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E. The following pricing assumptions shall apply for purposes of this Agreement: <br />1. If Client decides to implement a mandatory generic, mandatory mail, step therapy or other program during the <br />Term, ESI has agreed that proposed pricing terms other than rebate guarantees will remain unchanged. <br />2. ESI must agree to propose pricing based on its broad national retail network that includes all major national <br />and regional pharmacy chains. <br />DISCOUNTS <br />3. The proposed "effective"eg neric discount and theeg neric discount guarantee calculation INCLUDES the <br />following: <br />MAC Generics <br />Non -MAC Generics <br />Single Source Generics <br />Multi -Source Generics <br />Generics in their FDC -granted exclusivity period <br />Patent litigated claims <br />Generics with limited supply <br />Generic medications prescribed and/or dispensed in conjunction with a specialty medication <br />5. All Claims filled in Most Favored Nation states are INCLUDED in discount guarantees. <br />6. All Claims filled in rural pharmacies are INCLUDED in discount guarantees. <br />7. Ingredient Cost (including Member share) is defined as the lesser of the following: <br />AWP -Discount %; <br />MAC Price; or <br />Usual & Customary Price. <br />8. Discount will always be calculated using this formula (all Claims, including ZBDs): <br />(1- [Ingredient Cost] / [AWP Price]) x 100. <br />9. "Gross Cost" is defined as: [Ingredient Cost] + [Dispensing Fee] + [Sales Tax]. <br />10. ESI agrees to apply Client -specific guarantees to all pricing components: <br />Discounts <br />Rebates <br />Admin Fees <br />Dispensing Fees <br />11. During the Term, contract guarantees will not change unless one of the following items occurs which could <br />change the economics of the pricing arrangement and would need to be evaluated: (i) a change in assumption <br />or plan design; (ii) change in law; and/or (iii) change in pricing benchmarks. <br />12. There will be NO dispensing fee applied to Reversed/Rejected Claims. <br />CLAIMS ADJUDICATION <br />13. There will be no price floors for amount paid on any Prescription Drug Claims. <br />REBATES <br />NOT FOR DISTRIBUTION. THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL, PROPRIETARY AND <br />CONSTITUTES TRADE SECRETS OF ESI AND RXBENEFITS <br />15 <br />