SOW Pharmacy CAPS Sterile Admixtue Compounding (DRAFT).DOC

SCOPE OF WORK STATEMENT

IV SUPPLY CONTRACT

I.

PURPOSE. The purpose of this Agreement is to establish the terms and conditions of the IV preparation services for Madigan Army Medical Center to be provided by Central Admixture Pharmacy Services, Inc. (“CAPS”).

II.

TERM. This Agreement covers a five (1) year term beginning 1 October 2021 through 30 September 2025.

III.

THE SERVICE. CAPS will provide directly to Madigan Army Medical Center, parenteral solutions and delivery services as listed on the attached charge schedule marked “Attachment A”.

IV.

PRICING. Pricing for IV services is listed on Attachment A. Pricing will remain firm during the first year of this Agreement. Thereafter, pricing is subject to an increase in each year through the end of contract term not to exceed seven percent (7%) per year. All pricing is based on CAPS being the exclusive provider of off-site IV preparation services for Madigan Army Medical Center during the contract period. Notwithstanding the foregoing, in the event of an unusual increase in the cost of transportation, energy, raw materials, or manufacturing costs, CAPS may increase its prices on the affected products after providing written notice to Madigan Army Medical Center.

V.

PRODUCT COMMITMENT. CAPS will provide directly to, Madigan Army Medical Center and Madigan Army Medical Center agrees to purchase at least 80% of their total TPN’s and/or other outsourced IV admixtures from CAPS, on a prescription basis and/or the IV medication admixtures per Attachment A. Additional parenteral products may be added to the Attachment A from time to time as mutually agreed.

Madigan Army Medical Center agrees to abide by “own use” doctrine, utilizing batch compounded drugs provided by CAPS for their own qualified patients only. CAPS retains the right to request documentation of compliance with own use rules.

VI.

SERVICE LEVELS. CAPS will guarantee a monthly service level of 100% of all orders received prior to the cut off time as mutually agreed to in writing. CAPS will strive to fulfill all change orders received after the cut off time but prior to physical shipment.

VII.

PAYMENTS and CREDITS. Payment terms are net 30 days. CAPS cannot accept any returns for credit. The remittance address is as follows:

Central Admixture Pharmacy Services, Inc.

P.O Box 8500-53663

Philadelphia, PA 19178-3663

(800) 345-7744

VIII.

INFORMATION TRANSFER. Madigan Army Medical Center will send via facsimile, personal computer and CAPS proprietary software, or direct computer interface the appropriate orders necessary for CAPS to accurately admix.

Initiation of an order must be executed by authorized personnel of Madigan Army Medical Center. Changes in personnel authorized to execute an order must be communicated to CAPS in writing. Doses provided to Madigan Army Medical Center from CAPS will contain labeling that includes compounding information as well as labeling Madigan Army Medical Center name and sequential numbering for each dose to aid the receiving pharmacy in tracking each dose to final patient use. Madigan Army Medical Center agrees to assign each sequentially numbered dose to a specific patient and apply sufficient internal labeling prior to final delivery for patient administration to comply with all applicable laws and regulations.

IX.

CONFIDENTIALITY. Each party acknowledges that certain information it will acquire from the other party is of a special and unique character and constitutes Confidential Information. For purposes of this Agreement, Confidential Information means any business, marketing, and financial information not generally known about the business or readily ascertainable by proper means by others, including without limitation, all methods, processes, trade secrets, formularies, employee or subcontractor information, and all patient identifiable information (including without limitation, any medical or billing information). Having acknowledged the foregoing, each party agrees: (a) to exercise the same degree of care and protection (but no less than a reasonable degree of care and protection) with respect to the other party’s Confidential Information as each party exercises with respect to its own Confidential Information, and in accordance with applicable law; and (b) not to, directly or indirectly, disclose, copy, transfer or allow access to any Confidential Information of the other party. Notwithstanding anything to the contrary herein, each party may disclose Confidential Information to its employees and to third parties performing services for such party related to the purposes of this Agreement who have need to know and who have a contractual or legal duty to protect such Confidential Information, and subject to applicable law.

CAPS is not a business associate of Madigan Army Medical Center, as that term is defined under Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended, and the regulations promulgated thereunder at 45 C.F.R. Parts 160-164 (the "HIPAA Regulations"). The parties further agree to amend this Agreement as necessary to comply with any future additions, amendments or guidance on HIPAA and the HIPAA Regulations.

X.

ORDER TRANSMISSION EQUIPMENT. Any equipment, component, or computer software provided to Madigan Army Medical Center for the purpose of transmitting prescription orders to CAPS (to include: personal computer, monitor, printer, modem, and/or facsimile machine) shall be the sole property of CAPS. CAPS will be responsible for the maintenance of the aforementioned equipment, components, and computer software.

Under no circumstances shall any equipment and/or software systems provided to Madigan Army Medical Center be altered or modified in any way without the express written authorization of CAPS. Unauthorized alterations and/or modifications include, but are not limited to: Installation of any unauthorized computer software “games” or applications; BIOS or operating systems reconfiguration; misuse and/or reconfiguration of communications software and hardware (i.e., to access computer bulletin boards, information services, or the “Internet”); introduction of computer software “viruses”; unauthorized copying, modification, or removal of CAPS proprietary software; or removing components (i.e., a monitor or printer) for use with other internal non-CAPS computer systems.

If services are discontinued, any equipment, component, or computer software provided to Madigan Army Medical Center shall be returned to CAPS within fifteen (15) days.

XI.

REPRESENTATIONS AND INDEMNIFICATION. CAPS represents that it will prepare the IV solutions in accordance with the order given or transmitted to CAPS.

Madigan Army Medical Center understands and agrees that it is a sophisticated user of the products listed on Attachment A and that it is aware of the uses, benefits, limitations, hazards and potential injurious properties of such products. Madigan Army Medical Center and its physicians have independently evaluated the safety and clinical use of the products listed on Attachment A, and have deemed these formulations to be clinically appropriate. In agreeing to admix the products listed on attachment A, CAPS is relying upon Madigan Army Medical Center and its physicians’ determination that these formulations are appropriate, and neither Madigan Army Medical Center nor its physicians are relying upon CAPS for this determination. Madigan Army Medical Center and its physicians assume all liability and risk arising in connection with the use of these solutions, including, without limitation, any patient injury directly or indirectly arising from the use of these solutions. CAPS makes no representation or warranty as to the formulation or labeling of the solutions except that such formulation and labeling will be in accordance with the order given or transmitted by Madigan Army Medical Center.

Notwithstanding anything to the contrary herein, CAPS agrees to indemnify, defend and hold harmless Madigan Army Medical Center and its Board of Directors, officers, agents, successors, customers and employees from and against any and all third party claims for damages, losses, judgments, and any expenses incidental thereto that result from bodily injury (including death) to patients of Madigan Army Medical Center caused by the provision of IV solutions by CAPS that were different than that ordered by Madigan Army Medical Center (“Changed Formulation”).

Madigan Army Medical Center agrees to indemnify, defend and hold harmless CAPS and its Board of Directors, officers, agents, successors, customers and employees from and against any and all third party claims for damages, losses, judgments, and any expenses incidental thereto, that result from bodily injury (including death) to patients of Madigan Army Medical Center directly caused by (1) the development, use or administration of the IV solution formulation or mixture prepared by CAPS at Madigan Army Medical Center’s direction unless caused solely by a Changed Formulation; or (2) any mislabeling by, or failure of Madigan Army Medical Center to warn its patients of the uses, benefits, limitations, hazards and potential injurious properties of the IV solutions. “The obligations imposed upon the Government under this paragraph are subject to the limitations of the Antideficiency Act (31 U.S.C section 1341) and the Adequacy of Appropriations Act (41 U.S.C section 11). Any action brought against the Government that is covered by the indemnification obligation shall be processed pursuant to applicable provisions of the Federal claims procedures. Any liability pursuant hereto is specifically limited to appropriation available at the time of the loss. It is understood that there is no legal of moral obligation on the part of the Government to seek additional appropriations from Congress or that Congress will appropriate any funds to make up any deficiency.”

This provision shall survive the termination of this Agreement.

XII.

INSURANCE. CAPS shall maintain adequate liability insurance against liability for personal injury, death or property damage resulting from the services and products provided pursuant to this Agreement as well as the indemnities set forth above.

XIII.

ACCEPTANCE.

XIV.

FORCE MAJEURE. In the event CAPS' production of deliveries of goods are prevented, impaired, reduced or restricted by labor disputes, fire, act of God, or any other similar or dissimilar cause, including but not limited to the unavailability of such goods, transportation, shortages of materials or fuel, delay in delivery or failure to deliver by CAPS' suppliers, loss of facilities of distribution, the voluntary foregoing of the right to acquire or use any materials in order to accommodate or comply with the orders, requests, regulations, recommendations or instructions of any governmental authority (whether in furtherance of national defense of war activities or to meet any other emergency, or the compliance with any law, order, ruling, regulation, instruction or requirements of any governmental authority or any political subdivision or agency thereof, or for any other cause whether of the same or different character than herein specified), CAPS, without liability or obligation, may reduce or eliminate the quantities herein specified in proportion to the prevention, impairment, reduction or restriction upon CAPS' production or delivery, on a pro rata basis among all users of its goods during the period of any such disability. In any such case, the goods which CAPS is unable to supply shall be eliminated from this contract by written notice describing the amounts eliminated and to the estimated time period during which deliveries are to be suspended; and CAPS hereto shall be relieved of any liability with respect thereto during such time CAPS may not be able to deliver the goods in question. “The terms of this paragraph are in addition to the terms of FAR 52.212-4(f).”

XV.

ACCESS TO BOOKS AND RECORDS PROVISION. To the extent that 42 U.S.C. SEC 1395x(v)(1)(I) applies to this type of Agreement, until expiration of five (5) years after the furnishing of services under this Agreement, the Secretary of the Department of Health and Human Services and the Comptroller General of the United States, or the designees or duly authorized representative of either of them shall have access to all books and records of the parties pertaining to the subject matter of this Agreement and the provision of service under it, in accordance with the criteria presently or hereafter developed by the Department of Health and Human Services as provided in Section 952 of the Omnibus Reconciliation Act of 1980. Upon request by governmental authority, the parties shall make available (at reasonable times and places during normal business hours) this Agreement, and all books, documents and records of the parties that are necessary to verify the nature and extent of the costs and services provided by the parties furnished in connection with this Agreement. This provision shall survive termination of this Agreement.

XVI.

AMENDMENT / ASSIGNMENT.

XVII.

COMPLIANCE WITH APPLICABLE LAWS. CAPS shall comply with all federal, state and local laws, regulations and governmental orders, including applicable State Board of Pharmacy regulations and USP Chapter <797>, in providing items or services pursuant to this Agreement.

CAPS shall represents and warrants to the other party that the party, and to its knowledge, its officers, directors and employees (i) are not currently excluded, debarred, or otherwise ineligible to participate in the federal health care programs as defined in 42 U.S.C. §1320a-7b(f) (the “federal healthcare programs”), (ii) have not been convicted of a criminal offense related to the provision of healthcare items or services but have not yet been excluded, debarred, or otherwise declared ineligible to participate in the federal healthcare programs, and (iii) are not, to the best of its knowledge, under investigation or otherwise aware of any circumstances which may result in the party or such individual being excluded from participation in the federal healthcare programs. CAPS shall immediately notify the other party of any change in the status of the representations and warranty set forth in this section.

XVIII.

LIMITATION OF LIABILITY. CAPS shall not be liable to Madigan Army Medical Center for any indirect, incidental, special, punitive or consequential loss, damage or expense (including any damage for lost profits, or otherwise) directly or indirectly arising out of or in connection with the furnishing of IV services hereunder, or the development, use of, or inability to use any parenteral solutions, or otherwise, whether based in contract, warranty, tort, including without limitation, negligence, or any other legal or equitable theory. CAPS' total liability for any claim or action shall not exceed the amount paid for the order out of which such a claim or action arose. “This paragraph is an addendum to FAR 52.212-4(p) and shall be enforceable only to the extent permitted by federal law.”

XIX.

DISCLOSURE. If the pricing under this Agreement constitutes a discount or other reduction in price under Section 1128(b)(3)(A) of the Social Security Act 42 U.S.C. 1320a-7b(b)(3)(A), and 42 C.F.R. § 1001.952(h), Madigan Army Medical Center shall disclose the discount or reduction in price to the full extent required under any state or federal program which provides cost or charge based reimbursement to Madigan Army Medical Center for the IV solutions covered by this Agreement. This Act requires, among other things, that Madigan Army Medical Center fully and accurately report on any claim or request for payment it submits to Medicare and Medicaid the actual purchase price paid by Madigan Army Medical Center for products, net of any discounts, rebates or allowances provided to Madigan Army Medical Center hereunder. Madigan Army Medical Center may also be required, upon request, to provide documentation of the discount or other reduction in price to the Secretary of Health and Human Services.

XX.

ARBITRATION.

XXI.

SEVERABILITY. The invalidity or unenforceability of any provision or portion of any provision of this Agreement shall not affect the validity or enforceability of the remainder of the same provision or any other provision of this Agreement and each provision hereof or portion of such shall be enforced to the fullest extent permitted by applicable law.

XXII.

NOTICES. All notices, invoices, requests, and other communications required hereunder shall be in writing and shall be deemed to have been given when presented personally or when faxed directly and confirmed by telephone or mailed by certified, return receipt mail addressed to:

Madigan Army Medical Center

Central Admixture Pharmacy Services, Inc.

MCHJ-CLX (Pharmacy Department)

Corporate Office

9040A Fitzsimmons Dr. 2525 McGaw Ave

Tacoma, WA 98431-1000 Irvine, CA 92614-5895

Attn: Mr. Anthony L. Starr

Attn: Director of Sales

Title: Inventory Manager, Department of Pharmacy Telephone Number: (949) 660-2277

Telephone Number: (253) 968-3224

Fax Number: (949) 660-2361

Fax Number: (253) 968-0655

XXIII.

COMPLIANCE WITH JOINT COMMISSION STANDARDS. CAPS shall comply with all applicable standards established by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). CAPS staff, affiliate personnel, and any others providing services will be properly trained and credentialed and properly reviewed according to the requirements set forth by JCAHO.

XXIV. ENTIRE AGREEMENT.