paying customers on the date the drug was dispensed. Usual and customary claims do not have a dispensing fee. | |
| PBM will not implement its ZBD or ZBL logic which allows the retail pharmacy to collect up to the member copayment when the ingredient cost or usual & customary is less than the member's copayment. | |
| Actual dispensing fee performance is defined as sum of total dispensing fees divided by total claim volume. | |
| Rebate Guarantees & Manufacturers' Assistance | |
| PBM's rebate quote is based on a per Brand Claim guarantee. | |
| Rebates paid to the sponsor are the greater of 100% of rebates received or rebate guarantees per eligible script. | |
| Diabetic test strips are included in all discount and rebate guarantees and calculations. | |
| Confirm that there is no days' supply minimum imposed for rebates obtained through mail. | |
| For the purposes of rebate guarantees all drugs on the specialty drug list will receive the specialty per claim rebate guarantee regardless of the channel dispensed. | |
| For Specialty Drugs, per Brand Claim Rebate Guarantee includes all drugs on the Specialty Drug List, New to Market Specialty Drugs, all LDD and all Biosimilar drugs. This guarantee is across all dispensing channels and sites of care. This guarantee includes provider administered Specialty Pharmacy drugs supplied by the Specialty Pharmacy. | |
| Rebates earned on OTCs, multisource brands and / or single source generic drugs shall accrue to the Plan, irrespective of DAW claim status. | |
| PBM will provide Quarterly Rebate Reporting showing Billing/Invoiced/Collected/Paid amounts. | |
| Rebate payouts will be within 90 days post quarter. | |
| 100% of Manufacturer Administrative Fees and Inflation Protection Payments will be passed through to the client. | |
| Rebates shall not include any dollars from copay assistance, copay cards or similar dollars used to offset member contribution. | |
| Should City of Tucson terminate in accordance with the terms of the agreement, PBM will pay City of Tucson 100% of rebates that PBM receives for their claim utilization without penalty. | |
| All HIV claims are eligible for the specialty rebate guarantee and will not received the retail rebate. | |
| City of Tucson's election to cover or not cover weight loss drugs will not have an impact on their rebates | |
| Reconciliation | |
| If actual AWP discount achieved is less than the guaranteed discount, PBM will make City of Tucson whole, dollar for dollar, for all underperformance relative to the guarantees during the reconciltion process. All overperformance on any guaranteed pricing component shall accrue to City of Tucson. | |
| Annual pricing guarantees will be measured, reconciled, and reported no later than 90 days following year-end; any monies owed to City of Tucson for underperformance will be paid to City of Tucson no later than 30 days from guarantee reconciliation. | |
| Generic Drugs for the purpose of reconciliation will include all Single Source generics, Multi-source generics, MAC Generics, Non-MAC Generics, Generics with FDA-granted exclusivity periods, Generics launched at risk, Patent litigated Generic claims, Limited Supply Generics, & Generics filled at specialty pharmacies. | |
| All rebate guarantees will be reconciled individually with no off-setting of underperformance by over performance of discounts, dispense fees, or rebates regardless of channel or Brand vs Generic status. | |
| Specialty, Formulary, & Clinical Management | |
| PBM will provide no less than 60 days’ advance written notice of new or additional formulary management programs or material changes to current formulary management programs. | |
| PBM agrees to provide City of Tucson at least 30 days’ notice in advance of new medications added to your specialty drug list whenever feasible; City of Tucson reserves right to exclude the medication from coverage. | |
| Prior Authorizations shall never exceed 12 months unless approval is granted in writing by City of Tucson, specific to this program feature. | |
| Prior Authorization fees will only apply one-time per prescription. Multiple reviews of the same prescription will not incur more than one fee. | |
| PBM will model the impact of formulary changes, benefit design changes and/or clinical programs at no additional charge. | |
| PBM will accept and load prior authorization, step therapy, mail and specialty open refill files at no additional cost. | |
| Specialty drug claims filled at retail shall be flagged as specialty in PBM's reporting and claims detail. | |
| OED includes newly released products including LDD. | |
| OED includes Limited Distribution Drugs (≤ 3 pharmacies). | |
| Data Management & Eligibility | |
| PBM will send a full claims history file (in NCPDP standard format), at least weekly, at no additional charge to third parties as required to facilitate the integration of pharmacy data with medical claims data and to support other initiatives, such as disease management, stop loss, etc. Please confirm if this eligibility file can be updated in real time. | |
| PBM will provide real-time or near-real time claims data to Plan Sponsors Medical Carrier for purposes of updating combined deductible, out of pocket and accumulator calculations at no additional cost. | |
| Eligibility data will be uploaded within 24 hours of receipt. | |
| PBM will accept and load a minimum of 6 months of historical claims detail into PBM's system for clinical programs. | |
| PBM agrees to pay any fees associated with data-sharing with third-party vendor. | |
| Account Management, Member Services & Communication | |
| PBM agrees to provide a designated account team for City of Tucson to include the following team members: |
Strategic account executive/director Account manager Clinical pharmacist Financial analyst PBM agrees to provide the following customer services at no additional charge:
24/7/365 member call center 24/7/365 access to a pharmacist Pharmacy Help Desk Client Service Center 24-hour toll-free number
| PBM agrees to allow City of Tucson to review and customize all member communication prior to release at no extra cost to City of Tucson. |
| PBM will provide communication to members who are negatively impacted by a formulary change prior to the new plan effective date. |
| Implementation & Testing |
| Implementation materials, including Member ID cards (customization, if requested) and formulary communications, will be mailed to member's home address, at no additional charge. |
| All implementation services, programs and support including production and mailing costs (postage) for standard member communications, will be provided at no additional cost. |
| PBM will provide open enrollment support, as needed or required, to include attendance at member meetings and the development and printing of member communications, as needed and determined during the implementation. |
| PBM will provide a dedicated Implementation Project Manager, responsible for managing all aspects of the Implementation Project Plan. |
| PBM will test 100% of groups plan design changes prior to the effective date with results provided in writing at least 10 business days prior to the effective date. |
| PBM will perform all the tasks necessary to complete a pre-implementation audit (including follow up test claims) at least 10 days prior to the effective date. |
| PBM will provide open enrollment support, as needed or required, to include attendance at member meetings and the development and printing of member communications, as needed and determined during the implementation. |
| Audit |
| City of Tucson has the right to audit all aspects of the PBM contract annually at no charge. |
| The client may employ a third party auditor to conduct a claims analysis confirming accurate benefit design implementation, accuracy of pharmacy claims transactions, and financial performance guarantees |
| Under separate cover, submit the Audit Protocol for Traditional pricing (must include pricing and rebate audit protocols). |
| City of Tucson reserves the right to audit 100% of claims for annual audits. |
| Performance Guarantees |
| Performance guarantees will be measured at Client level. |
| Performance guarantee results will be reported no later than 45 days following the end of the quarter; penalties owed as a result of missed performance will be paid to The Client annually within 60 days of the end of the contract year. |
| PBM agrees that performance guarantees will be effective the date that the PBM services go live even if the contract is still being negotiated. |
Pricing Outline
| City of Tucson | Transparent Pass-Through Pricing Offer | Traditional Pricing Offer |
| Pricing Outline |
| Pricing Component | Year 1 | Year 2 | Year 3 | Year 1 | Year 2 | Year 3 | ||||||
| Reconfirm Pricing Terms are Guaranteed | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | ||||||
| Administrative Fee | $0.00 | Please Select | $0.00 | Please Select | $0.00 | Please Select | $0.00 | Please Select | $0.00 | Please Select | $0.00 | Please Select |
| Network Arrangement Quoted (Name and Pharmacies) | Network Name | - 0 | Network Name | - 0 | Network Name | - 0 | Network Name | - 0 | Network Name | - 0 | Network Name | - 0 |
| Pricing Reconciliation (non-rebate) Timing | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | ||||||
| Rebate Type | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | ||||||
| Rebate Payment Frequency | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | ||||||
| Rebate Reconciliation Timing | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | ||||||
| Rebate Payment Basis | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select |
| Channel Discounts | ||||||||||||||||||||||||||||||
| (Headline Guarantees) | Guarantee Basis | Brand | Generic | Brand | Generic | Brand | Generic | Brand | Generic | Brand | Generic | Brand | Generic | |||||||||||||||||
| Retail 30 Discounts | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||
| Retail 30 Dispensing Fees | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | Offsets | Deal Type | Please Select | Retail Network | Specialty Arrangement | Design Type | Rebate Type | Payment Frequency | Reconciliation Frequency | Rebate Payment Basis | Y/N. | Include/Exclude | Lowest of Logic | ZBC/U&C | ||||
| Retail 90 Discounts | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | Please Select | Please Select | Guaranteed | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | Please Select | ||||
| Retail 90 Dispensing Fees | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | Offset Rebates | Traditional | Estimates Only | Broad National | Open Specialty | Integrated | No Rebates | N/A | N/A | PMPM | Yes | Included | Lower of Discount or Copay | Included at 100% discount or excluded | ||||
| Mail Discounts | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | Offset within Channel | Transparent | Narrow | Exclusive Specialty | Rx Only | Estimated - Not Guaranteed | Monthly | Prepay Flat Guarantees | PEPM | No | Excluded | Lowest of Discount, U&C, or Copay | Included at run rate (not 100%) | |||||
| Mail Dispensing Fees | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
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