Department of Financial Management 411 West Ocean Boulevard, 6th Floor

Long Beach, CA 90802

(562) 570-6425

May 23rd, 2024

NOTICE TO PROPOSERS

ADDENDUM NO. 1

RFP No. HR-24-389 Pharmacy Benefits Management

This addendum changes and supersedes the language in the original RFP. Please acknowledge receipt of this addendum by signing and submitting with your proposal. Any proposer who fails to submit this addendum may be disqualified.

The City would like to remind Proposers that pursuant to Section 5.2.26 of the RFP, the City will not be responsible for or bound by any oral communication or any other information or contact that occurs outside the official communication process specified herein, unless confirmed in writing by the City Contact.

The City would like to make the following updates:

• Pre-proposal Meeting slide deck has been linked below:

o HR-24-389 Informational Session PowerPoint

• Pre-proposal meeting recording can be accessed with the following link:

o HR-24-389 Informational Session Recording

• Updated Cost Proposal Template can be downloaded, under the ‘File Attachment’ section of the Bid’s landing page.

The City would like to provide the following:

1. Q: This opportunity appears to be a request for a stand-alone prescription drug plan that covers both Active and Retired members. The plan is currently with

CVS and does not appear to include the MAPD population that I manage. Is that correct? I want to be sure to address all of your request and get the RFP to the correct department.

A: Correct, this is independent of the United Health Care Medicare

Advantage (UHC MA) PPO plan and will remain as such. The UHC fully insured

MA PPO plan is one of three plans offered to Medicare Retirees of the City. The

Pharmacy Benefits Management (PBM) RFP released is for the Active and

Retiree self-funded plans currently through CVS.

PBM%20RFP%20Info%20Session%20HR-24-389.pdf ../../../../../Downloads/HOLD%20_%20Informational%20Session%20HR%20-24-389-20240514_140205-Meeting%20Recording%20(1).mp4

Addendum # 1 RFP HR-24-389 Pg. 2

2. Q: Are retirees all pre-65?

A: No, the City covers both early retirees pre-Medicare eligible and post 65

Medicare retirees. Both retiree classes are offered Rx coverage under the current self-funded Rx program.

3. Q: Can we get a copy of this PP and the rerecording so we can share with my

Team. Will there be an extension granted?

A: PowerPoint and recording are linked above. Currently, the City does not intend to amend the solicitation timeline.

4. Q: Are the post-65 retirees EGWP, RDS?

A: No, the post-65 retiree Rx benefits offered under this plan are not Employer

Group Waiver Plans (EGWP) or Retiree Drug Subsidy (RDS) plans.

5. Q: In the RFP exhibit 6 tab, the City is requesting a GeoAccess, however, the fields are Prior Authorization related. Is this an error?

A: That is an error, tab 6 is strictly related to Prior Authorizations. An updated template has been provided via Long Beach Buys.

6. Q: To confirm, are there any consulting fees? We didn’t see any?

A: No, the City’s arrangement with Alliant is fee for service. Rx program is net of consulting fees.

7. Q: Can you please explain "exclusive specialty (including client owned)?"

Does this mean the City does not want the PBM to have exclusive rights to specialty pharmacy?

A: The City currently operates under an exclusive specialty pharmacy arrangement with the PBM preferred specialty pharmacy. However, the City reserves the right in the future to manage Specialty pharmacy should it wish to look at clinics in the future as a long-term strategy. Please prepare responses assuming an exclusive specialty arrangement.

8. Q: Can you explain what "all pricing should be unbundled" refers to?

A: All pricing is assumed to be unbundled. Please provide associated costs for any proposed clinical programs as part of the cost proposal.

9. Q: Can you confirm the contract period please?

Pg. 3

A: This contract will be for a period of two (2) years with the option to renew for three (3) additional one-year periods. The total contract term will not exceed five (5) years.

10. Q: Vendor pricing proposals are guaranteed for a three-year term (effective

January 1, 2025) for the City of Long Beach, with two successive one-year optional renewal periods. Whereas HR-24-389 document: This contract will be for a period of two (2) years with the option to renew for three (3) additional one-year periods.

A: This contract will be for a period of two (2) years with the option to renew for three (3) additional one-year periods. The total contract term will not exceed five (5) years.

11. Q: Can you confirm whether a recording of the Informational Meeting for HR-

24-389 will be posted?

A: The recording to the informational meeting is linked above.

12. Q: Do we need to be licensed by the California Department of Managed

Healthcare (California Department of Managed Health Care > Licensing &

Reporting > Health Plan Licensing > Licensing Frequently Asked Questions) to be the COLB’s PBM administrator?

A: This is a self-funded pharmacy program. Such programs are not regulated at the state level and are not subject to the laws of the State of California or the regulations of the Department of Managed Health Care. Therefore, this license is not technically required by the City. However, most Pharmacy

Benefit Managers offer fully insured Rx plans in the state and are licensed accordingly.

13. Q: Can we provide references once we are notified if we are finalists?

A: References must be provided as part of the overall RFP response.

References will not be contacted until finalists are determined.

14. Q: Do we need an executable contract included in our bid?

A: Please provide an initial boilerplate agreement which works to align with the responses and cost proposal put forth by your company. Please note that responses put forth through the RFP submittal process should align with services and conditions that will become part of the vendor-City contract.

15. Q: Can we submit the executable contract after we submit our RFP response?

(We ask this question as this is a lengthy process.)

Pg. 4

A: Please provide an initial boilerplate agreement which works to align with the responses and cost proposal put forth by your company. Please note that responses put forth through the RFP submittal process should align with services and conditions that will become part of the vendor-City contract.

16. Q: Is it your expectation that a vendor is to provide: both a traditional bid as well as a pass-through bid or either a traditional bid or a pass-through bid?

A: The city prefers to receive bids on a pass-through transparent basis, however it will review submissions for both traditional and pass-through bids.

17. Q: Was there an Attachment 12 included in the RFP? Article #5 of the Financial

Questionnaire tab of the Cost Proposal states the following. Respondent will allow 90 day mail order discounts at retail 90 channel if requested. If

“Confirmed”, separately included another column within the Network Match

Analysis in Attachment 12 identifying chains that are included in your 90 day retail network.

A: Please refer to Exhibit 7 Network Disruption tab of the Supplier Proposal

Template.

18. Q: We see the Clinical Edits included in Exhibit 4-Clinical Programs of the Cost

Proposal. Can you confirm whether City of Long Beach has any other clinical programs such as weight management, medication management therapy, SpecialtyRx accumulator rules, etc.

A: The City does not have any additional programs under the pharmacy contract. Additionally, weight loss drugs such as GLP1s are not currently covered under the pharmacy contract for the purpose of weight management.

19. Q: The RFP does not appear to define certain key terms that, without alignment, may create disparities between or restrict the ability to provide even comparison among bidders’ offers. Can COLB comment on its desire to utilize the following key definitions?

If these are not definitions that bidders should align to, please provide specific definitions for bidders’ consideration, assumptions, modeling, and alignment.

• “340B Claim” means a Claim identified by the submission of “20” in any of the Submission Clarification Code fields and/or a Claim submitted by pharmacy owned by a covered entity, as defined in Section 340B(a)(4) of the

Public Health Services Act, whose 340B status is coded as “38” or “39” in the

NCPDP DataQ database.”

Pg. 5

• “AWP” means the “average wholesale price” for any product as determined by the dispense date of the fill, the actual 11-digit National Drug

Code (“NDC”) of the product dispensed, and referencing the most current published pricing for the Price Type of the same name on the date of dispense and based upon the most current published Medi- Span Master Drug Data

Base, with supplements (“Medi-Span”), or following notice to Client, any other nationally available reporting service of pharmaceutical prices as utilized by

Contractor as a pricing source for prescription drug pricing. The actual 11-digit

National Drug Code ("NDC') of the product dispensed applicable to a

Participating Pharmacy shall be the actual 11-digit National Drug Code

("NDC") of the product dispensed as reported by such Participating Pharmacy to Contractor.

• “Brand Drug” shall mean a drug or non-drug product, whether identified by its chemical, proprietary, or non-proprietary name, that is approved by the

Food and Drug Administration (“DA”) and identified by Contractor using Medi-

Span indicators, and their associated files per the Agreement, or such indicators provided by another nationally available reporting service of pharmaceutical drug information. Once a drug Claim identified as a Brand

Drug Claim, it shall be considered a Brand Drug Claim for purposes of all financial measurements, including, but not limited to, pricing guarantees and rebate sharing arrangements.

• “Generic Drug" shall mean a drug or non-drug product as identified by

Contractor using MediSpan indicators and their associated files per the

Agreement, or such indicators provided by another nationally available reporting service of pharmaceutical drug information. Each Claim priced with a DAW value of five ('"5"'), shall be adjudicated as a Generic Drug. Once a drug Claim is identified as a Generic Drug Claim, it shall be considered a

Generic Drug Claim for purposes of all financial measurements, including, but not limited to, pricing guarantees and rebate sharing arrangements.

• "Specialty Drugs" means certain pharmaceuticals, biotech or biological drugs, that are Covered Drugs and that are used by Contractor, that are used in the management of chronic or genetic disease, including but not limited to, injectible, infused, or oral medications, or products that otherwise require special handling, including without limitation those listed in the contract exhibit

(which Contractor may amend from time to time). Contractor shall provide

Client with a copy of the current Specialty Drug List from time to time upon the reasonable request of Client.

Pg. 6

• "Rebates" means the formulary rebates, including base and market share rebates, collected by Contractor in its capacity as a group purchasing organization for the Plan from various pharmaceutical companies that are attributable to the utilization of single source brand, prescription drugs by Plan

Participants.

• “Claims” means a Member's submitted claim for prescription benefit under Client's Plan; and/or any other prescription drug claims processed through Contractor's claims adjudication system or otherwise transmitted or processed in accordance with the terms of the Agreement in connection with

Client's Plan. “Paid Claim” means a Claim that has been paid (net of any adjustments) and not reversed, denied or voided; and which includes zero balance Claims not reversed, denied, or voided.

• "Plan Participant" or "Member” means each individual identified by Client to be eligible for prescription drug benefits under the Plan, as set forth in

Client's eligibility file or otherwise communicated by Client in a format acceptable to Contractor.

A: As part of the RFP, vendors are asked to submit a vendor-client contract which should include definitions of terms and conditions as well as services. As part of the evaluation process, the City and its consulting partner will review all submission materials to accurately assess and account for differences in vendor submittals.

As a guideline, vendors should attempt to align to the following definitions where possible with limited deviation allowed due to vendor legal and administrative procedures and processes:

“340B Claim” means claims that are processed by a Retail, Mail, or Specialty pharmacy using drugs obtained through the 340B Drug Pricing Program and have been identified by the pharmacy via NCPDP submission codes as receiving the 340B discounted price.

• “AWP” means the “average wholesale price” for any product as determined by the dispense date of the fill, the actual 11-digit National Drug

Code (“NDC”) of the product dispensed, and referencing the most current published pricing for the Price Type of the same name on the date of dispense and based upon the most current published Medi- Span Master Drug Data

Base, with supplements (“Medi-Span”), The actual 11-digit National Drug Code

("NDC') of the product dispensed applicable to a Participating Pharmacy shall be the actual 11-digit National Drug Code ("NDC") of the product dispensed

Pg. 7 as reported by such Participating Pharmacy to Contractor. Contractor shall not repackage any drug nor permit the repackaging of any drug.

• “Brand Drug” shall mean a drug or non-drug product, whether identified by its chemical, proprietary, or non-proprietary name, that is approved by the

Food and Drug Administration (“DA”) and identified by Contractor using Medi-

Span indicators, and their associated files per the Agreement, or such indicators provided by another nationally available reporting service of pharmaceutical drug information. Once a drug Claim identified as a Brand

Drug Claim, it shall be considered a Brand Drug Claim for purposes of all financial measurements, including, but not limited to, pricing guarantees and rebate sharing arrangements unless explicitly agreed to in writing by the client.

• “Generic Drug" shall mean a drug or non-drug product as identified by

Contractor using MediSpan indicators and their associated files per the

Agreement, or such indicators provided by another nationally available reporting service of pharmaceutical drug information. Each Claim priced with a DAW value of five ('"5"'), shall be adjudicated as a Generic Drug. Once a drug Claim is identified as a Generic Drug Claim, it shall be considered a

Generic Drug Claim for purposes of all financial measurements, including, but not limited to, pricing guarantees and rebate sharing arrangements, unless explicitly agreed to in writing by the client. Generic drugs should include all single source generics, branded generics, DAW 5 house generics, non-MAC generics, generics involved in patent litigation and all authorized generics.

• “Limited Distribution Drug (LDD)” means Specialty Drugs that are only available through certain identified pharmacies. They require special handling, administration, or monitoring. They are used to treat complex or rare medical conditions. Manufacturers restrict distribution to a few pharmacies based on product needs and strategy.

• “Maximum Allowable Cost (“MAC”)” means the maximum allowable cost for Generic Drugs and Brand Drugs that have generic versions available. The MAC list is established by the Contractor and may be amended from time to time with proper notice to the client. The MAC list is used by all pharmacies including any Contractor-owned or affiliated pharmacies as well as Mail Order pharmacies and should not differ between pharmacies.

• "Specialty Drugs" means certain pharmaceuticals, biotech or biological drugs, that are Covered Drugs and that are used by Contractor, that are used in the management of chronic or genetic disease, including but not limited to, injectible, infused, or oral medications, or products that otherwise require

Pg. 8 special handling, including without limitation those listed in the contract exhibit

(which Contractor may amend from time to time). Contractor shall provide

Client with a copy of the current Specialty Drug List from time to time upon the reasonable request of Client. Any product defined as specialty for one part of the contract is so defined throughout the contract.

• "Rebates" means any and all payments including fees, charges or other forms of monetary payment paid by a pharmaceutical manufacturer and received from a rebate aggregator and collected by the Contractor or its designee, including GPOs, on behalf of the Client or the PBM’s book of business to which the Client contributed in compliance with the Client’s drug utilization. As to remove any doubt, Rebates will include, but not be limited to, revenues received and related to base, formulary, incentive, and market share rebates, manufacturer administrative fees, data fees, book of business aggregate utilization rebates, specialty rebates, price protection and all other revenues from pharmaceutical manufacturers or other third-parties that are received by the Contractor.

• “Claims” means a Member's submitted claim for prescription benefit under Client's Plan; and/or any other prescription drug claims processed through Contractor's claims adjudication system or otherwise transmitted or processed in accordance with the terms of the Agreement in connection with

Client's Plan. “Paid Claim” means a Claim that has been paid (net of any adjustments) and not reversed, denied or voided; and which includes zero balance Claims not reversed, denied, or voided.

• "Plan Participant" or "Member” means each individual identified by Client to be eligible for prescription drug benefits under the Plan, as set forth in

Client's eligibility file or otherwise communicated by Client in a format acceptable to Contractor.

20. Q: Please confirm if COLB will consider a bidders’ offer of only a Traditional or

Transparent offers as opposed to presenting both Traditional and Transparent.

Bidder’s intent would be to present its most financially aggressive option.

A: The city prefers to receive bids on a pass-through transparent basis, however it will review submissions regardless of pricing mechanism.

21. Q: For the Prescription Drug Pricing section, Requirements 106 - 139, please further clarify what is being requested. For example, Requirement 107 states

Single Source Brand: Confirm or Explain Deviation. Requirement 127 states Any other claims excluded (not listed above) - please specify and explain adjudication logic. Should bidders specifically interpret Requirements 107-126

Pg. 9 as requests to confirm whether these claims are Excluded from pricing and/or rebate guarantees?

Please provide specific directions for this full section to clarify how to interpret the requirement in order to ensure we provide an appropriate response.

A: The intent of the section is for each vendor to determine and confirm that each item is an included line item in the discounts and dispensing fees put forth via the cost proposal submission. If items are excluded from the discount and dispensing guarantees, vendor should note that via response.

22. Q: From the COLB RFP documents and per discussion in the bidder’s conference, we understand that the City is seeking a 2-year financial offer with three one year renewals. How should bidders complete the pricing grids that are setup to ask for a three year offer knowing that the city is only entertaining two year offers with three optional periods, i.e. how should bidders populate the third year of pricing requested in the pricing and repricing tables.

A. This contract will be for a period of two (2) years with the option to renew for three (3) additional one year periods. The total contract term will not exceed five (5) years. Please adjust cost proposal accordingly.

23. Q: Regarding the requirement that respondents include a signature-ready contract as an appendix when submitting proposals, in order to ensure that bidders’ RFP commitments can be accurately reflected in the contract, would

COLB consider deferring the due date for delivery of a signature-ready contract until the finalist or BAFO stage of the RFP process?

A: Please provide an initial boilerplate agreement which works to align with the responses and cost proposal put forth by your company. Please note that responses put forth through the RFP submittal process should align with services and conditions that will become part of the vendor-City contract.

24. Q: Does COLB intend to maintain the drug classes of Transplant, Hep B, and

Oral Oncology medications as specialty drug classification to be included in specialty discounts and rebates guarantees?

A: It is the city’s intent to maintain these classes as specialty medications and should be included in the appropriate discount and rebate guarantees.

25. Q: Please confirm that WAC reductions for insulin, inhalers, etc. should be accounted for in the rebates, reflecting lower guarantees.

A: Confirmed.

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26. Q: COLB has aligned to current PBM’s Humira biosimilar strategy that may not be reflected in the data provided as part of the RFP. Please describe your biosimilar coverage strategy as part of this RFP.

A: It is the city’s intent to maintain coverage of in-force coverage as it relates to Humira and it’s biosimilars as closely as feasible. Current strategy removed

Humira from coverage effective 4/1/24 to align with a biosimilar-first strategy which can include high and low-WAC Biosimilars. The city along with its consulting partner will evaluate each vendor’s formulary offerings to account for differences not only in Humira, but across all therapeutic classes to ensure an accurate accounting of the marketplace.

PREPARED BY: Abraham Torres, Asst. Administrative Analyst II

ACKNOWLEDGED BY: __________________________________________________

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