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A TRUE COPY
<br />CERTIFICATION ON LAST PAGE
<br />PYAN L. BUTLER, CLERK
<br />Exclusions For Specialty Rebates: Member Submitted Claims, Subrogation Claims, Exclusive or Limited
<br />Distribution Products, COVID test kits, COVID antivirals, Vaccine Claims, OTC products (excluding insulin,
<br />diabetic supplies, and test strips), Claims Older than 180 days, Claims filled through In -House Pharmacies
<br />that do not utilize PBM for rebates, 340b Claims, COB claims, and claims pursuant to a 100% Member
<br />Copayment plan are not eligible for the guaranteed Rebate amounts set forth in Section D.1 above
<br />3. Rebate Payment Terms. Subject to the conditions set forth herein, Administrator will receive from ESI the
<br />quarterly Rebate payments within approximately one hundred twenty (120) days following the end of a
<br />calendar quarter for Rebates received during the prior calendar quarter. Upon receipt, Administrator will credit
<br />Client's account. For Prescription Drug Claims dispensed through in-house pharmacies, if applicable, Rebate
<br />payments shall only be paid if ESI is billing pharmaceutical manufacturers on behalf of the in-house
<br />pharmacies.
<br />4. Conditions
<br />4.1 PBM contracts with pharmaceutical manufacturers for Rebates on its own behalf and for its own
<br />benefit, and not on behalf of Client. Accordingly, PBM retains all right, title and interest to any and
<br />all actual Rebates received from manufacturers. PBM will pay to Administrator (and Administrator
<br />shall pay to Client) amounts equal to the Rebate amounts allocated to Client, as specified above, from
<br />PBM's general assets (neither Client, its Members, nor Client's Plan retains any beneficial or
<br />proprietary interest in PBM's general assets). Client acknowledges and agrees that neither it, its
<br />Members, nor its Plan will have a right to interest on, or the time value of, any Rebate payments
<br />received by PBM during the collection period or moneys payable under this Section. No amounts
<br />for Rebates will be paid until this Agreement, including any applicable Client Application, is
<br />executed by Client. PBM and Administrator will have the right to apply Client's allocated Rebate
<br />amount to unpaid Fees. PBM will retain Manufacturer Administrative Fees on Specialty Products.
<br />4.2 PBM reserves the right to adjust the Rebate guarantees if Rebate revenue is materially decreased
<br />because Brand Drugs move off -patent to generic status or due to a change in applicable law.
<br />4.3 Client acknowledges that it may be eligible for Rebate amounts under this Agreement only so long
<br />as Client, its affiliates, or its agents do not contract directly or indirectly with anyone else for
<br />discounts, utilization limits, Rebates or other financial incentives on pharmaceutical products or
<br />formulary programs for Prescription Drug Claims processed by PBM pursuant to the Agreement,
<br />without the prior written consent of PBM. In the event that Client negotiates or arranges with a
<br />pharmaceutical manufacturer for Rebates or similar discounts for any Covered Drugs hereunder, but
<br />without limiting PBM's right to other remedies, PBM may immediately withhold any Rebate
<br />amounts earned by, but not yet paid to, Client as necessary to prevent duplicative Rebates on Covered
<br />Drugs. To the extent Client knowingly negotiates and/or contracts for discounts or Rebates on claims
<br />for Covered Drugs without prior written approval of PBM, such activity will be deemed to be a
<br />material breach of this Agreement, entitling PBM to suspend payment of Rebate amounts hereunder
<br />and to renegotiate the terms and conditions of this Agreement.
<br />4.4 Under its Rebate program, PBM may implement PBM's Formulary management programs and
<br />controls, which may include, among other things, cost containment initiatives, and communications
<br />with Members, Participating Pharmacies, and/or physicians. PBM reserves the right to modify or
<br />replace such programs from time to time. Guaranteed Rebate amounts, if any, set forth herein, are
<br />conditioned on adherence to various Formulary management controls, benefit design requirements,
<br />claims volume, and other factors stated in the applicable pharmaceutical manufacturer agreements,
<br />as communicated by PBM to Client from time to time. If any government action, change in law or
<br />regulation, change in the interpretation of any law or regulation, or any action by a pharmaceutical
<br />manufacturer has an adverse effect on the availability of Rebates, then PBM and Administrator may
<br />make an adjustment to the Rebate terms and guaranteed Rebate amounts, if any, hereunder.
<br />4.5 Subject to the conditions set forth herein, the quarterly rebates paid to Client shall be reduced by the
<br />aggregate difference between the Anchor Date Rebate (defined herein) plus an Inflationary Factor
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<br />NOT FOR DISTRIBUTION. THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL, PROPRIETARY
<br />AND CONSTITUTES TRADE SECRETS OF ESI AND RXBENEFITS
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