Attachment E - Sample Contract for Pharmacy Benefits Management Services.docx

This is a Sample Contract document for Pharmacy Benefits Management (PBM) Services for the City of Houston's self-funded medical plans in Texas. The contract outlines the administration of prescription drug benefits for City employees and their dependents, with a five-year initial contract term followed by two optional one-year renewal periods, for a potential maximum seven-year engagement. The selected contractor will be responsible for managing PBM services to ensure cost-effective, high-quality prescription drug coverage while maintaining compliance with all applicable federal and state regulations governing pharmacy benefits administration.

The sample contract establishes the framework for service delivery, performance standards, and operational requirements that the selected vendor must meet. Key provisions address claims processing, formulary management, network pharmacy administration, mail-order pharmacy services, and reporting and analytics capabilities. The contract specifies contractor obligations regarding member communications, fraud and abuse prevention, quality assurance programs, and compliance with HIPAA and other regulatory requirements. Payment terms and pricing methodology are detailed within the agreement structure, along with provisions for contract termination, renewal options, and performance obligations. The document serves as the template against which proposals will be evaluated and the final executed contract between the City of Houston and the selected PBM services provider.