Exhibit 10.30

Execution Version

PHARMACY BENEFIT MANAGEMENT SERVICES AGREEMENT

by and among

WellPoint, Inc., on behalf of itself and its Designated Affiliates
and

Express Scripts, Inc., on behalf of itself and its subsidiaries

          THIS PHARMACY BENEFIT MANAGEMENT SERVICES AGREEMENT (“Agreement”) is dated as of December 1, 2009, by and among WellPoint, Inc., on behalf of itself and its Designated Affiliates (hereinafter referred to collectively as “WellPoint”), and Express Scripts, Inc., on behalf of itself and its subsidiaries (“PBM”) (collectively, WellPoint and PBM are referred to as the “Parties,” and each separately as a “Party”).

RECITALS

          WHEREAS, WellPoint offers health benefit plans in the group, individual, and federal market places;

          WHEREAS, WellPoint desires to retain PBM to provide certain pharmacy benefit management services, as more fully set forth in this Agreement, with respect to such health plans;

          WHEREAS, PBM desires to provide WellPoint certain pharmacy benefit management services, as set forth in this Agreement, with respect to health plans;

          NOW, THEREFORE, in consideration of the terms and conditions set forth in this Agreement, the Parties agree as follows:

1.

DEFINITIONS

	1.1		“Affiliate” shall mean any entity controlling or controlled by or under common control with a Party, at the time of execution of the Agreement and any time thereafter, where “control” is defined as (a) the ownership of at least fifty percent (50%) of the equity or beneficial interest of such entity, or (b) any other entity with respect to which such Party has significant management or operational responsibility (even though such Party may own less than fifty percent (50%) of the equity of such entity).
	1.2		“Assistance Event” shall mean an insourcing occurrence or termination of this Agreement.

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	1.3		“Association” shall mean the Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield Companies.
	1.4		“Average Wholesale Price” or “AWP” shall mean the average wholesale price of a prescription drug as established and reported by the Pricing Source. The applied AWP of a drug shall be the AWP for the actual eleven (11) digit National Drug Code (“NDC”), drug specific, quantity appropriate to the actual package size dispensed to a Covered Individual and submitted by a Network Pharmacy, mail order Pharmacy, or Specialty Pharmacy at the time that the prescription is filled. For mail order prescription drugs, PBM shall not use AWPs of licensed re-packagers where the data source identifies an AWP price greater than the AWP price reported by the pharmaceutical manufacturer. PBM shall update AWP data no less than weekly.
	1.5		“Brand” shall mean the marks, symbols or logos of the Association.
	1.6		“Brand Drug” shall mean a prescription drug product that is not a Generic Drug.
	1.7		“Brand Regulations” shall mean any and all rules promulgated by the Association that set standards regarding the use of any Blue Cross and Blue Shield products, services, programs, marks, symbols or logos.
	1.8		“Claim” shall mean an electronic or paper request for reimbursement as a result of a Pharmacy (or other provider in a manner described in Section 1.51 hereof) dispensing a Covered Prescription to a Covered Individual.
	1.9		“Compound Drug” shall mean a mixture of two or more ingredients when at least one of the ingredients in the preparation is a federal legend drug or state restricted drug in a therapeutic amount. It excludes the addition of only water or flavoring to any preparation.
	1.10		“Contract Quarter” means, throughout the term of this Agreement, the three (3) month period (or portion thereof) commencing on the Effective Date and each January 1, April 1, July 1 or October 1 thereafter.
	1.11		“Contract Year” means, throughout the term of this Agreement, the twelve (12) month period (or portion thereof) commencing on the Effective Date and each January 1 thereafter.
	1.12		“Cost Share” shall mean, with respect to Covered Services, an amount which a Covered Individual is required to pay under the terms of the applicable Plan. Such payment may be referred to as an allowance, coinsurance, copayment, deductible, penalty or other Covered Individual payment responsibility, and may be a fixed amount or a percentage of applicable payment for Covered Services rendered to the Covered Individual.

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	1.13		“Coverage Document” shall mean a written document, and any addenda or endorsements that provide for administrative services by WellPoint, and describe the benefits, services, exclusions, limitations and conditions that are available for or applicable to coverage under the applicable Plan’s prescription drug benefit program. Prior to implementation of any Plan pursuant to this Agreement, WellPoint shall complete PBM’s standard set-up forms, which when completed and signed by WellPoint, will describe the essential benefit elements of the Coverage Document, including, but not limited to, the coverage rules adopted by the Plan sponsor. PBM shall use these completed set-up forms for purposes of administering a Plan’s prescription drug program.
	1.14		“Covered Individual” shall mean an individual who is eligible, as determined by WellPoint, to receive Covered Services under a Plan.
	1.15		“Covered Quantity” shall mean a quantity of a Covered Prescription as allowed by law and the Plan and authorized by a prescriber.
	1.16		“Covered Refill” shall mean refills of a Covered Quantity of a Covered Prescription as allowed by law and the Plan and authorized by a prescriber.
	1.17		“Covered Service” or “Covered Prescriptions” shall mean any medically necessary drugs, devices, supplies, equipment, and other items (which may include insulin, disposable insulin syringes, and other diabetic supplies) dispensed to a Covered Individual for which such Covered Individual is entitled to receive in accordance with and subject to the terms and conditions (including any Covered Quantity, Covered Refill, or other limiting provisions) of the applicable Plan, including all services usually and customarily rendered by a Pharmacy in the normal course of business, including but not limited to dispensing, counseling, and product consultation.
	1.18		“Delegated Organization Policy and Procedure Manual” or “Delegation Manual” shall mean the manual furnished by WellPoint to PBM which describes WellPoint’s policies and procedures and sets forth NCQA/URAC standards to be followed by PBM for those activities that WellPoint has delegated to PBM under this Agreement.
	1.19		“Designated Affiliates” shall mean an Affiliate of WellPoint that receives services from PBM pursuant to this Agreement. The initial Designated Affiliates as of the Effective Date are identified in Exhibit M. WellPoint shall, following the Effective Date and throughout the Term promptly: (i) update Exhibit M to include any such future Designated Affiliate; and (ii) coordinate execution of a written instrument between the parties to amend Exhibit M accordingly. WellPoint shall ensure absolutely, be responsible for and liable for the performance of any and all obligations (monetary or otherwise) of the Designated Affiliates (and any such Designated Affiliates’s successors and assigns) in connection with, and under, this

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			Agreement. In no event shall WellPoint take any position (legal or otherwise) inconsistent whatsoever with the intent of the foregoing sentence.
	1.20		“Dispensing Fee” shall mean the amount charged by PBM to WellPoint and Covered Individuals for professional services rendered by a licensed pharmacist for providing Covered Services to Covered Individuals.
	1.21		“Duplicate Claim” shall mean a Claim that has the same Pharmacy, Covered Individual, date of service, prescription number and NDC as another Claim.
	1.22		“Effective Date” shall mean December 1, 2009.
	1.23		“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and regulations issued thereunder from time to time by the Department of Labor.
	1.24		“FEHBP” shall mean the Federal Employees Health Benefits Program.
	1.25		“Formulary” shall mean any continually updated list and classification of approved prescription drugs based on a review of their clinical efficacy, safety, uniqueness and cost effectiveness.
	1.26		“Generic Drug” shall mean a prescription drug, whether identified by its chemical, proprietary, or non-proprietary name that is accepted by the U.S. Food and Drug Administration as therapeutically equivalent and interchangeable with drugs having an identical amount of the same active ingredient. For purposes of the [*], the Generic Drug determination will be made by PBM, for all of its clients, using indicators from the Pricing Source on the basis of PBM’s standard proprietary brand/generic algorithm, a copy of which will be provided to WellPoint upon request. [*]. PBM shall provide written notice of changes (i.e., additions or deletions) to the list of Generic Drugs within thirty (30) days of any such changes to the list.
	1.27		“Government Entity” shall mean the United States of America, the states, counties, municipalities, any district, department, agency, or other political division thereof, or any political subdivision of any of the foregoing, and any court or instrumentality having or exercising jurisdiction over either of the Parties.
	1.28		“HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996 and regulations issued thereunder from time to time.

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	1.29		“Implementation” shall mean the migration of in-force WellPoint business to PBM, addition to new Plans sold or business acquired and the implementation of new benefits for existing benefits.
	1.30		“Ingredient Cost Charge” shall mean the ingredient cost portion of the amount charged by PBM to WellPoint and Covered Individuals for a prescription drug at the time PBM bills WellPoint.
	1.31		“MAC List” means a list of prescription drug products identified as readily available as Generic Drugs, generally equivalent to a Brand Drug (in which case the Brand Drug may also be on the MAC List) and which are deemed to require pricing management due to the number of manufacturers, utilization and pricing volatility. PBM shall provide WellPoint with a list of the drugs on the MAC List quarterly. Whether a Claim processes at the generic Ingredient Cost Charge is subject to the Covered Prescription’s inclusion on the MAC List and the application of “dispensed as written” protocols and Plan defined plan design and coverage policies. [*]
	1.32		“Mail Order Pharmacy Services” shall mean the dispensing of prescription drugs and products through PBM’s licensed mail order Pharmacy.
	1.33		“Manufacturer Administrative Fee” shall mean the fees paid to PBM by pharmaceutical manufacturers pursuant to a contract between PBM and the pharmaceutical manufacturer and directly in connection with PBM’s administering, invoicing, allocating and collecting the Rebates under PBM’s Rebate program.
	1.34		“Maximum Reimbursement Amount” or “MRA” is the price charged to WellPoint for a prescription drug product on PBM’s MAC List.
	1.35		“Medically Necessary” or “Medical Necessity” shall mean the prescription drug(s) that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that is (1) in accordance with generally accepted standards of medical practice; (2) clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient’s illness, injury or disease; and (3) not primarily for the convenience of the patient, physician, or other health care provider, and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient’s illness, injury or disease. For these purposes, “generally accepted standards of medical practice” shall mean the standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community, physician specialty society recommendations and the view of physicians practicing in relevant clinical areas and any other relevant factors, along with any other materials or compendia required by law or accreditation standard.
	1.36		[*]

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	1.37		[*]
	1.38		“Network Pharmacy” shall mean a Pharmacy (including PBM’s mail order Pharmacy and Specialty Pharmacies) that has: (a) met the credentialing and re-credentialing standards of PBM and the applicable requirements of federal or state law; (b) contracted as an independent contractor directly with PBM or is operated by PBM or one of its Affiliates; and (c) agreed to accept discounted rates or fees as payment in full for Covered Prescriptions provided to Covered Individuals, subject to applicable Cost Share.
	1.39		“NCQA” shall mean the National Committee for Quality Assurance, an accreditation program for managed care organizations.
	1.40		“Other Manufacturer Revenues” shall mean any monetary amount that is to be remitted to PBM or its Affiliates from a pharmaceutical manufacturer pursuant to a written agreement between PBM or its Affiliates or agent of PBM or its Affiliates and such pharmaceutical manufacturer or agent of the pharmaceutical manufacturer which may or may not be based on the utilization of specific products processed for a Covered Individual. Other Manufacturer Revenues shall include any other administrative fees, fees for data, or fees for Formulary management communications or other clinical services paid by pharmaceutical manufacturers to PBM. Notwithstanding the foregoing, Other Manufacturer Revenues shall not include Pharma Revenue, Rebates or Manufacturer Administrative Fees as defined herein.
	1.41		“Paid Claim” shall mean a Claim that meets coverage requirements and is subsequently paid. All Claims with an associated Rejected Claim, Reversed Claim, or Duplicate Claim shall not be considered Paid Claims and are excluded from the financial and/or service fee considerations.
	1.42		“PBM Agents” shall mean the agents, subcontractors and representatives of the PBM.
	1.43		“Pharma Revenue” shall mean Rebates and Manufacturer Administrative Fees.
	1.44		“Pharmacy” means a retail, mail order, or Specialty Pharmacy whose license is in good standing with the appropriate licensing or governing body of the applicable government authority.
	1.45		“Plan” shall mean any group or individual benefit plan issued or administered by WellPoint, including but not limited to group health plans subject to ERISA, state and local government plans, and plans offered through Medicare, Medicaid or FEHBP, which receive prescription drug benefits under this Agreement.
	1.46		“Pricing Source” shall mean First DataBank or other nationally recognized third-party pricing source selected by PBM for all of its clients. PBM shall consult with

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			WellPoint concerning, and provide [*] prior written notice of, any change in the Pricing Source. Pricing Source changes shall be subject to the price adjustment provisions in Section 5.4(e). PBM shall not utilize more than [*] Pricing Source hereunder and shall use the same updated national drug file for invoicing WellPoint and for paying Network Pharmacies.
	1.47		“Rebate” shall mean the contractual retrospective formulary rebates that are paid to PBM from a pharmaceutical manufacturer pursuant to a written agreement between PBM and such pharmaceutical manufacturer that is negotiated independently by PBM with such pharmaceutical manufacturer, and directly attributable to the utilization of certain pharmaceuticals by Covered Individuals. Rebates shall not include Manufacturer Administrative Fees, Other Manufacturer Revenues, and any other administrative fees, fees for data, or fees for Formulary management communications or other clinical services paid by pharmaceutical manufacturers, or any other fees paid to PBM or its Affiliates, should they exist.
	1.48		“Rejected Claim” shall mean a Claim that is not paid.
	1.49		“Reversed Claim” shall mean a Claim that initially is paid but a subsequent Claim with the same Pharmacy, Covered Individual, prescription number, and NDC was submitted for reversal of payment.
	1.50		“Single Source Generic Drugs” shall mean those Generic Drugs which are provided by [*], including an authorized Generic Drug. Single Source Generic Drugs shall cease to be considered Single Source Generic Drugs at such time as [*], or after the first [*] from the day of the first Generic Drug approval as reported by the Pricing Source, whichever comes first. PBM shall provide WellPoint with the list of Single Source Generic Drugs quarterly.
	1.51		“Specialty Drug” shall mean those injectable and non-injectable drugs typically having one or more of several key characteristics, including but not limited to: frequent dosing adjustments and intensive clinical monitoring to decrease the potential for drug toxicity and increase the probability for beneficial treatment outcomes; intensive patient training and compliance assistance to facilitate therapeutic goals; limited or exclusive product availability and distribution; specialized product handling and/or administration requirements and/or cost in excess of $500 for a 30-day supply. PBM’s current Specialty Drug list is attached hereto as Exhibit F. PBM shall update such list of Specialty Drugs as new drugs are brought to market and will consult with and add drugs at the reasonable request of the WellPoint Specialty Steering Committee. Notwithstanding the foregoing, WellPoint acknowledges and agrees that PBM shall price all such additional drugs consistent with its standard practices, acting reasonably and in good faith. All such updates shall be made available to WellPoint and Plans in a timely manner. Specialty Drug shall not include specialty drugs obtained through a physician or any other provider other than a Network Pharmacy, unless WellPoint is able to transmit a Claim for such specialty drug in an electronic manner consistent with this Agreement.

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	1.52		“Specialty Pharmacy” shall mean a Network Pharmacy that provides Specialty Drugs to Covered Individuals. Notwithstanding the foregoing, WellPoint agrees that except for those limited instances where WellPoint is contractually obligated with one or more of its providers to provide access to Specialty Drugs through the provider’s owned or operated specialty pharmacy (e.g., an academic medical center) (a “WellPoint-Contracted Specialty Pharmacy”), or where PBM is unsuccessful in securing access to limited distribution or other Specialty Drugs, WellPoint and the Plans shall use PBM’s wholly-owned Specialty Pharmacy (“PBM’s Specialty Pharmacy”) as the exclusive provider of Specialty Drugs. WellPoint agrees to administer benefit designs for its Plans accordingly to the extent permitted by law. Nothing herein shall be deemed to restrict or limit in any manner WellPoint’s or the Plans’ ability to contract directly with Specialty Pharmacies (or specialty pharmacies) to provide specialty pharmacy services which are covered under the Plan’s medical benefit, rather than the pharmacy benefit.
	1.53		“Term” shall mean the period beginning on the Effective Date and continuing until the later of: (i) ten (10) years from the Effective Date, or (ii) December 31, 2019.
	1.54		“Transition Assistance Period” shall mean each period of time, as agreed to by WellPoint and PBM, after the commencement of an Assistance Event, during which period PBM shall provide Transition Assistance Services.
	1.55		“Transition Assistance Services” shall mean (a) services as described in Section 6.4 provided by PBM (including the terminated, insourced, or expired services and, in each case, any replacements thereof or supplements thereto), to the extent WellPoint requests such services during a Transition Assistance Period, (b) PBM’s cooperation with WellPoint or any third party designated by WellPoint in the transfer of the services (or replacement or supplemental services) to WellPoint or a third party and (c) any services described in Section 6.4 which are requested by WellPoint in order to facilitate the transfer of services (or replacement or supplemental services) to WellPoint or a third party.

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	1.56		“Transition Services Agreement” shall mean that certain Transition Services Agreement by and between WellPoint and PBM, dated December 1, 2009.
	1.57		“URAC” shall mean an accreditation program for pharmacy benefit management entities.
	1.58		“Usual and Customary (U&C) Charge” shall mean the amount a regular cash-paying customer pays a Pharmacy for a pharmaceutical good or service and is submitted to PBM. PBM shall require Network Pharmacies to submit their Usual and Customary Charges with all Claim submissions.
	1.59		“Usual and Customary (U&C) Claim” shall mean a Claim where the Ingredient Cost Charge plus the Dispensing Fee is greater than or equal to the Usual and Customary Charge for a Pharmacy for a pharmaceutical good or service. [*]. The calculation for the identification of these Claims will be as follows: Usual and Customary Claim Calculation: U&C — (Ingredient Cost Charge + Dispensing Fee) = Less than or equal to “0” (zero).

2. DUTIES AND AUTHORITY OF WELLPOINT

2.1

Offer Drug Benefits to Plans.

	(a)		WellPoint will offer to Plans the prescription drug benefits administered by the PBM pursuant to this Agreement. WellPoint will be the entity that enters into the Coverage Documents with a Plan or sponsor(s) of such Plan, and such Coverage Documents may make available other WellPoint products and services.
	(b)		WellPoint will have exclusive authority and responsibility for account management of all Plans. PBM shall, at the request of WellPoint, support WellPoint’s account management teams in the support of WellPoint’s Plans, including cooperating with, and supporting, Plan audits.
	(c)		WellPoint shall provide Covered Individuals with access to websites which will provide the Covered Individual with various services, information and tools related to the pharmacy benefit. PBM shall provide WellPoint, at no additional charge, with web support and assistance, including PBM’s web tools, content and enhancements currently in place and those developed in the future. PBM will provide such services in accordance with all applicable provisions of this Agreement, including, but not limited to, Exhibit L. PBM will ensure that all Covered Individuals have access to all of PBM’s functionality and services. PBM will also ensure that Covered Individuals do not have direct access to PBM’s website and are redirected to the WellPoint or Plan site, in a manner specified or approved by WellPoint. Initially, WellPoint and PBM shall provide Covered Individuals with single sign-on link(s) from their respective Plan sites (i.e., Anthem.com) to an express-

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			scripts.com co-branded site. The co-branding shall consist of the PBM’s logo and the applicable Plan logo. In addition, PBM will work with WellPoint on the development of an integrated approach, wherein the Covered Individual would have access to PBM’s functionality and services within the architecture of the Plan site. The parties shall make a good faith effort to continue the development of an integrated approach and implement as soon as reasonably possible, in a timeframe and manner consistent with the release of WLP/Anthem next generation website and the planned migrations to ESI systems.
	(d)		WellPoint will produce and distribute ID cards which shall include PBM’s bin number and customer service number to Covered Individuals.

	2.2		Furnish Data to PBM. WellPoint shall provide eligibility, enrollment and other data reasonably necessary for PBM to perform its obligations under this Agreement as determined by the Parties (“WellPoint Data”) via electronic media transfer in a form mutually agreeable to the Parties (the “Eligibility File”), and on a periodic basis as agreed between the Parties. In the event PBM knows or has reason to know that the WellPoint Data is inaccurate or incomplete, PBM shall notify WellPoint of the same as soon as feasible. WellPoint shall be responsible for payment to PBM for all Claims during the period of the Covered Individual’s eligibility as indicated on the Eligibility File, including for retroactively termed Covered Individuals, except in the event of PBM’s error in loading and/or administering the Eligibility File. [*]
	2.3		Regulatory Compliance. WellPoint, at its own cost, shall (i) obtain and maintain all federal, state, and local licenses, permits, certificates, and other regulatory approvals that are necessary for WellPoint to perform its obligations under this Agreement and shall supply evidence of such licensure, compliance and certifications to PBM upon request; (ii) comply with all applicable laws in offering the prescription drug benefits to Plans and performing its obligations under this Agreement, including, but not limited to, all federal or state laws relating to fraudulent, abusive, or unlawful practices connected in any way with the provision of health care items or services, cost reporting requirements, or the billing for or claims for reimbursement for such items or services provided to a beneficiary of any state, federal, or other governmental health care or health insurance program or any non-governmental health care plan or health insurance arrangement; and (iii) use best efforts to provide promptly to PBM, but not later than ten (10) business days after receipt by WellPoint (or such longer period of time as reasonable under the circumstances, but in all cases promptly), information regarding potentially adverse material inquiries received by WellPoint, which are directly related to WellPoint’s performance of this Agreement, from accreditation agencies or governmental authorities, subject to applicable confidentiality constraints.
	2.4		Benefits Design. WellPoint shall consult with PBM concerning modifications to benefits design, which shall include consideration of the impact of any such modification to the respective economic position of each Party. To the extent that

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			any such plan design modification would have the effect of materially lowering the amount of Pharma Revenue paid to PBM, WellPoint agrees that it shall only implement such plan design modification after the Parties have mutually agreed to an equitable adjustment to the Pharma Revenue guarantees as necessary to maintain PBM’s contracted economic position as of the Effective Date. Subject to the foregoing, WellPoint shall retain discretion and control regarding benefit design decisions with respect to Plans.
	2.5		Formulary Design.

	(a)		WellPoint shall consult with PBM on a regular basis concerning modifications to Formulary design, which shall include consideration of the impact of any such modification to the respective economic position of each Party. To the extent that any such Formulary design modification would have the effect of materially lowering the amount of Pharma Revenue paid to PBM, WellPoint agrees that it shall only implement such Formulary design modification after the Parties have mutually agreed to an equitable adjustment to the Pharma Revenue guarantees as necessary to maintain PBM’s contracted economic position as of the Effective Date. Subject to the foregoing, WellPoint shall retain discretion and control with respect to all Formulary designs.
	(b)		WellPoint is the sole owner of the Formularies which are administered on its behalf by PBM. WellPoint maintains all right, title, and interest in the Formularies, as updated and amended from time to time, and such Formularies shall be considered the work product of WellPoint. For all non-material changes to the Formulary, WellPoint shall provide notice to PBM of Formulary changes within thirty (30) business days after formulary change determinations. For all Formulary changes that would have the effect of materially lowering the amount of Pharma Revenue paid to PBM, Section 2.5(a) above shall control (i.e., any such change shall not be made until the process set forth in Section 2.5(a) above is concluded). PBM shall cease using such Formularies upon termination of this Agreement for any reason. PBM shall have no right to use any Formulary developed by WellPoint after the termination of this Agreement for any reason.

	2.6		P&T and VA Committees. Throughout the Term of this Agreement, WellPoint shall maintain its own Pharmacy and Therapeutic (“P&T”) and Value Assessment (“VA”) committees. WellPoint will control all P&T and VA committee processes and functions including, without limitation, the continued use of WellPoint’s Health Technologies Assessment Guidelines and clinical appraisal Clinical Review Committee (“CRC”) process.
	2.7		Right to Negotiate Rebates. [*] In general, PBM will utilize its standard proprietary Rebate processes and contracts with respect to this Agreement in order to maximize efficiencies. [*]

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	2.8		Approval and Distribution of Materials to Plans. WellPoint shall review and approve (which approval shall not be unreasonably withheld) any and all communications (written, electronic or otherwise) to Plans, Covered Individuals, WellPoint contracted providers (nothing in the foregoing shall be construed to grant WellPoint review and approval rights with respect to PBM’s communications with PBM contracted Network Pharmacies), or other WellPoint stakeholders relating to prescription drug services provided under this Agreement and shall have the authority to distribute directly, or direct the PBM to distribute on its behalf, such materials. PBM shall comply with all applicable Brand Regulations, as directed by WellPoint, in connection with its preparation and distribution of communications under this Agreement.
	2.9		Administrative Fees, Pricing and Other Costs. WellPoint shall pay PBM compensation for Claims (other than amounts that are reasonably disputed) according to the Claims payment method described in Exhibit C. WellPoint shall pay the administrative and other fees set forth in Section 5 and Exhibit A (other than amounts that are reasonably disputed) according to the administrative service fee payment method described in Exhibit C.
	2.10		Pricing Differential.

	(a)		WellPoint reserves the right to offer its Plans a network reimbursement rate and/or Rebate payment that is different from the [*] and Pharma Revenue Guarantees set forth in this Agreement, provided that WellPoint shall provide such disclosures to Plans as may be required by applicable law or as it otherwise deems appropriate under the circumstances. Such pricing differentials shall include, but not be limited to, Brand Drug and Generic Drug discounts, Specialty Drug discounts, Dispensing Fees, access fees, administrative fees, and Pharma Revenue payments for Prescription Drugs dispensed at retail, mail and specialty Network Pharmacies. Further, such pricing differentials may include any or all of WellPoint’s lines of business, including without limitation any group, individual, Medicare, Medicaid or FEHBP customers.
	(b)		Upon request from WellPoint, and on a Plan by Plan basis, PBM shall load the pricing received from WellPoint at the Plan level prior to the implementation of the effective date of such pricing. The Plan level pricing shall be included in the Claims Detail Layout file provided by PBM to WellPoint. Such Claims Detail Layout file shall be used by WellPoint to invoice its Plans. Additionally, PBM shall reconcile the Plan level pricing with the contract pricing no less than monthly and provide WellPoint with a credit on the next invoice immediately following such reconciliation.

2.11

Complaints/Appeals and Grievances. WellPoint shall be responsible for all Plan, provider and Covered Individual grievances and appeals.

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	2.12		Access to Eligibility System. WellPoint will provide PBM personnel access to its eligibility system for the purpose of addressing customer service calls. In addition, WellPoint will be responsible for providing appropriate training to PBM personnel relating to its online system.
	2.13		Prior Authorization/ Utilization Review/Specialty Care Management. WellPoint shall delegate certain utilization management and Specialty Drug care management functions (hereinafter referred to collectively as “Delegated Functions”) to the PBM with respect to Plans and Covered Individuals as described in Exhibit G or WellPoint’s Specialty Drug Care Management Guidelines (“Specialty Guidelines”), as appropriate. Such activities will be implemented in accordance with WellPoint’s prior authorization and Specialty Guidelines (including Specialty Drug dose management guidelines which specify that the medication dosage billed to the Covered Individual shall be consistent with WellPoint’s and standard medical practice guidelines for dosage) and as detailed in Exhibit G or the Specialty Guidelines, as appropriate. WellPoint may revoke or modify this delegation at any time and to any extent during the Term of this Agreement.
	2.14		Pharmacy and Therapeutics Programs, Clinical Programs and Services. WellPoint shall have the authority to offer existing and new pharmacy and therapeutics programs and clinical programs and services (collectively, “Programs”) to Plans and Covered Individuals. WellPoint shall provide P&T drug monographs to its Plans. WellPoint shall consult with PBM regarding the potential operational efficiencies related to such Programs. PBM agrees to provide consulting and technical support in the development, improvement and implementation of such Programs and to administer such Programs.
	2.15		Insourcing of PBM Duties and Authority. WellPoint may insource any of the duties and authority allocated to PBM under this Agreement only pursuant to the process provided for in this Section 2.15. Prior to insourcing any such duties, WellPoint shall identify issues with regard to PBM’s performance of any such duties under this Agreement for resolution by the Joint Operating Pharmacy Committee pursuant to the procedures provided for in Section 4.1. Any such issue must rise to the level of non-performance by PBM such that it would provide a basis for termination by WellPoint under Section 6.2(a). If such issues are not resolved by the Joint Operating Pharmacy Committee, WellPoint may insource services performed by PBM under this Agreement solely to the extent necessary to resolve the issues identified by WellPoint. The Parties agree that, to the extent WellPoint exercises such authority, the Parties will in good faith negotiate a revision to the economic terms of the Agreement to preserve the Parties’ relative economics prior to WellPoint’s exercise of such authority. Upon WellPoint’s request, PBM shall provide Transition Assistance Services with respect to any such insourced or resourced Services as provided in Section 6.4(a) through (c).
	2.16		WellPoint Systems.

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

(a)

WellPoint will retain ownership over certain current information systems that support WellPoint’s affiliated pharmacy benefit management business as set forth in the separate Transition Services Agreement. Until WellPoint’s business is fully migrated over to PBM’s systems and operations, WellPoint shall continue to provide support services pursuant to the terms of the Transition Services Agreement. Notwithstanding WellPoint’s provision of such support services under the Transition Services Agreement, PBM shall not be relieved of its duties under this Agreement, except that during the migration of WellPoint’s business over to PBM’s systems and operations, PBM shall not be subject to the performance guarantees set forth on Exhibit D or Exhibit I (except as mandated by CMS and at such CMS mandated levels) for groups and individuals, covered under Plans, that are not fully migrated to PBM’s systems and operations. Penalties for missed performance guarantees for fully migrated groups and individuals shall be prorated based on the percentage of lives fully migrated to PBM’s systems and operations. Groups and individuals will be migrated to the following PBM systems during the transition: (1) adjudication platform; (2) call center systems; (3) order processing systems; and (4) fulfillment management systems. When a group or individual is fully migrated to all four (4) of these PBM systems (“Completed Migration”), the PBM shall thereafter by held accountable under the following operational performance guarantees for such migrated groups and individuals during the transition:

	-		Account Management Services
	-		Member Customer Service
	-		Pharmacy Customer Service
	-		Pharmacy Network
	-		Retail Claims Processing
	-		Mail Order Services
	-		Reporting
	-		Generic Dispensing Rates
	-		Miscellaneous Services
	-		Utilization Management
	-		Medicare Part D

(b)

Implementation Services guarantees are calculated every six (6) months following the Effective Date. At each such period, the Implementation Services guarantees will be calculated in the aggregate for those groups and individuals that have been fully migrated to PBM systems and operations. This measurement process (i.e., every six (6) months) will continue until every group and individual served by a Plan is fully migrated to PBM’s systems and operations. Any penalties that may be due as a result of PBM failing to meet the Implementation Services guarantees will be prorated based on the percentage of lives fully migrated to PBM’s systems during any such six (6) month period.

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	(c)		Once WellPoint’s business is fully migrated over to PBM’s systems and operations, as mutually agreed to by the parties acting in good faith, the performance guarantees set forth on Exhibit D and Exhibit I shall thereafter be of full force and effect.
	(d)		Notwithstanding anything in this Agreement to the contrary, in no event shall WellPoint’s right to terminate this Agreement pursuant to Section 6.2(a) as a result of a Material PG Breach by PBM be of any force or effect until such time as WellPoint’s business is fully migrated over to PBM’s systems and operations as determined by the Parties pursuant to Section 2.16(c) above.

2.17

[*]

3. DUTIES AND AUTHORITY OF PBM

3.1

Administrative Services.

	(a)		PBM shall provide the administrative services (including the Implementation support services) to WellPoint, Plans and Covered Individuals set forth in this Agreement. To the extent services to be performed by PBM are not more fully described in this Agreement the Parties agree to execute an addendum to the Agreement to reflect the rights and obligations of the Parties with respect to those services. WellPoint shall cooperate with PBM’s performance of the administrative services to be provided by PBM pursuant to this Agreement. PBM shall perform these services on behalf of WellPoint in a prudent and expert manner in accordance with this Agreement and all applicable laws.
	(b)		Except to the extent that, following the Effective Date, WellPoint elects to implement programs or additional services (with PBM administrative fees agreed to by the Parties), the fees set forth in Exhibit A shall include all of the fees and compensation to be paid by WellPoint for the administrative services set forth in this Agreement. PBM agrees that it shall not impose any additional fee for any services during the Term of this Agreement without the prior written consent of WellPoint.

3.2

Regulatory Compliance.

(a)

During the Term of this Agreement, PBM shall, at its own cost: (i) obtain and maintain all federal, state, and local licenses, permits, certificates, and other regulatory approvals that are necessary for PBM to perform its obligations under this Agreement, including any state law requirements imposed upon WellPoint, Plans, or PBM that relate to PBM’s contracting with Network Pharmacies, and shall supply evidence of such licensure, compliance and certifications to WellPoint upon request; (ii) comply with all applicable laws in performing its obligations under this Agreement, including, but not limited to, all federal or state laws relating to fraudulent, abusive or unlawful practices

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			connected in any way with the provision of health care items or services, cost reporting requirements, or the billing for or claims for reimbursement for such items or services provided to a beneficiary of any state, federal or other governmental health care or health insurance program or any non-governmental health care plan or health insurance arrangement; and (iii) use best efforts to provide promptly to WellPoint, but not later than ten (10) business days after receipt by PBM (or such longer period of time as reasonable under the circumstances, but in all cases promptly), information regarding potentially adverse material inquiries received by PBM from accreditation agencies, governmental authorities, or pharmaceutical manufacturers regarding PBM services delivered pursuant to this Agreement subject to applicable confidentiality constraints. Without limiting the generality of the foregoing, PBM shall, in the timeframe set forth above, forward to WellPoint all Department of Insurance complaints received by PBM, with respect to services provided under this Agreement, for response by WellPoint. PBM shall cooperate fully with WellPoint in responding to such complaints, including providing all information reasonably necessary, and to the extent PBM has such information, for WellPoint to respond to Department of Insurance complaints. From time to time legislative bodies, boards, departments or agencies may enact or issue laws, rules, or regulations pertinent to this Agreement, and, subject to Section 16.3, PBM agrees to abide by all said laws, rules, or regulations to the extent applicable.
	(b)		PBM represents and warrants that at the time of entering into this Agreement, neither it nor its Affiliates nor any of their employees, contractors, subcontractors or agents are ineligible persons identified on the General Services Administration’s List of Parties Excluded from Federal Programs (available through the internet at http://www.epls.gov/ or its successor) and the Health and Human Services Department/Office of Inspector General (“HHS/OIG”) List of Excluded Individuals/Entities (available through the internet at http://www.oig.hhs.gov/fraud/exclusions.asp or its successor), or as otherwise designated by the federal government. If PBM or any employees, subcontractors or agents thereof becomes an ineligible person after entering into this Agreement or otherwise fails to disclose its ineligible person status, PBM shall have an obligation to: (1) immediately notify WellPoint of such ineligible person status upon PBM becoming aware of such status through initial and periodic checks, and (2) within ten (10) days of such notice, remove such individual from responsibility for, or involvement with, the PBM’s business operations related to this Agreement.

3.3

Pharmacy Network.

(a)

Retail Network. PBM shall arrange through Network Pharmacies for the reasonable availability (more specifically described in Exhibit D) in number and geographic coverage to Covered Individuals of Covered Prescriptions from a network of Pharmacies and shall, during the entire period this

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			Agreement is in effect, maintain a network of Network Pharmacies of sufficient size to meet the needs of the Plans and Covered Individuals. PBM will use its best efforts to incorporate all Pharmacies that have been in WellPoint’s Pharmacy network (including WellPoint’s open specialty pharmacy network) so long as such Pharmacies meet PBM’s standard terms and conditions for contracting, including PBM’s credentialing requirements, and will also incorporate PBM’s mail order Pharmacy into the PBM’s network as Network Pharmacies no later than the Effective Date of this Agreement. PBM shall not use the Brands in contracting with the Pharmacies in such network. PBM shall give WellPoint at least thirty (30) days’ advance notice (or such lesser days’ notice if the provision of thirty (30) days’ notice is not feasible under the circumstances, but in such case, PBM shall be obligated to provide as reasonable amount of notice as feasible) of any material change in the network.
	(b)		PBM shall require its Network Pharmacies to be contractually obligated to meet PBM’s credentialing and re-credentialing standards including, but not limited to, maintenance of licensure and malpractice insurance, and shall meet the applicable requirements of federal and state law. PBM shall periodically monitor the continued compliance of Network Pharmacies with its standards and shall take appropriate action, which may include termination, suspension or placement in a probationary status, if a Network Pharmacy fails to comply.
	(c)		PBM shall provide on-line, real time, accurate and updated Network Pharmacy information to WellPoint.
	(d)		WellPoint may require PBM to terminate any specific Network Pharmacy from the Pharmacy networks serving WellPoint and its Plans.
	(e)		WellPoint may from time to time propose to PBM that PBM include a Pharmacy or group of Pharmacies in the Pharmacy Network. PBM shall use its best efforts to enter into a pharmacy contract with such Pharmacy, based on PBM’s standard terms and conditions. If PBM is unable to execute a pharmacy contract with the Pharmacy within sixty (60) days thereafter, WellPoint may, with PBM’s approval, have reasonable participation in the negotiations with that Pharmacy in order for PBM to enter into an agreement with that Pharmacy based upon PBM’s standard terms and conditions.
	(f)		Upon request from WellPoint, PBM shall create a custom retail Pharmacy network at no charge to WellPoint.
	(g)		Relationship of PBM and Network Pharmacies. PBM represents and warrants that it has contracted with Network Pharmacies, as independent contractors of PBM, to provide the prescription drug services described in this Agreement. Neither WellPoint nor PBM shall be responsible or liable for any claims that may arise from the provision of prescription drug services to

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			Covered Individuals by the Network Pharmacies. PBM shall disclose to WellPoint the extent to which the Network Pharmacies include entities owned by, or affiliated with, PBM.
	(h)		Hold Harmless. Prior to providing to a Covered Individual any of the benefits or services to which such Covered Individual is or may be entitled under a Plan, Network Pharmacies shall be required to collect from the Covered Individual the amount of any applicable Cost Share. Additionally, Network Pharmacies shall not recover any unpaid balances (over the Cost Share) due Network Pharmacies from such Covered Individuals, but are instead required to recover any unpaid balances from WellPoint or the PBM only.
	(i)		PBM will perform computerized system audits of all retail Network Pharmacy Claims under the Plan. In addition, during the Term of this Agreement, PBM will perform focused desk audits, telephone audits, and on-site field audits of retail Network Pharmacies selected by PBM consistent with PBM’s standard Network Pharmacy audit compliance procedures to examine the selected retail Network Pharmacy’s compliance with its agreement with PBM. PBM will, from time to time, but at least semiannually, report to WellPoint the results of its auditing efforts. PBM agrees to credit or refund to WellPoint [*] of any applicable funds recovered due to Pharmacy audits.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

(j)

Notwithstanding the foregoing, PBM acknowledges and agrees that WellPoint may contract directly with Network Pharmacies for immunization services which are covered under the Plan’s medical benefit, rather than the pharmacy benefit.

	3.4		Furnish Data to WellPoint. PBM shall provide such data to WellPoint or its designees as WellPoint may reasonably request, including without limitation prescription data feeds to [*], [*], and [*]. Such data shall be provided via electronic media transfer in a form mutually agreeable to the Parties, and on a periodic basis as agreed between the Parties.
	3.5		Eligibility & Information Systems.

	(a)		PBM agrees to accept WellPoint’s current eligibility format, [*]. Further, PBM will process multiple eligibility files per day as supplied to PBM by WellPoint. PBM will confirm eligibility files and changes received electronically from WellPoint within [*], and shall apply and activate the same in the PBM system within [*] of receipt [*]. Manually submitted eligibility changes will be applied to the system within [*] of receipt. PBM will perform a full file comparison of the WellPoint eligibility data on a monthly basis.
	(b)		WellPoint shall be responsible for determining the eligibility of any Covered Individual for Covered Prescriptions. Upon the request of a Network Pharmacy, PBM shall verify the eligibility of Covered Individuals, based upon the information provided to PBM by WellPoint.
	(c)		PBM will reasonably accommodate transmission of historical and current WellPoint member and group eligibility. PBM will confirm that all Plan, Covered Individual eligibility, and Claims data are loaded correctly by PBM. PBM will accept (from multiple source systems) and apply daily Covered Individual eligibility data, and all updates to include additions and deletions, at no additional cost to WellPoint. PBM will provide back-end error reporting on eligibility submissions within [*] of submission by WellPoint, electronically.
	(d)		[*] In addition, PBM will be responsible for providing unlimited training, as determined by WellPoint, on its online system to WellPoint personnel, at no cost to WellPoint.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	(e)		PBM will provide on-line management reports with [*] in the standardized file layout acceptable to WellPoint.
	(f)		PBM shall provide a call center for Network Pharmacies and Covered Individuals. PBM or its subcontractors shall not provide the call center or customer services provided to Covered Individuals and Network Pharmacies through an offshore entity without WellPoint’s prior written approval, which shall not be unreasonably withheld. PBM shall acquire one or more designated toll free numbers for the call center. In the event of a termination of the Agreement, the toll free numbers shall remain the sole property of WellPoint.
	(g)		PBM will apply its usual and customary policies and practices to concurrent DUR edits upon approval from WellPoint, which DUR edits shall be customized and supplemented in accordance with Section 3.9(c) hereof, provide customizable messaging to enhance clinical outcomes and ensure member safety at WellPoint’s reasonable request, customize its practices at the reasonable request of WellPoint, and assist WellPoint in WellPoint’s performance of similar activities. PBM will use its usual and customary policies and practices in testing all eligibility, Claims, benefit plans, clinical programs and system platforms and will customize its practices at the reasonable request of WellPoint. PBM will support a monitored sign-off process during the conversion process as well as for system change initiatives that may take place during the term of the contract. PBM will provide the ability to transmit data from and to its site via a secured direct transmission line or any other federally approved means of data transmission, at no additional cost to WellPoint. PBM will identify eligibility and billing testing strategies for the conversion and for ongoing system changes.
	(h)		PBM is liable for reconciling any and all incorrect payments due to Plans not being set up correctly and/or errors in eligibility administration made by PBM for the Term of this Agreement.
	(i)		Subject to the remaining terms of this Agreement, PBM shall administer any and all of the current Plan designs, including the administration of accumulators, in use by WellPoint as provided herein.
	(j)		PBM shall provide support for WellPoint’s e-prescribing programs and initiatives [*].

3.6

Invoice WellPoint. PBM shall invoice WellPoint for Paid Claims according to the Claims payment method described in Exhibit C. PBM shall invoice WellPoint for the administrative and other fees set forth in Section 5 and Exhibit A according to the administrative service fee payment method described in Exhibit C.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

3.7

Claims Processing Services.

	(a)		PBM shall process Claims in real time consistent with applicable law, including ERISA and any other applicable state or federal law.
	(b)		PBM shall provide to WellPoint daily accumulator files for each of WellPoint’s systems and in accordance with WellPoint’s specifications for each system.
	(c)		With respect to Plans subject to ERISA, PBM will comply with the applicable Plan terms, ERISA and the regulations thereunder regarding Claims appeals. PBM will forward all appeals and related information received to WellPoint within [*] of receipt. PBM shall arrange prompt payment of benefits if the initial denial is not affirmed by WellPoint. PBM shall have no responsibility for Plan, provider or Covered Individual grievances and appeals.
	(d)		PBM shall enter into its electronic on-line Claims adjudication system certain Plan design information necessary for PBM to perform automated Claims processing services in accordance with this Agreement, including information regarding Cost Share, Covered Individual out-of-pocket maximums, benefit maximums and any other features of the Plan design to be used in processing Claims. PBM will instruct Network Pharmacies to transmit certain information to PBM when a Covered Individual presents a Plan identification card. PBM will transmit to Network Pharmacies the Claim status; the Cost Share amount (if applicable); and any applicable drug utilization review messaging or other messages that are part of the Claims adjudication process.
	(e)		PBM shall process Claims under this Agreement in accordance with the terms hereof.
	(f)		PBM will perform electronic, telephone, and on-site audits of Network Pharmacies to determine compliance with their pharmacy agreements. PBM will attempt recovery of identified overpayments to Network Pharmacies through offset, demand or other reasonable means; provided that PBM will not be required to institute litigation. Recovered overpayments shall be credited to WellPoint.
	(g)		If PBM determines that, through its error (e.g., PBM processed eligibility incorrectly or incorrectly set up benefit design), it has paid any Covered Individual on a manually submitted Claim less than the Covered Individual is entitled to under the Coverage Document, PBM shall adjust the underpayment consistent with its standard policies. If PBM determines that, through its error, it has overpaid any Network Pharmacy or paid benefits not covered under the terms of a Coverage Document, PBM shall, at its own expense, recover the overpayment or incorrect payment and credit WellPoint accordingly. In addition, PBM also performs electronic, telephone, and on-

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			site audits of Network Pharmacies. PBM will attempt recovery of identified overpayments through offset, demand or other reasonable means; provided that PBM will not be required to institute litigation. [*] of recovered overpayments shall be credited to WellPoint.
	(h)		For WellPoint claims processed and paid prior to the Effective Date and for Runout Claims (as defined in Exhibit I, Section 4.1.10) processed by PBM and paid after the Effective Date, PBM shall provide the following audit support: (1) regulatory and accreditation audit support for Part D and commercial business; and (2) customer audit support for commercial business only. WellPoint shall provide all information necessary for such audits (or access to such information) to the extent PBM does not have such information, and WellPoint shall reimburse [*] in providing such audit support services. WellPoint shall be solely liable for all audit recoveries or regulatory actions resulting therefrom.

3.8

Appeals and Grievances/Complaints.

	(a)		PBM shall provide support and recommendations to WellPoint in connection with the grievance and appeal responsibility retained by WellPoint pursuant to Section 2.11 of this Agreement and shall provide to WellPoint all information reasonably necessary for WellPoint to respond to such grievances and appeals, to the extent PBM has such information.
	(b)		PBM shall be responsible for assisting WellPoint with Covered Individual complaints and providing periodic reporting to WellPoint regarding such complaints in a manner reasonably specified by WellPoint in its discretion.

3.9

Clinical Services, Utilization Management, Quality Safety Programs.

	(a)		WellPoint Pharmacy and Therapeutics Programs, Clinical Programs, and Services. PBM shall administer and support the WellPoint-owned Pharmacy policy, pharmacy and therapeutics programs, clinical programs, and other services as directed by WellPoint pursuant to Section 2.14.
	(b)		Clinical Services. At the direction and advance written approval of WellPoint, subject to PBM fees as agreed to by the Parties, if any, PBM will provide to WellPoint its pharmaceutical care consultation programs, Covered Individual compliance programs and other programs designed to ensure proper drug utilization, encourage the use of cost-effective medications, and encourage the use of mail service, if applicable. These programs may include mailings to Covered Individuals with active prescriptions for targeted drug products or drug classes or to let Covered Individuals know that they may qualify for participation in a clinical trial program. Such mailings may include Covered Individual and drug specific information and/or general educational material. PBM agrees to reasonably modify the clinical services it

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			provides in order to coordinate them with other clinical services provided by WellPoint.
	(c)		PBM Concurrent and Retrospective DUR Services. At the direction and prior written approval of WellPoint, PBM will provide its automated concurrent DUR programs for Claims that are adjudicated at the point of sale in the Pharmacy and its retrospective DUR services. PBM will from time to time consult with WellPoint concerning its concurrent DUR programs and may implement customized changes to such programs if such changes are mutually agreed to by the parties. In addition, PBM agrees to customize and supplement its retrospective DUR services as requested by WellPoint. In certain instances, a Claim that is denied or otherwise rejected by the system may actually represent appropriate drug therapy as determined by the applicable physician or pharmacist in his/her professional judgment. In these instances, the pharmacist will exercise his/her professional judgment to either (i) dispense the prescribed drugs at the Covered Individual’s expense or (ii) call PBM and PBM is authorized to override the denial edit. Clinical and quality of care issues detected by some DUR edits do not affect Claim payment but result in transmission of a warning or alert message transmitted at the time of dispensing to the pharmacist as part of the Paid Claim response from PBM. Network Pharmacies are directed to review the messages as they are received and to use their professional judgment as to whether action is required.
	(d)		DUR Limitations. The information generated in connection with DUR services is intended as a supplement to, and not as a substitute for, the knowledge, expertise, skill, and judgment of physicians, pharmacists, or other health care providers in providing patient care. Providers are individually responsible for acting or not acting upon information generated and transmitted through the DUR services, and for performing services in each jurisdiction consistent with the scope of their licenses. Except as set forth in paragraph (b) above, in performing DUR services, PBM will not, and is not required by this Agreement to, deny Claims or require physician, pharmacist, or patient compliance with any norm or suggested drug regimen, or in any way substitute PBM’s judgment for the professional judgment or responsibility of the physician or pharmacist.
	(e)		PBM represents and warrants that it will update DUR databases on an ongoing and timely basis to reflect changes in available standards for pharmaceutical prescribing.
	(f)		Switching Programs. WellPoint shall consult with PBM concerning PBM’s implementation and administration of WellPoint-developed switching programs.PBM shall review all such WellPoint-developed programs to ensure compliance with PBM’s policies and applicable law. As mutually agreed to following PBM’s review, PBM shall implement and administer WellPoint-

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

developed switching programs. Prior to the implementation of any PBM switching programs, PBM shall obtain WellPoint’s written consent. In offering such drug switching programs, PBM shall comply with WellPoint’s Formulary alternative rules.

3.10

Support Formulary, Benefits Design, and P&T and VA Committee.

	(a)		PBM shall provide consulting, technical and analytical support as requested by WellPoint to support WellPoint’s Formulary administration, benefit design and P&T and VA Committee functions for both Specialty Drugs and products payable under the medical or pharmacy benefits specified in this Agreement.
	(b)		Subject to Sections 2.4 and 2.5 above, PBM agrees to administer the Formulary and benefit design decisions of WellPoint.

3.11

Prior Authorization/ Utilization Review/Specialty Care Management. PBM shall conduct the Delegated Functions (as defined in Section 2.13) in accordance with this Agreement. Such activities will be implemented in accordance with WellPoint’s prior authorization, drug utilization review or specialty care management guidelines and as detailed in Exhibit G or Specialty Guidelines, as appropriate. PBM shall not make any substantive changes to WellPoint’s prior authorization, drug utilization review or specialty care management guidelines without WellPoint’s prior review and approval. PBM agrees to perform the Delegated Functions during the hours of operations set forth in Exhibit G and the reviews will be completed within the turnaround timeframes set forth in Exhibit G. PBM acknowledges and agrees that WellPoint may revoke this delegation of any Delegated Functions at any time and to any extent during the term of this Agreement.

	(a)		Licensing and Compliance. At all times during the term of this Agreement, PBM, PBM Agents and PBM’s employees shall be and remain licensed and certified in accordance with all applicable state and federal laws and regulations (including those applicable to utilization review), and shall comply with and abide by all state, federal and local laws and regulations relating to the provision of pharmacy benefit services to Covered Individuals. PBM shall supply evidence of such licensure, compliance and certifications to WellPoint upon request. At all times during the term of this Agreement, PBM, when applicable, shall: (i) maintain itself in good professional standing; and (ii) maintain all required professional credentials and meet all continuing education requirements necessary to retain its agents or employees professional designation.
	(b)		Permits. PBM has obtained, and will maintain in good standing, all licenses, permits and other necessary or appropriate governmental approvals (collectively, the “Permits”) to perform its duties hereunder. PBM has complied with all conditions and requirements imposed by the Permits, and PBM has not received any notice of, and has no reason to believe, that any

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			governmental authority intends to cancel or terminate any of the Permits or that valid grounds for such cancellation or termination exist. Each Permit is valid and in full force and effect, and will not be terminated or adversely affected by the transactions contemplated hereby. PBM agrees to obtain Utilization Management (“UM”) licensure in all states where WellPoint’s Utilization Review (“UR”) agent (Anthem Utilization Management Services, Inc.-AUMSI.) has obtained UR licensure.
	(c)		Compliance. PBM’s Delegated Function processes will comply with all applicable federal, state, and local laws, rules and regulations, and NCQA/URAC accreditation standards; including without limitation the applicable utilization review requirements in the states where the Covered Individual’s Coverage Document is issued or delivered. PBM agrees to comply with any state law that exerts extraterritorial jurisdiction of their UM regulations for members residing in their state, regardless of where the Coverage Document is issued or delivered.
	(d)		Licensure and Clinical Staff Requirements. PBM warrants and represents, to the best of its knowledge that each nurse or pharmacist providing Delegated Functions is and will continue to be, as long as the delegation of services remains in effect, the holder of a currently valid, unrestricted license to practice nursing or pharmacy under applicable state law, to the extent the function warrants such license.
	(e)		PBM’s Medical Management System. PBM agrees to supply WellPoint reasonable access to its proprietary application for processing prior authorization requests, to the extent necessary to facilitate the services contemplated by this Agreement.

3.12

Group/Member/Intermediary Communication.

	(a)		Except as necessary to perform services pursuant to this Agreement, PBM will not communicate with Plans, Covered Individuals, or Plan intermediaries (including, without limitation, consultants, brokers, or third party administrators) regarding the drug benefit and their services under the Plan without WellPoint’s prior written approval, which approval will not be unreasonably withheld. Any such communications will be in the normal course of PBM’s services under this Agreement and will not involve solicitation or marketing communications. All such communications shall be compliant with Brand Regulations as applicable, and subject to review and approval by WellPoint.
	(b)		PBM will provide all the Plan and Covered Individual communication materials, in English and shall meet any state’s applicable foreign language requirements (including detailed Formulary migration materials), to WellPoint to review prior to distribution to ensure a successful

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			transition/communications campaign. PBM will provide multiple toll-free telephone lines necessary to meet WellPoint’s business requirements, IVR, Internet support and implementation management, including website support, to assist WellPoint, Plans and Covered Individuals with eligibility and benefits verification, location of Network Pharmacies and other related concerns. Upon request from WellPoint, PBM will mail all transition and on-going maintenance communication materials, including but not limited to ID cards and welcome packets, to Plans and/or Covered Individuals on an agreed-upon schedule either electronically or manually.
	(c)		PBM will log all customer service complaints, issues and resolutions and provide them to WellPoint on a weekly basis, per a mutually agreed upon format. PBM will initiate and/or provide member issue resolution within [*] of receipt of an issue. PBM will support specific Plan and Covered Individual inquiries to its Customer Service and web site. PBM will provide multiple dedicated toll-free numbers as needed for WellPoint’s business requirements for inquiries and a Post Office Box for Plans and Covered Individuals to send paper Claims at no cost to WellPoint. PBM will setup a transfer connect system.

3.13

Rebate Contracting and Administration.

	(a)		In general, PBM will utilize its standard proprietary Rebate processes and contracts with respect to this Agreement in order to maximize efficiencies and value. PBM shall pay WellPoint Pharma Revenue amounts as provided in Section 5.3 and Exhibit A, and will provide the Pharma Revenue reports listed in Exhibit B. In administering PBM’s Rebate program under this Agreement, PBM shall use its best efforts to process, invoice, and collect promptly all Rebates from pharmaceutical manufacturers pursuant to PBM’s agreements with manufacturers.
	(b)		PBM’s Affiliate, NextRx, maintains written agreements with pharmaceutical manufacturers relating to the payment of Pharma Revenue for WellPoint utilization. PBM shall maintain any such NextRx Pharma Revenue agreements or shall renegotiate its own Pharma Revenue agreements with the same pharmaceutical manufacturers, or shall maintain PBM’s own Pharma Revenue agreements with the same pharmaceutical manufacturers in a manner such that (i) WellPoint will not be required to repay any Rebate amounts previously paid to WellPoint or to pay any penalty with respect to such Rebate amounts, and (ii) WellPoint will be paid Rebate amounts due to WellPoint for prescription drugs purchased prior to the Effective Date of this Agreement but not yet paid. The foregoing is contingent upon: (i) WellPoint’s continued compliance with the terms and conditions of NextRx’s obligations, to the extent applicable to WellPoint, under any such Pharma Revenue agreements; and (ii) WellPoint not making any Formulary decisions that result in non-compliance or breach of any such Pharma Revenue agreements.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

(c)

If any NextRx Pharma Revenue agreement that PBM maintains pursuant to Section 3.13(b) above or otherwise, prior to the orderly transfer by PBM of the rebating function to its own Rebate contracts and processes, prohibits PBM from sharing or otherwise paying an amount equal to all or any portion of Manufacturer Administrative Fees related to utilization invoiced under such NextRx Pharma Revenue agreements, WellPoint acknowledges and agrees that, notwithstanding anything in this Agreement to the contrary, PBM shall not be required to include (and shall not be in breach of this Agreement for not including) any such amounts in the [*] or [*] Pharma Revenue amounts to be paid to WellPoint pursuant to Sections 5.3(c) and (d) hereunder. Nothing in this Section 3.13 shall affect the Commercial or Part D Pharma Revenue Per Branded Claim Guarantees set forth in Exhibit A.

3.14

Reports to WellPoint and WellPoint Plans.

	(a)		Prior to Completed Migration (as defined in Section 2.16(a)), PBM will provide to WellPoint, with respect to services provided by PBM for groups and individuals that have not yet fully migrated to PBM’s systems, the reports that are listed on Exhibit B except to the extent that any such report would contain confidential and proprietary PBM information, including, but not limited to, PBM’s contracted Network Pharmacy rates or PBM’s licensed mail order Pharmacy or Specialty Pharmacy acquisition rates. Thereafter, with respect to services provided by PBM for groups and individuals that have achieved Completed Migration, PBM will provide its standard reporting and will provide WellPoint access to its standard on-line reporting tools. In no event will the reporting and access to on-line reporting tools provided by PBM to WellPoint hereunder be any less than the reporting and access provided to any other PBM client. For reporting after Completed Migration, PBM shall also comply with the opening paragraph of Exhibit B.
	(b)		PBM will provide to WellPoint any other reports not specifically contemplated in this Agreement (custom or ad hoc reports) or shall customize PBM’s standard reports as WellPoint shall from time to time reasonably request at [*]. This Section 3.14(b) shall not apply to necessary changes, as mutually agreed to by the parties acting in good faith, to accommodate CMS reporting requirements imposed on WellPoint or its Plans.

3.15

Finance and Analytical Support and General Consulting. As requested by WellPoint, PBM shall provide general consulting assistance to WellPoint with respect to cost projections, benefit design issues, Formulary, underwriting, legal, and regulatory compliance, and other similar Plan matters at no cost to WellPoint. Such services shall be available to support WellPoint’s responsibilities with respect to benefits design, Formulary design, sales and marketing, account management and development and implementation of Pharmacy and Therapeutics programs and Clinical Services.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	3.16		Compliance with Brand Regulations. PBM shall comply with all Brand Regulations of the Association in connection with its provision of services under this Agreement
	3.17		Programming Services.

	(a)		To the extent that WellPoint retains additional third party administrators or other service providers that require additional programming by PBM such arrangements shall be programmed free of charge.
	(b)		PBM, at its own cost, will provide for WellPoint’s approval, a systems specification document and requirements document outlining all programming needs and changes to accurately administer a Plan’s benefit program design.
	(c)		PBM shall provide tracking reports for all clinical programs implemented to demonstrate outcomes impact.

	3.18		Fee Disclosures. PBM will, as reasonably requested, provide to WellPoint or any Plan information that may be necessary for WellPoint or such Plan to satisfy its requirements under ERISA, or any other federal or state law or regulation, including information necessary to complete annual reports required to be filed with the Department of Labor, to the extent PBM possesses such information.
	3.19		Notice to WellPoint of Regulatory Inquiries and Claims Against PBM. PBM shall notify WellPoint in writing of: (i) all material claims, investigations and inquiries that may materially impact PBM’s ability to perform its obligations under this Agreement, whether in writing or orally (“Inquiries”) by any Government Entity, pharmaceutical manufacturer, attorney, or other individual, including, without limitation, providing related press releases to WellPoint before general distribution whenever not prohibited by federal, state, and local rules, laws, or regulations; provided, however, that the term Inquiries does not include consumer reports, complaints, or grievances processed by PBM in the ordinary course and that are not material to PBM’s performance of its obligations under this Agreement; and (ii) any material Inquiry from any Government Entity or material litigation that relates to PBM’s general business practices or operations, in each case as soon as reasonably practicable. PBM shall, from time to time, furnish WellPoint with regular and timely updates regarding the status of each Inquiry. If PBM’s response to any Inquiry specifically involves WellPoint in any manner, then PBM shall provide WellPoint with at least [*] to comment before PBM provides a response, and PBM shall consider in good faith all of WellPoint’s comments before providing a response.
	3.20		Support WellPoint FEHBP Contract Administration. PBM agrees to participate in WellPoint’s FEHBP program and to provide WellPoint any information necessary to support WellPoint’s continued participation and future applications to participate as

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			a sponsor of drug benefits under the FEHBP. PBM’s specific responsibilities and duties under this Section 3.20 are set forth in Exhibit H. All services performed by PBM for WellPoint as part of the administration of its FEHBP product service line shall be in accordance with those requirements adopted by the Office of Personnel Management (“OPM”) as part of its administration of the FEHBP and any other applicable laws and regulations. Requirements under FEHBP laws and regulations shall supersede any contrary or inconsistent agreement between the Parties set forth in this Agreement. Any changes made by OPM to FEHBP law and regulations shall be automatically incorporated herein. To the extent such changes have a material negative financial impact to PBM hereunder, the Parties will agree to an appropriate adjustment to the fees paid by WellPoint to PBM. All services shall be furnished by PBM in compliance with any contract between WellPoint, on behalf of its FEHBP product service line, and OPM for participation in the FEHBP program. PBM acknowledges and agrees that in accordance with the terms of such contract, WellPoint shall have the ultimate responsibility for ensuring the services performed are in compliance with the administration of its FEHBP product service line.
	3.21		Support WellPoint Government Services/Medicare Part D and Medicaid Administration. PBM agrees to participate in WellPoint’s Senior and State Sponsored Business Programs and to provide WellPoint any information and services provided for under this Agreement necessary to support WellPoint’s continued participation and future applications to participate as a sponsor of drug benefits for Medicare and Medicaid. Such support shall include all contractual obligations for WellPoint’s Senior Sponsored Business Programs, as described and set forth in Exhibit I, all contractual obligations for WellPoint’s State Sponsored Business, as described and set forth in Exhibits J-1 through J-7, and all contractual obligations for WellPoint’s provision of services under the Kentucky Access program, as described and set forth in Exhibit P. PBM shall comply with all applicable state Medicaid laws, as applicable, and shall abide by Exhibits J-1 through J-7, which contain the specific contractual provisions applicable to Medicaid programs administered by WellPoint that are required to be included in any subcontract entered into by WellPoint in connection with such Medicaid programs, to the extent the terms therein are applicable to the pharmacy benefit management services provided by PBM hereunder. All services performed by PBM for WellPoint under this Section 3.21 shall be in accordance with those requirements adopted by the Centers for Medicare & Medicaid Services (“CMS”) and any other applicable federal or state laws and regulations. Requirements under Medicare and Medicaid laws and regulations shall supersede any contrary or inconsistent agreement between the Parties set forth in this Agreement. Any changes made by CMS to Medicare law and regulations and any changes made to Medicaid law and regulations shall be automatically incorporated herein. To the extent such changes have a material negative financial impact to PBM hereunder, the Parties will agree to an appropriate adjustment to the fees paid by WellPoint to PBM.
	3.22		Dedicated Management Support Team/Account Management and Implementation Support.

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(a)

During the term of this Agreement, PBM shall, at its own cost: (i) maintain the Dedicated Management Support Team to perform its obligations under this Agreement; (ii) operate the Dedicated Management Support Team to support all of WellPoint’s business segments and geographic structure; (iii) maintain the Dedicated Management Support Team fully operational during the Term of this Agreement; The Dedicated Management Support Team shall have the necessary knowledge and experience to support all WellPoint business lines and shall include, but not be limited to:

i)

[*]

	(b)		WellPoint has the right to review, meet with and reasonably approve the lead individual in each of the following roles: [*]. PBM agrees not to change the lead individual assigned to the roles of [*] without the reasonable prior consent from WellPoint, unless a promotional opportunity or employment termination is the reason for the change.
	(c)		PBM will provide no less than [*] in-person account team reviews to WellPoint on the utilization and performance of the WellPoint prescription drug program. The reviews will also include cost saving recommendations (with return on investments) and suggestions to implement such recommendations.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	(d)		PBM shall hire, maintain and supervise the personnel necessary to perform PBM’s duties under this Agreement. PBM also may retain accountants, attorneys or other service providers it deems necessary to fulfill its duties under this Agreement, the costs of which shall not be billed to WellPoint, unless WellPoint has specifically consented in writing to pay the same.
	(e)		In the event any key account management team personnel assigned by PBM to perform services for WellPoint pursuant to this Agreement are terminated or re-assigned, PBM shall notify WellPoint as early as feasible in advance of such termination or re-assignment.
	(f)		PBM will provide at least annually an executive review/strategy session with executive level participation from PBM on the performance of and future direction of WellPoint’s prescription drug program.
	(g)		PBM will provide training to the appropriate personnel at WellPoint on the processes, procedures, and capabilities pre and post implementation, at no cost to WellPoint.
	(h)		PBM will provide training to the appropriate personnel at WellPoint on the processes, procedures, and capabilities of the PBM for the duration of the Agreement, at no cost to WellPoint.
	(i)		The Parties will agree upon responsibilities relative to the Implementation and PBM shall consult with WellPoint concerning the account management process upon execution of the Agreement.
	(j)		PBM will provide the necessary data and support to WellPoint for the identified third party to perform a pre-audit of, including but not limited to, system set-ups, Plan designs, eligibility, and adjudication rules [*] prior to the Effective Date.
	(k)		PBM shall provide appropriate assistance and support for consultation on clinical programs, formulary analysis, and clinical plan of record (POR) development.
	(l)		PBM shall provide appropriate assistance and support for sales support including, but not limited to, RFP development, market intelligence, preparation of finalist presentations, sales training, etc.
	(m)		PBM shall provide appropriate assistance and support for operational, client/member services issue resolution.
	(n)		PBM shall provide appropriate assistance and support for new clients or contract renewal change implementation.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	(o)		PBM shall provide appropriate assistance and support for client retention and introduction of new products to Plans.
	(p)		PBM shall provide all other duties as reasonably necessary to support the WellPoint relationship.

	3.23		Information Technology and Standards. PBM represents and warrants that its information systems shall comply with the requirements and standards set forth in Exhibit K.
	3.24		Fraud Detection Activities. PBM shall be responsible for specific activities designed to prevent, detect, investigate, and remediate potential or existing member and provider fraud in connection with the services to be provided by PBM under this Agreement. PBM shall implement those activities that it determines are best suited to attain this goal, but at a minimum PBM’s fraud and abuse detection activities shall include the following components:

	(a)		Claims Monitoring. PBM shall perform a quarterly review of Claims to identify potential fraudulent patterns in Paid Claims data, which shall include for Medicare Part D services, using retrospective drug utilization tools, including retrospective review programs for drugs that may be abused and for patients taking multiple medications (polypharmacy). Such retrospective drug utilization tools may also be implemented by PBM with respect to non-Medicare Part D services as requested by WellPoint, and for the Claim sample size requested by WellPoint, subject to [*] per Claim fee.
	(b)		Cooperate and Support Investigations. PBM shall cooperate and support any investigations that are identified through any channel.
	(c)		Train Employees to Detect Fraudulent Claims. PBM shall train all Claims processors to detect suspicious Claims.
	(d)		WellPoint Member Hot Line. PBM shall cooperate with WellPoint’s maintenance of and shall assist in the investigation of allegations of Plan, Covered Individual, or provider fraud received through WellPoint’s Member Hotline. Further, PBM shall refer appropriate cases to WellPoint’s Fraud Investigation Unit.
	(e)		Educate Members About Fraud. PBM shall cooperate with WellPoint’s provision of educational materials to Plans and Covered Individuals concerning what constitutes fraud (e.g., providing false employer group and/or group membership information; sharing ID card with a non-member; using ID card after benefits terminated).

3.25

[*]

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4. DUTIES OF WELLPOINT AND PBM

	4.1		Joint Pharmacy Operating Committee. The Parties shall jointly establish a Joint Pharmacy Operating Committee (“Committee”) to oversee the operation of this Agreement, enhance communications between the Parties, and attempt to resolve disputes between the Parties. Each Party shall appoint three or four members to the Committee. The Committee shall meet as frequently as required by WellPoint, but no less frequently than quarterly. Meetings of the Committee will be convened by WellPoint and the agenda for such meetings will be set by WellPoint after consulting with PBM. Any disputes that cannot be resolved by the Committee will be referred by the Committee to senior management for further review and consideration.
	4.2		Service Level Agreement. PBM shall provide the Information Technology Support Services, with respect to any PBM system that WellPoint utilizes to service Covered Individuals, as set forth in the Service Level Agreement attached hereto as Exhibit L (the “Service Level Agreement”). The performance guarantees that apply to system availability along with the penalties for such services are set forth in Exhibit D under System Availability.

5. PRICING, COMPENSATION AND PAYMENTS TO PBM

	5.1		Payment of Administrative and Other Fees. WellPoint shall pay PBM the administrative and other fees pursuant to the terms set forth in Exhibit A in the time and manner specified in Exhibit C. In the event of any overpayment by WellPoint to PBM or nonpayment of any amounts to be paid by PBM to WellPoint hereunder (including, without limitation, Pharma Revenue), PBM acknowledges and agrees that WellPoint reserves the right of offset with regard to any payments due to PBM under this Agreement. In the event of any overpayment to WellPoint by PBM of Pharma Revenue amounts or nonpayment by WellPoint of any fees or other amounts due to PBM hereunder, WellPoint acknowledges and agrees that PBM reserves the right to offset any such PBM overpayment or WellPoint nonpayment with Pharma Revenue amounts otherwise due to WellPoint under this Agreement.
	5.2		Disclosure of Certain Financial Matters.

(a)

In addition to the fees paid to PBM by WellPoint, PBM and PBM’s wholly-owned subsidiaries derive margin from fees and revenue in one or more of the ways as further described in the Financial Disclosure to PBM Clients set forth in Exhibit N hereto (“Financial Disclosure”). In negotiating any of the fees and revenues described in the Financial Disclosure or in this Agreement, PBM and PBM’s wholly-owned subsidiaries act on their own behalf, and not for the benefit of or as agents for WellPoint, any Plan, or Covered Individuals. PBM and PBM’s wholly-owned subsidiaries retain all proprietary rights and beneficial interest in such fees and revenues described in the Financial Disclosure and, accordingly, WellPoint acknowledges that neither it, nor any Plan, nor any Covered Individual, has a right to receive, or possesses any

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			beneficial interest in, any such fees or revenues, except as otherwise provided herein. Nothing in the Financial Disclosure is intended to supersede any of the specific financial terms and conditions agreed to under this Agreement.
	(b)		[*]

5.3

Pharmacy Revenue Guarantees and Payments.

	(a)		In General. Pharma Revenue related to Brand Drug Claims shall be guaranteed and paid to WellPoint in accordance with the terms of this Agreement. PBM shall notify pharmaceutical manufacturers with whom PBM has Pharma Revenue contracts of PBM’s contractual relationship with WellPoint and the Effective Date of this Agreement.
	(b)		Covered Individual submitted and subrogation Claims, OTC products, Claims older than one hundred and eighty (180) days, Claims through 340B pharmacies, claims for one hundred percent (100%) copayment (cash and carry) Plans not offered in connection with a health plan benefit, and other similar Claims may not be eligible for Rebates.
	(c)		Commercial. Subject to Section 3.13(c) above, PBM shall pay WellPoint [*] of the Pharma Revenue collected on Brand Drug Claim prescriptions filled, during each calendar quarter hereunder, within [*] of the end of such calendar quarter. Subject to Section 3.13(c) above, PBM shall also pay WellPoint [*] of the residual Pharma Revenue, if any, on such Brand Drug Claims related to such calendar quarter, which are collected by PBM in subsequent calendar quarters. On an annual basis, PBM shall reconcile the Commercial Pharma Revenue Per Branded Claim Guarantees set forth in Exhibit A within [*] and shall credit WellPoint for any deficit in one or both Commercial Pharma Revenue Per Branded Claim Guarantees on the next invoice immediately following the reconciliation. Notwithstanding the foregoing, PBM may use a surplus in one of the Commercial Pharma Revenue Per Branded Claim Guarantees (Retail or Mail) to reduce a deficit in the other Commercial Pharma Revenue Per Branded Claim Guarantee hereunder. Notwithstanding anything in this Section 5.3(c) or otherwise in this Agreement to the contrary, the Parties acknowledge and agree that no Pharma Revenue guarantees shall apply for [*].
	(d)		Part D. Subject to Section 3.13(c) above, PBM shall pay WellPoint [*] of the Pharma Revenue collected on Brand Drug Claim prescriptions filled, during each calendar quarter hereunder, within [*] of the end of such calendar quarter. Subject to Section 3.13(c) above, PBM shall also pay WellPoint [*] of residual Pharma Revenue, if any, on such Brand Drug Claims related to such calendar quarter, which are collected by PBM in subsequent quarters. On an annual basis, PBM shall reconcile the Part D Pharma Revenue Per Branded Claim Guarantees set forth in Exhibit A within [*] of each calendar

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			year and shall credit WellPoint for any deficit in one or both Part D Pharma Revenue Per Branded Claim Guarantees on the next invoice immediately following the reconciliation. Notwithstanding the foregoing, PBM may use a surplus in one of the Part D Pharma Revenue Per Branded Claim Guarantees (Retail or Mail) to reduce a deficit in the other Part D Pharma Revenue Per Branded Claim Guarantee hereunder. Notwithstanding anything in this Section 5.3(d) or otherwise in this Agreement to the contrary, the Parties acknowledge and agree that no Pharma Revenue guarantees shall apply for [*].
	(e)		PBM retains all right, title and interest to any and all actual Pharma Revenues received from pharmaceutical manufacturers; PBM will pay WellPoint amounts equal to the Pharma Revenue amounts due to WellPoint, as specified in this Agreement, from PBM’s general assets (neither WellPoint, nor Plans, nor Covered Individuals retain any beneficial interest in PBM’s general assets). WellPoint acknowledges and agrees that neither it, nor any Plan, nor any Covered Individual will have a right to interest on, or the time value of, any actual Pharma Revenue payments received by PBM from pharmaceutical manufacturers. No Pharma Revenue amounts will be paid until this Agreement is executed by WellPoint. PBM will have the right to delay payment of Rebate amounts (up to an amount as reasonably necessary to cover anticipated Claims reimbursements and other administrative fees due to PBM by WellPoint) to allow for final adjustments upon termination of this Agreement.
	(f)		WellPoint acknowledges that it may be eligible for Pharma Revenue under this Agreement only so long as WellPoint, or its Affiliates, or its agents do not contract directly or indirectly with anyone else for: (i) discounts, utilization limits, Rebates, Manufacturer Administrative Fees, or other financial incentives on pharmaceutical products related to Formulary programs for Claims processed by PBM pursuant to this Agreement; or (ii) prescription drug specific adherence or compliance programs, without the prior written consent of PBM. If WellPoint contracts directly or indirectly with a pharmaceutical manufacturer in violation of the foregoing (i) and (ii), then, without limiting PBM’s right to other remedies, PBM may immediately withhold any Pharma Revenue earned by, but not yet paid to, WellPoint as necessary to prevent duplicative rebates on Covered Prescriptions. To the extent WellPoint knowingly negotiates and/or contracts for discounts or Pharma Revenue on Claims for Covered Prescriptions without prior written approval of PBM, such activity will be deemed to be a material breach of this Agreement, entitling PBM to suspend payment of Pharma Revenue hereunder and to renegotiate the terms and conditions of this Agreement. Nothing herein shall be deemed to prevent WellPoint from establishing and maintaining relationships with pharmaceutical manufacturers which involve community wellness programs, clinical research services, rebates on claims covered under the medical benefit, and, within the context of a comprehensive medical

[*]

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program, member wellness programs, quality improvement programs, and adherence and compliance programs.

5.4

Pharmacy Claim Charges.

	(a)		For all prescription drug Claims, PBM shall apply [*] set forth in Exhibit A. For purposes of Exhibit A, prescription drugs that are provided to Plans described in Sections 3.20 and 3.21, other than Medicare Part D Plans, will be treated as Commercial Drugs.
	(b)		[*]
	(c)		[*]
	(d)		[*]
	(e)		In the event that there are court or government imposed or industry-wide or pricing source initiated changes in the AWP reporting source or source changes in the methodology used for calculating AWP, including, without limitation, changes in the mark-up factor used in calculating AWP (collectively, the “AWP Changes”), WellPoint shall negotiate in good faith with PBM to effect a modification to the terms of any financial relationship between the Parties that relate to AWP such that the value of AWP for the purpose of such relationship(s) shall have the same economic equivalence in the aggregate to the value used by the Parties prior to the AWP Change. For purposes of this Section 5.4(e), having the same economic equivalence in the aggregate to the value used by the Parties prior to the AWP Change means that the relevant financial terms, including, but not limited to, the Ingredient Cost Charge of a particular drug will be the same under any new methodology as it was immediately before the AWP Change.

5.5

Cost Share.

	(a)		[*]
	(b)		[*]
	(c)		[*]

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	5.6		Periodic Pricing Review. WellPoint or a third party consultant retained by WellPoint will conduct a market analysis every [*] during the Term of this Agreement to ensure that WellPoint is receiving competitive benchmark pricing. In the event WellPoint or its third party consultant determines that such pricing terms are not competitive, WellPoint shall have the ability to propose renegotiated pricing terms to PBM and WellPoint and PBM agrees to negotiate in good faith over the proposed new pricing terms. Notwithstanding the foregoing, to be effective any new pricing terms must be agreed to by PBM in writing.
	5.7		[*]

6. TERM AND TERMINATION

	6.1		Term. This Agreement shall commence on the Effective Date and shall continue for the Term, as specified in Section 1.53. Subject to the remaining provisions of this Section 6, the Agreement shall continue after the Term for [*] unless terminated upon provision of written notice at least [*] prior to the end of the then-current term.
	6.2		Termination. Notwithstanding Section 6.1, the Agreement may be terminated during the Term as follows:

(a)

Subject to Section 16.5, either Party may terminate this Agreement if the other Party fails to comply with a material term of this Agreement and such failure is not cured within [*] written notice to the other Party. For purposes of this Section 6.2(a), failure to comply with a material term of this Agreement shall include PBM’s failure to meet any two (2) or more of the following performance guarantee categories set forth in Exhibit D for [*] (a “Material PG Breach”): (i) Implementation Services (collectively, the items under the “Implementation Services” category set forth on Exhibit D), (ii) Member Satisfaction Survey (item #7 (Member Satisfaction Survey for Members Utilizing the Pharmacy Benefit) under the “Member Customer Service” category set forth on Exhibit D), (iii) Pharmacy Access (item #3 under the “Pharmacy Network” category set forth on Exhibit D), or (iv) Retail Claims Processing (collectively, the items under the “Retail Claims Processing” category set forth on Exhibit D). In determining whether PBM has failed to meet either the Implementation Services or the Retail Claims Processing performance guarantee categories referenced above for purposes of this Section 6.2(a), for each such performance guarantee category, PBM shall be deemed to have failed to meet the category for purposes of this Section 6.2(a) if PBM fails to meet [*]of the individual performance guarantees within such category [*]. WellPoint shall have a right to terminate this Agreement with [*] written notice to PBM of a Material PG Breach if PBM has failed to cure

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

			such Material PG Breach within such [*] (i.e., the cure period for a Material PG Breach shall be [*] versus the [*] cure period for any other breach of a material term of this Agreement by either party). During the [*] following PBM’s notice of a Material PG Breach, PBM shall have the right to submit a remediation plan to WellPoint for WellPoint’s consideration. Section 16.5 shall not apply in the case of a termination for a Material PG Breach.
	(b)		Either Party may terminate this Agreement if the non-terminating Party becomes insolvent, assigns all or any part of its assets for the benefit of creditors, or upon the filing of any petition in bankruptcy, voluntary or involuntary.

	6.3		Post-Termination Services. If this Agreement is terminated for any reason, then, if requested by WellPoint, Claims for services rendered prior to the effective date of the termination shall be administered and processed by PBM per the terms of this Agreement for a run-out period of twelve (12) months following the termination, unless a shorter period is agreed to by the Parties. Performance guarantees and penalties, as listed on Exhibit D and Exhibit I, shall also remain in effect throughout any run-out period.
	6.4		Transition upon Termination.

	(a)		In the event WellPoint elects to extend the performance of this Agreement for up to twelve (12) months beyond the termination or expiration of this Agreement for purposes of facilitating the transfer of services from PBM to another vendor, both WellPoint and PBM shall continue to perform all of their respective obligations in accordance with this Agreement during this period (including, but not limited to, WellPoint’s fee payment obligations) and provide Transition Assistance Services in accordance with a written transition plan. The transition plan shall include (1) a description of the information systems operations being transitioned; (2) a description of the methods and procedures, personnel and organization PBM will use to perform the Transition Assistance Services; (3) a schedule of transition activities and timelines for completion; (4) a detailed description of the respective roles of WellPoint and the PBM; and (5) such other information and planning as are necessary to ensure that the transition takes place according to an agreed upon schedule and without disruption to WellPoint or PBM’s operations. The transition plan shall be subject to approval by WellPoint prior to implementation.
	(b)		Notwithstanding PBM’s continued provision of services under this Agreement, in the event of any Assistance Event WellPoint shall have the right to enter into a new pharmacy benefit management agreement with another vendor during the Transition Assistance Period. PBM agrees to cooperate with such vendor to ensure the transition of services to such new vendor in such a manner as to avoid a disruption in the level of service to

[*]

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			Covered Individuals and WellPoint. There shall be no charge for the Transition Assistance Services to the extent that resources included in the fees being paid by WellPoint to PBM can be used to provide the Transition Assistance Services. To the extent the resources included in the fees being paid by WellPoint to PBM cannot be used to provide Transition Assistance Services, such Transition Assistance Services shall be provided at PBM’s standard rates then in effect for such services immediately prior to the occurrence of the Assistance Event. After the expiration of a Transition Assistance Period, PBM shall (a) answer questions from WellPoint regarding the services on an “as needed” basis at PBM’s then standard billing rates and (b) upon WellPoint’s request, deliver to WellPoint any remaining WellPoint-owned reports and documentation still in PBM’s possession.
	(c)		Transfer of Records. Following termination or expiration of this Agreement, at the request of WellPoint, PBM shall provide WellPoint all relevant Plan, Covered Individual, administrative, financial and medical files in the possession of PBM to WellPoint or its designee, including without limitation another pharmacy benefit management company. PBM shall cooperate with WellPoint in maintaining the confidentiality of such Covered Individual medical records at all times. PBM will provide WellPoint with all electronic files related to the provision of services hereunder (including, without limitation, files related to groups, group to plan conversions, prior authorizations, Claims history, prescriptions, and related ancillary files) at PBM’s cost.
	(d)		Contact with Covered Individuals Upon Termination. PBM and WellPoint agree that in the event this Agreement should terminate for any reason, WellPoint, in consultation with PBM, shall develop a written communication which advises WellPoint Plans and Covered Individuals not less than [*] prior to the date of termination of (i) the termination of this Agreement; and (ii) Covered Individuals’ rights and responsibilities regarding such termination.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	(e)		PBM agrees that the WellPoint communication set forth above concerning termination of this Agreement shall be the exclusive communication with Plans or Covered Individuals, and PBM shall not interfere in any way with the relationship between WellPoint and Plans and Covered Individuals. If PBM should (i) communicate with Plans or Covered Individuals concerning termination of this Agreement and/or attempt directly, indirectly or by implication to advise or encourage such Plans or Covered Individuals to switch to either another health care service plan (including HMOs), or to dis-enroll from WellPoint for any reason, or (ii) submit the WellPoint-provided Plans or Covered Individuals list or its equivalent to another health care service plan (including HMOs) for any purposes, or (iii) use the WellPoint-provided Plans or Covered Individuals information to invite Covered Individuals to attend sales presentations by any other health care service plan (including HMOs) on or off PBM premises, such activity shall constitute a breach of this contractual provision and WellPoint may promptly seek a temporary restraining order and/or injunction to preclude such activity as well as all appropriate damages resulting from PBM’s breach of this provision.
	(f)		Notwithstanding the above, PBM shall be permitted to communicate, subject to applicable Brand Regulations, with Covered Individuals pertaining to issues involving their specific patient care and specific reimbursement/collection issues.
	(h)		Upon termination pursuant to Section 6.2, PBM shall not recover any unpaid balances owed to PBM by WellPoint from Covered Individuals or Plans.

7. AUDIT

	7.1		WellPoint reserves the right to audit twice annually on-site for purposes of ensuring and verifying PBM’s compliance with the terms of this Agreement (including services and operations of PBM Agents).
	7.2		Audits will be done by a third party auditor as mutually agreed to by the Parties (hereinafter “Auditor”). [*] PBM will provide a detailed Claims data file containing all Claims and other pertinent information incurred during each contract year, at no cost to WellPoint. The audit sample shall be sufficient to provide a statistically appropriate sample size of total Claim volume as determined by WellPoint in consultation with its Auditor. WellPoint shall provide PBM with at least thirty (30) days advance written notice of an audit and WellPoint shall submit to PBM a scope of audit document in connection with the audit. Once WellPoint’s Auditor contacts PBM, PBM shall respond to any request for an audit within thirty (30) days. The Parties, including the Auditor, will enter into customary confidentiality agreements to ensure that PBM and WellPoint data is kept confidential. After the earlier of the thirty (30) day response period or the PBM response the audit will commence within five (5) business days. Upon completion of the audit, WellPoint will share the results with the PBM.

[*]

Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	7.3		PBM shall provide full support as required to the Auditor in all audits conducted, including all contractual obligations as described and set forth above.
	7.4		PBM shall have the right to appeal the findings of an audit that was performed under this Section 7. The appeal, including all supporting documentation, must be submitted in writing within sixty (60) days from the date the audit report was received by PBM and must address issues identified in the audit report cover letter. Any and all supporting documentation pertaining to the appeal must be included to allow for a detailed review by the Auditor. If WellPoint or the Auditor does not receive an appeal, including supporting documentation, from the PBM within sixty (60) days of the receipt of the audit report, one appeal extension will automatically be granted by WellPoint for an additional fifteen (15) days. WellPoint will respond to the appeal within sixty (60) days from the date of receipt of the request (the “WellPoint Response”). Thereafter, PBM shall have sixty (60) days to respond to the WellPoint Response (the “PBM Response”). WellPoint shall issue a final response to the PBM Response within thirty (30) days of receipt of the PBM Response. WellPoint shall only be required to consider issues raised in response to the WellPoint Response, and shall not be required to consider additional issues raised by PBM which are outside the scope of the WellPoint Response. All issues not resolved by the process set forth above shall be submitted to the Joint Operating Pharmacy Committee for resolution.

8. PERFORMANCE GUARANTEES AND IMPLEMENTATION GUARANTEE

	8.1		PBM agrees that the performance standards and guarantees are a contractual obligation of PBM and PBM shall meet or exceed the performance standards and guarantees as set forth in Exhibit D and, if it fails to do so, shall pay to WellPoint the penalty amount set forth in Exhibit D within [*] of the end of the evaluation period for which the performance guarantee is measured. Further, PBM shall adhere to the implementation guarantee set forth in Exhibit D. PBM performance standards set forth in Exhibit D are guaranteed for the Term of this Agreement. The percentage of the aggregate penalties to the various guarantees shall be allocated and assigned as provided in Exhibit D.
	8.2		To the extent any action by PBM were to result in the payment of a performance guarantee, the payment of such performance guarantee shall be in addition to any other remedies available to WellPoint and shall in no way limit WellPoint’s ability to seek damages, remedies, or payments to make WellPoint whole for losses for failure by PBM to fulfill its obligations under this Agreement.

9. RELATIONSHIP OF THE PARTIES

PBM shall at all times be acting as an independent contractor for WellPoint and Plans. Nothing in this Agreement shall be deemed or construed to create a joint venture, fiduciary, partnership or employer/employee relationship between the Parties, including, but not limited

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to, as between PBM and any Plan. In addition, neither Party shall have any power or authority to act for or on behalf of, or to bind the other except as expressly granted, and no other or greater power or authority shall be implied by the grant or denial of power or authority specifically mentioned.

10. [*]

10.1

[*]

	(a)		[*]
	(b)		[*]

	10.2		[*]
	10.3		[*]

	(a)		[*]
	(b)		[*]
	(c)		[*]

11. INDEMNIFICATION

WellPoint and PBM shall each indemnify, defend and hold harmless the other Party, and their Affiliates and subsidiaries, and all of their directors, officers, employees, and agents, from and against any and all losses, claims, damages, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees and costs) arising from third party claims resulting from (i) the indemnifying Party’s failure to perform its obligations under this Agreement, (ii) the indemnifying Party’s violation of any law, statute, ordinance, order, rule or regulation, and/or (iii) the indemnifying Party’s negligence or willful misconduct. The obligation to provide indemnification under this Agreement shall be contingent upon the Party seeking indemnification (i) providing the indemnifying Party with prompt written notice of any claim for which indemnification is sought, (ii) allowing the indemnifying Party to control the defense and settlement of such claim, provided however that the indemnifying Party agrees not to enter into any settlement or compromise of any claim or action in a manner that admits fault or imposes any restrictions or obligations on an indemnified Party without that indemnified Party’s prior written consent, which will not be unreasonably withheld, and (iii) cooperating fully with the indemnifying Party in connection with such defense and settlement.

12. EXCLUSIVITY/NON-COMPETE

12.1

Exclusivity.

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Redacted text. Confidential treatment requested; omitted text filed separately with the Securities and Exchange Commission.

	(a)		WellPoint agrees that PBM shall be the exclusive provider of the pharmacy benefit management services to be provided by PBM under the terms of this Agreement for WellPoint and its Affiliates except for the following: (i) if WellPoint or an Affiliate acquires, directly or indirectly, another entity that has contracted with another pharmacy benefit manager for similar services, such acquired entity may honor the terms of said other agreement until the earlier to occur of: (1) the expiration of the then current term of such agreement, or (2) the earliest date on which such agreement can be terminated without adversely impacting the acquired entity and its customers, which adverse impact may include less favorable financial terms, and without breach of the agreement by such entity or financial penalty to such entity; (ii) if WellPoint acquires another entity that owns a pharmacy benefit management company, that entity may continue to utilize the services of such pharmacy benefit management company solely for such acquired entity’s own purposes or to continue to provide pharmacy benefit management services for plans administered by such acquired entity (provided, however, that in no event may WellPoint or any WellPoint Affiliate transition any other Plans or Covered Individuals from WellPoint or any WellPoint Affiliate to such acquired entity such that they receive pharmacy benefit management services from the pharmacy benefit management company owned by such acquired entity); (iii) WellPoint shall have the ability to contract with another pharmacy benefit manager to provide similar services in a geographic region in which PBM does not have established programs; or (iv) WellPoint shall have the ability to contract with another pharmacy benefit manager to provide similar services outside of the United States. Nothing in this Section 12.1 shall prohibit Plans or Plan sponsors that elect to carve out the prescription drug benefit from an Integrated Arrangement administered by WellPoint from entering into separate agreements for pharmacy benefit management services on their own behalf. For purposes of the foregoing, an “Integrated Arrangement” means an arrangement pursuant to which a client receives prescription benefit management services or products in combination with medical benefits.
	(b)		Notwithstanding Section 12.1(a) above, the Parties acknowledge and agree that:

(i)

As of the Effective Date of this Agreement, WellPoint currently contracts with another vendor to administer its Cash Card Program. For purposes of the foregoing, WellPoint’s “Cash Card Program” means a program whereby the group or individual contracts with WellPoint for a medical benefit without the prescription drug benefit, but such group or individual purchases a discount card in order to make prescription drug purchases. WellPoint may continue its Cash Card Program with such vendor following the Effective Date; provided, however, that following the Effective Date, WellPoint agrees to negotiate in good faith with PBM concerning administrative services with respect to such existing Cash Card Program and to enter

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			into an agreement with PBM related thereto, subject to the parties, acting in good faith, mutually agreeing to pricing and other contractual terms which are as favorable to WellPoint as the existing vendor contract and which would take effect on the earliest date on which such vendor contract can be terminated without adversely impacting WellPoint and its customers and without breach of the vendor contract by WellPoint or financial penalty to WellPoint. If the Parties cannot reach an agreement on terms, acting in good faith, WellPoint may continue to utilize its existing vendor contract, provided that the claim volume thereunder shall not increase by more than [*] on a cumulative basis. Except for the foregoing, WellPoint agrees that, during the Term of this Agreement, WellPoint and PBM shall negotiate in good faith for PBM to administer any other WellPoint prescription drug cash card program business under this Agreement (if the parties can, acting in good faith, agree on mutually acceptable terms and amend this Agreement accordingly).
	(ii)		With respect to Federal Employee Plan (FEP) PPO plan and the Part D plan jointly offered in CMS Region 2, WellPoint represents and PBM acknowledges that as of the Effective Date, WellPoint is not the contracted vendor with respect to such plans for the provision of prescription drug benefit services and that such services are provided by other third party pharmacy benefit managers. In the event that during the Term of this Agreement, WellPoint is the contracted vendor for either such plan for the provision of prescription drug benefit services, WellPoint acknowledges and agrees that all such services will be provided by PBM under this Agreement.

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	12.2		Non-Compete. In consideration of the mutual covenants and consideration provided for herein and other consideration given to WellPoint in connection with the Parties entering into this Agreement, throughout the Term of this Agreement, except as provided below or in Section 12.1 above, neither WellPoint nor any of its Affiliates will engage, directly or indirectly, (or hold any equity interest in any entity that engages directly or indirectly) in all or any portion of a pharmacy benefit management business within the United States of America; provided, however, that (i) no owner of less than [*] of the outstanding stock of any publicly-traded corporation shall be deemed to be so engaged solely by reason thereof (provided, further, that neither WellPoint nor any of its Affiliates, in connection with an investment in such securities, has any right to appoint directors to such entity, or direct the nominating committee of such entity to nominate directors designated by WellPoint or its Affiliates or otherwise control the business or affairs of such entity) and (ii) this Section 12 shall not in any manner limit, restrict or otherwise preclude WellPoint or its Affiliates from continuing throughout the Term of this Agreement to operate its other non-pharmacy benefit management businesses as such businesses exist as of date hereof. For purposes of this provision, pharmacy benefit management business means services provided by PBM to WellPoint or its Designated Affiliates under the terms of this Agreement. Notwithstanding the above, this Section 12.2 shall not in any manner limit, restrict or otherwise preclude [*], [*], [*], or [*] or their successors from providing drug information services, cost of care or quality of care programs or any other services (except for core pharmacy benefit management services of the type provided by PBM hereunder) to WellPoint or third parties throughout the Term of this Agreement, provided however, that before beginning to offer services to third parties that are not currently offered or in development as of the Effective Date, WellPoint, [*], [*], [*], or [*], as appropriate, agrees to consult with PBM in good faith to determine whether it might be beneficial for WellPoint, [*], [*], [*], or [*] or their successors to offer such new services in conjunction with the pharmacy benefit management services provided by PBM hereunder and the parties shall thereafter cooperate in good faith concerning the implementation of any such agreed upon new services.
	12.3		Restrictions Reasonable. WellPoint and PBM agree that the covenants set forth in Section 12.1 and 12.2 above are reasonable with respect to its duration, geographical area, and scope. If the final judgment of a court of competent jurisdiction declares that any term or provision of Section 12.1 or 12.2 above is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall reduce the scope, duration, or area of the term or provision, delete specific words or phrases, or replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed. WellPoint acknowledges that the consideration that it receives pursuant to this Agreement is sufficient consideration for the enforcement of Sections 12.1 and 12.2 above.

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13. CONFIDENTIALITY, MARKETING, AND USE OF DATA

13.1

Confidential Information. PBM shall keep confidential all information received in the performance of its duties, including, but not limited to medical records and shall not disclose such information except where such disclosure:

	(a)		Is reasonably necessary to perform the PBM’s duties under this Agreement;
	(b)		Has been authorized by the Covered Individual;
	(c)		Is required or permitted by applicable law; or
	(d)		Is requested by WellPoint or persons designated by WellPoint, in which case any information so obtained by WellPoint shall be kept confidential, as required by applicable state and federal law. This provision shall include disclosure to WellPoint’s Plans.

	13.2		Confidentiality of Personally Identifiable Information. Both Parties agree to abide by state and federal laws and regulations regarding confidentiality of the Covered Individual’s personally identifiable information. PBM agrees to comply with all terms and conditions set forth in this Agreement and Exhibit E.
	13.3		Unauthorized Contact with Plans and Covered Individuals. PBM may not contact Plans or Covered Individuals in any manner, other than as specifically approved by WellPoint or required for PBM to perform its obligations under this Agreement.
	13.4		[*]
	13.5		Use of Name. PBM shall not publish, copy, reproduce, or use in any way WellPoint’s name, symbols, service mark(s) or trademark(s), without WellPoint’s prior written permission, which may be withheld for any reason. If WellPoint approves use of its name, symbols, service mark(s) or trademark(s), it may later withdraw that permission at any time, and for any reason, with notice to PBM. PBM has no license to use the Brands and nothing in this Agreement shall be deemed to grant a license to PBM to use the Brands. Any references to the Brands made by PBM in its own materials are subject to review and approval by WellPoint.
	13.6		Proprietary Materials. All information and material provided by either Party in contemplation of or in connection with this Agreement remains proprietary to the disclosing Party. Neither Party shall disclose any information proprietary to the other, or use such information or material except: (1) as otherwise set forth in this Agreement; (2) as may be required to perform the disclosing Party’s obligations hereunder; (3) as required to deliver pharmacy benefit management services or administer a Plan; (4) to Plan or its designees; (5) upon the express written consent of

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			the other Party; or (6) as required by law or regulation; provided that either Party may disclose such information to its legal advisors, lenders and business advisors, provided that such legal advisors, lenders and business advisors agree to maintain confidentiality of such information.
	13.7		Plan Data Transmission. All data transmitted to and from PBM will be transacted in accordance with applicable federal and state law, including the privacy and security standards set out in HIPAA and the regulations thereunder.

14. RECORDS

All records associated with this Agreement, including Claims records, and excluding any and all of PBM’s Business Proprietary Information, in the possession of PBM are and shall remain the property of WellPoint upon termination of this Agreement. PBM shall return in their entirety and at no cost to WellPoint full and complete data sets of such property in a form as agreed upon by the parties. PBM will retain electronic or paper copies of its Claims and Plan information for a period of time no less than the period required by ERISA, or WellPoint’s record retention policy, whichever is greater, and shall abide by the Business Associate Agreement between PBM and the WellPoint as set forth in Exhibit E, attached hereto and incorporated by reference. Notwithstanding the preceding, prior to destroying any Plan Claim records, PBM will provide WellPoint the opportunity to take possession of the records.

15. INFORMATION SECURITY

	15.1		PBM represents that it currently follows its usual and customary policies and practices as a means to prevent any compromise of its information systems, computer networks, or data files (“Systems”) by unauthorized users, viruses, or malicious computer programs (“Malicious Functionalities”) which could in turn be propagated via computer networks, email, magnetic media or other means to WellPoint. PBM agrees to immediately give WellPoint notice if the security of its Systems is breached and such breach affects WellPoint’s or any Plan’s data or PBM’s performance of services pursuant to this Agreement.
	15.2		PBM agrees to apply appropriate internal information security practices, including, but not limited to: using appropriate firewall and anti-virus software; maintaining said countermeasures, operating systems, and other applications with up-to-date virus definitions and security patches; installing and operating security mechanisms in the manner in which they were intended sufficient to ensure WellPoint will not be impacted nor operations disrupted; and permitting only authorized users access to computer systems and applications.
	15.3		PBM specifically agrees to: use up-to-date anti-virus tools to remove known Malicious Functionalities from any email message or data transmitted to WellPoint; prevent the transmission of attacks on WellPoint via the network connections between WellPoint and the PBM; and prevent unauthorized access to WellPoint systems via PBM’s networks and access codes.

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	15.4		In accordance with all applicable US and International privacy laws, PBM agrees to safeguard confidential protected individually identifiable personal information (health, financial, identity) which are received, transmitted, managed, processed, etc. and to require any subcontractor or agent that transmits or receives such information to meet these same security agreements.
	15.5		Subject to reasonable notice, PBM will provide WellPoint an opportunity to conduct a security audit of PBM’s systems that are applicable to the services provided to WellPoint by PBM, provided that such audits are not conducted more than once a year.
	15.6		PBM acknowledges that it maintains personally identifiable financial information of consumers and agrees to maintain a current SAS 70 Type II Technical and Procedural audit. PBM will provide WellPoint a copy of the SAS 70 Type II Technical and Procedural audit by the end of April each year during the term of this Agreement. PBM acknowledges and agrees that it will provide a copy of PBM’s then-current SAS 70 Type II Technical and Procedural audit to Plans upon request.

16. GENERAL PROVISIONS

	16.1		Entire Agreement. This Agreement and all Exhibits, and other documents furnished pursuant to this Agreement and expressly made a part hereof, shall constitute the entire agreement relating to the subject matter hereof between the Parties hereto, and supersedes all other agreements, written or otherwise. In the case of any inconsistency with this Agreement the order of precedence will be as follows: federal law, state law, this Agreement and WellPoint’s provider manual(s). This Agreement may be amended by mutual agreement of the Parties hereto at any time, but, to be effective, any amendment hereto must be in writing and signed by an authorized representative of each Party.
	16.2		Applicable Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of New York. However, coverage issues specific to a Plan or Covered Individual are governed by the state laws where the Plan is issued, unless such state laws are otherwise preempted by federal law. Any dispute arising out of or related in any manner to this Agreement shall be referred exclusively to the United States District Court for the Southern District of New York.
	16.3		Change in Law. From time to time, federal, state and local legislative bodies, boards, departments or agencies may enact or issue laws, rules, or regulations pertinent to this Agreement. To the extent that any such enactment or issuance has the effect of materially altering the obligations of either PBM or WellPoint or has a material negative financial impact to either party hereunder, or to the extent that any court of competent jurisdiction makes a determination or otherwise takes action that renders invalid or unenforceable, or has the effect of materially altering, any term or provision of this Agreement, or has a negative financial impact to either Party

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			hereunder, the Parties shall negotiate in good faith a modification of the services and/or pricing terms as necessary to maintain the Parties’ comparable economic positions as of the Effective Date.
	16.4		Notices. All notices under this Agreement shall be in writing and shall be delivered or mailed, certified or registered mail, or overnighted by use of a nationally recognized courier, to the other Party at the address listed below or in the applicable Exhibit to this Agreement. Notices under this Agreement may also be emailed or sent by facsimile (with a paper copy also delivered or mailed as described in this Section 16.3).

		If to WellPoint		WellPoint, Inc.
				120 Monument Circle
				Indianapolis, IN 46204
				Attn: General Counsel
				Fax: (317) 488-6821
		If to PBM:		Express Scripts, Inc.
				One Express Way
				St. Louis, Missouri 63121
				Attn: President
		with a copy to:		General Counsel
				Fax: (800) 417-8163

16.5

Dispute Resolution Prior to Termination for Cause. Neither Party shall exercise any termination right under Section 6.2(a) other than a termination by WellPoint for a Material PG Breach, unless the following steps are followed:

	(a)		In the event of any material dispute regarding this Agreement, the Parties agree that at the earliest time the dispute will be referred to the Joint Operating Pharmacy Committee. The Committee shall have a fifteen (15) day period to review the dispute during which the Committee will meet in person as soon as practicable and make good faith efforts to resolve the dispute to the satisfaction of the Parties.
	(b)		If such dispute is not resolved by the Committee, the Parties agree that the dispute will be referred to the President of WellPoint and the President of PBM. The Presidents shall have a fifteen (15) day period to review the dispute during which the Presidents will meet in person as soon as practicable and make good faith efforts to resolve the dispute to the satisfaction of the Parties.
	(c)		In the event the dispute is not resolved by the Presidents, the Parties agree that the dispute will be subject to non-binding mediation under the rules of the American Arbitration Association.

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16.6

Assignment and Subcontracting.

	(a)		This Agreement and/or any of the Parties’ respective rights or obligations hereunder may not be assigned or transferred, directly or indirectly, by operation of law or otherwise, by either Party without the prior written consent of the other Party.
	(b)		PBM shall remain fully responsible and liable for performance of any such services to be performed by PBM under this Agreement but delegated to any other agent or subcontractor. This Agreement shall, however, be binding on any assignees, delegees or successors in interest to the Parties to the Agreement. For purposes of this Section 16.6(b), the term “successors” shall include any entity: (i) that acquires all or substantially all of the assets of any Party to this Agreement; (ii) that results from the consummation of a reorganization, recapitalization or similar restructuring of any Party to this Agreement; or (iii) that is the surviving entity resulting from a merger, consolidation or similar business combination with any Party to this Agreement.
	(c)		PBM will disclose to WellPoint any other subcontractors that perform material functions on behalf of PBM in connection with this Agreement and shall obtain advance approval of WellPoint of such subcontractors and of any changes in such subcontractors, which approval will not be unreasonably withheld.
	(d)		PBM represents and warrants that it and all of its agents and subcontractors will comply with all applicable law and the terms of this Agreement.

16.7

Force Majeure. Neither Party shall be deemed to be in violation of this Agreement if such Party is prevented from performing any of its obligations hereunder for any reason beyond its reasonable control, including without limitation, acts of God, acts of any public enemy, floods, statutory or other laws, regulations, rules, or orders of the federal, state, or local government or any agency thereof; provided, however, that work stoppages, labor actions, and union strikes shall not constitute a force majeure under this Section 16.7. PBM shall create and maintain disaster avoidance procedures and a disaster recovery plan designed to safeguard WellPoint’s data and the business continuity of the processes for which PBM is responsible throughout the Term, and such procedures shall be subject to WellPoint’s review. PBM’s disaster avoidance procedures and disaster recovery plan shall comply with applicable federal or state laws and regulations, including without limitation OPM requirements regarding flexibility for pharmacy restrictions, refills, additional supplies of medications as backup, and mail order pharmacy. PBM shall revise such procedures as may be reasonably required by WellPoint from time to time throughout the Term. For all documents or materials of any type produced in whole or in part in connection with a

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			Statement of Work at any location, PBM shall use offsite storage in which it shall retain copies of all such items on no less frequently than a twice monthly basis. Items so stored shall include but not be limited to work in process, work papers, drafts and internal PBM memoranda.
	16.8		[*]
	16.9		Definitions. Unless otherwise specifically noted, the capitalized terms set forth in Section 1 of this Agreement will have the same meaning when used in any Exhibit attached hereto.
	16.10		No Third Party Beneficiaries. WellPoint and PBM specifically state, acknowledge and agree that this Agreement is intended solely for the benefit of each Party hereto and their respective successors or permitted assigns, and it is not the Parties’ intent to confer any third party beneficiary rights hereunder and no such rights are conferred hereunder to any third party including, without limitation, Covered Individuals.
	16.11		Authorization of Agreement. PBM and WellPoint each represent to the other, that this Agreement constitutes a valid and enforceable obligation of PBM and WellPoint in accordance with its terms.
	16.12		Counterpart Copies. This Agreement may be executed in two counterparts, each of which shall be an original, but such counterparts shall constitute one and the same instrument.
	16.13		Exhibits. The Exhibits attached to this Agreement are an integral part of this Agreement and are incorporated herein by reference.
	16.14		Headings. The headings of the various Sections of this Agreement are inserted merely for the purpose of convenience and do not expressly or by implication limit, define or extend the specific terms of the Section so designated.
	16.15		HIPAA Privacy and Security. PBM shall at all times act in accordance with the privacy and security standards set out in HIPAA and the regulations thereunder when performing under this Agreement, and shall abide by the Business Associate Agreement set forth in Exhibit E. PBM represents and warrants that its subcontractors shall likewise comply with all applicable provisions of HIPAA and the regulations thereunder in performing services and duties in connection with or related to this Agreement.
	16.16		No waiver. All rights and remedies given to WellPoint or the PBM under this Agreement are distinct, separate and cumulative, and the use of one or more thereof shall not exclude or waive any other right or remedy allowed at law or in equity, unless specifically waived in this Agreement. Further, the fact that a Party may not have insisted upon strict compliance with this Agreement, in connection with an act, omission or transaction of the other, shall not relieve the other Party of the obligation

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			to perform strictly in accordance with the terms of this Agreement. Waiver of a breach of any provision of this Agreement shall not be deemed a waiver of any other breach of the same or a different provision.
	16.17		Survival. The rights and obligations of the Parties hereto set forth in Sections 2.3, 2.5(b), 2.9, 2.11, 2.16, 2.17 (and Exhibit O), 3.2, 3.3(g), 3.6, 3.9(d), 5.1, 5.2(a), 5.3(e) and (f), 6.3, 6.4, 7, 9, 11, 13, 14, 16.2, and 16.17 (and any other Section where, by its context, is intended to survive termination or expiration of this Agreement) shall survive and continue after expiration or termination of this Agreement and shall bind the Parties and their successors and assigns.
	16.18		Solicitation. During the Term of this Agreement, PBM agrees that it will not knowingly respond to a Request for Proposal (RFP) for an Integrated Arrangement, whether from an existing or prospective client of WellPoint or PBM. For purposes of this Section 16.18, the term “Integrated Arrangement” has the meaning set forth in Section 12.1(a) of this Agreement. PBM will provide WellPoint reasonable assistance with respect to any such RFP consistent with Section 3.22(l). PBM agrees that WellPoint is entitled to enforce the terms of this Section 16.18 through equitable and injunctive relief as well as other remedies permitted by law. If this Section 16.18 is declared unenforceable in any judicial proceeding for being of too long a duration or too broad in scope, then this Section 16.18 shall still be enforceable for such maximum period of time and for such scope as will make the provisions hereof enforceable. PBM acknowledges that the rights and privileges granted to WellPoint in this Section 16.18 are of special and unique character, which gives them a peculiar value, the loss of which may not be reasonably or adequately compensated for by damages in an action at law, and that a breach by PBM of this Section 16.18 will cause WellPoint great and irreparable injury and damage. Accordingly, PBM hereby agrees that WellPoint shall be entitled to remedies of injunction (without the posting of any bond), specific performance or other equitable relief to prevent a breach of this Section 16.18. This provision shall not be construed as a waiver of any other rights or remedies which WellPoint may have for damages. WellPoint shall be entitled to recover against PBM all attorneys’ fees, court costs and the costs of posting bond (if any) incurred by it in enforcing any provisions of this Section 16.18.

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[Signature Page Follows]

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EXHIBIT A

FEES AND PRICING

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3 pages redacted in their entirety

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EXHIBIT A-2

Miscellaneous Fees

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7 pages redacted in their entirety

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Execution Version

EXHIBIT B

REPORTS TO WELLPOINT

To the extent applicable and as requested by WellPoint from time to time, PBM shall provide the reports set forth in this Exhibit B, subject to Section 3.14. All monthly reports are due within ten (10) days following the end of the period to which the report relates. All quarterly reports are due within ten (10) business days following the end of the period to which the report relates. Upon notification by WellPoint of any reporting discrepancies, PBM will correct and resubmit a new report within ten (10) days. In the event there is any change in the data dictionary for any of the following reports, PBM shall provide the updated data dictionary and other information necessary for mapping of data elements to be completed. In addition to the following reports, PBM shall provide copies of PBM’s applicable policies as required by WellPoint for regulatory compliance purposes (e.g., policies related to PBM’s operations, pharmacy management, timely payment, formulary management).

Standard Reports:

	•		Billing Summaries (available at the group level for ASO groups)
	•		Claims Detail Report
	•		Claims Summary Report
	•		Financial Detail Report (including adjustments)
	•		Financial Fee Invoices (balanced with the electronic Claims file and the miscellaneous charges
	•		Detail for Miscellaneous charges (group, member ID, fee description, and amount)
	•		Electronic claim files standard card (separate files for lines of business or as designated by WellPoint)
	•		Electronic Claims Files 100% co-payment funded
	•		PBM will provide electronically a display of all WellPoint Paid Claims data accumulated for all Network Pharmacies by each Plan (commonly referred to as a paid Claims file) on a monthly basis in a format mutually agreed to by the Parties.

Rebate Reports (through December 31, 2009):

	•		Formulary Rebate Allocation (by group/client)
	•		Summary by Plan/Client
	•		Rebate Distribution (group level)
	•		Rebate Minimum
	•		Reconciliation Update

Rebate Reports (following December 31, 2009)

•

PBM’s Standard Rebate Reports supplemented by claim level Rebate data feed

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Audit Reports:

	•		SAS 70 or equivalent
	•		PBM’s Ethical Guidelines (provided on an annual basis)
	•		Performance Guarantees (as described in Exhibits D and I)

Eligibility Report:

•

Exception (a list of member records from electronic eligibility updates that are not accepted by the system along with a detailed explanation of why the record was not loaded.

On-line Reporting Access:

•

PBM shall provide WellPoint and WellPoint customers on-line access to WellPoint’s Claims data via PBM’s proprietary software package. PBM shall provide software upgrades, unlimited log-on identification numbers, and twenty-four (24) months of Claims data storage at no additional charge.

Utilization Reports (monthly):

	•		Break out by all WellPoint business segments (i.e., Commercial, Individual, Fully Insured (FI), ASO, National Accounts (NA), Large Group (LG), Small Group (SG), Part D, Medicare, State Sponsored Business (SSB)) and break out by Customer, Client, Group
	•		Clinical Management Savings separate edit (DO, PA, ST, QL) saving report by program
	•		Clinical Management Utilization (approval and denial rates based on rejects)
	•		Generic Utilization Reporting
	•		Generic Initiatives Program Savings
	•		Half Tab Savings Report
	•		Specialty Utilization Reporting
	•		Mail Order Utilization Reporting

Formulary Management:

	•		Estimated total savings from VAC
	•		Estimated savings from approved P&T clinical edits
	•		Total COC Savings from Total COC VAC models

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PBM’s Operations Performance Report, including:

	•		Turn Around Time (TAT) tracking report
	•		Call Center Metrics
	•		Home Delivery Metrics
	•		Reject Reporting

PBM’s Trend Central Reports, including:

•

PA Approval and Denial Reports

PBM’s ACES Reporting, including:

•

Letter Intervention Reporting

OTC Initiatives:

	•		Break out by all WellPoint business segments (i.e., Commercial, Individual, Fully Insured (FI), ASO, National Accounts (NA), Large Group (LG), Small Group (SG), Part D, Medicare, State Sponsored Business (SSB)) and break out by Customer, Client, Group
	•		OTC
	•		ELIZA

Plan Performance Reports (monthly):

	•		Break out by all WellPoint business segments (i.e., Commercial, Individual, Fully Insured (FI), ASO, National Accounts (NA), Large Group (LG), Small Group (SG), Part D, Medicare, State Sponsored Business (SSB)) and break out by Customer, Client, Group
	•		Executive Summary
	•		Trend Reports
	•		Top 20 therapeutic classes
	•		MMAC Savings
	•		Effective network discount rate
	•		Network Savings

Medication Management, Strategic Alliances, and Clinical Health Policy (quarterly):

	•		Break out by all WellPoint business segments (i.e., Commercial, Individual, Fully Insured (FI), ASO, National Accounts (NA), Large Group (LG), Small Group (SG), Part D, Medicare, State Sponsored Business (SSB)) and break out by Customer, Client, Group
	•		Level 1 DUE edits for safety
	•		MedVantx

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	•		ELIZA
	•		Benefit Design
	•		Prospective Impact Modeling tools (member impact and estimated savings) similar to consultative Analysis
	•		Pharmacy Predictive Modeling
	•		Care Management:

	o		Diabetes, Hypertension compliance, Hypertension Persistence (new for 2010)
	o		Behavioral Health follow up
	o		Controller Meds for asthmatics
	o		Appropriate treatment for URI

•

Clinical outcomes:

o

Diabetes, CHF & Asthma ER Visits

	•		Osteoporosis Screening (new for 2010)
	•		Patient Safety:

o

Persistent meds monitoring

	•		Drug compliance and persistency by drug
	•		Delegated Organization Performance Report (included in WellPoint’s Delegation Manual)
	•		VIP Programs

Medicaid Program Reporting Requirements

Data Elements Report / Encounter Data		MRMIP		N/A		Mail directly; notify Compliance
Data Elements Report / Encounter Data		AIM		Electronic File		Mail directly; notify Compliance
Pharmacy Prior Authorization Denial Log		Los Angeles		N/A		Mail directly; notify Compliance
Pharmacy Denial Letters (mbr & phys)		Los Angeles		Hard Copy		Mail directly; notify Compliance
Formulary Changes		Tulare				Compliance mails
Formulary Changes		Stanislaus-DHS				Compliance mails
Formulary Changes		Sacramento				Compliance mails
Formulary Changes		Central Valley/Bay Area		Electronic File		Compliance mails
Pharmacy Utilization		Los Angeles				Compliance mails
AN-DUR-1 PDL Comparison of Select Therapeutic Classes, Open Access With No		Indiana		MS Excel		Mail directly; notify Compliance

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AN-DUR-2 PDL Comparison of Select Therapeutic Classes, Clinical Edits With Rationale		Indiana		MS Excel		Mail directly; notify Compliance
AN-DUR-3 Number of Prior Authorizations By Drug		Indiana		MS Excel		Mail directly; notify Compliance
AN-DUR-4 Pharmacy Prior Authorizations		Indiana		MS Excel		Mail directly; notify Compliance
AN-DUR-5 Pharmacy-Related Grievances		Indiana		MS Excel		Mail directly; notify Compliance
Pharmacy Ranking of Drugs by Volume of Prescription Paid		Kansas				Compliance mails
Pharmacy Reports Ranking Top 100 Drugs by Dollars Paid		Kansas				Compliance mails
Pharmacy Ranking of Drugs by Volume of Prescription Paid		Kansas				Compliance mails
Pharmacy Reports Ranking Top 100 Drugs by Dollars Paid		Kansas				Compliance mails
RX Exclusion DMHC Filing		Sacramento				Mail directly; notify Compliance
Medallion II/FAMIS — Formulary and Pre-Auth Requirements		Virginia				Compliance Mails
Medallion II/FAMIS — Formulary Updates		Virginia				Compliance Mails
Medallion II — Notify DMAS prior to implementation of any co-payments on prescription drugs		Virginia				Mail directly; notify Compliance
I — Monthly Pharmacy Rebate Accrual		South Carolina				Compliance Mails

Mainstream HW21 Compound Paid		Monthly
Mainstream HW21 Non-Compound Paid		Monthly
Mainstream HW21 Reversals		Monthly
Mainstream HW19 Compound Paid		Monthly
Mainstream HW219 Non-Compound Paid		Monthly
Mainstream HW19 Reversals		Monthly
Cerner		Weekly
Managed Care		Monthly
Mainstream/ Compound Paid		Weekly
Mainstream/ Non-Compound Paid		Weekly
Mainstream/ Reversals		Weekly
Mainstream / Denied		Weekly
Managed Care		Monthly
IHEA		Monthly

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Maintstream
WPDP.NONX.WPD110IM.PLAN190(0)
WPDP.NONX.WPD110IM.PLAN310(0)
WPDP.NONX.WPD110IM.PLAN340(0)
WPDP.NONX.WPD110IM.PLAN341(0)
WPDP.NONX.WPD110IM.PLAN342(0)
WPDP.NONX.WPD110IM.PLAN343(0)
WPDP.NONX.WPD110IM.PLAN345(0)
WPDP.NONX.WPD110IM.PLAN344(0)
WPDP.NONX.WPD110IM.PLAN048(0)
WPDP.NONX.WPD110IM.PLAN998(0)
WPDP.NONX.WPD110IM.PLAN311(0)
WPDP.NONX.WPD110IM.PLAN358(0)
WPDP.NONX.WPD110IM.PLAN180(0)
WPDP.NONX.WPD110IM.PLAN359(0)		Monthly
LACARE		Monthly
Mainstream Paid		Monthly

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EXHIBIT C

BANKING

1. [*]

2. [*]

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3. Contact Information

Persons to contact at WellPoint regarding banking issues are:

Primary Contact:

Name: Judy Laws
Phone Number: 317-488-6031
E-mail: judy.laws@wellpoint.com

Submit Invoice To: chris.barone@wellpoint.com

Secondary Contact:
Name: Kurt Briggs
Phone: 317-488-6666
E-mail: kurt.briggs@wellpoint.com

Persons to contact at the PBM regarding banking issues are:

Primary Contact:
Name: Donna Flieg
Phone Number: 314-810-6722
E-mail: dflieg@express-scripts.com

Secondary Contact:
Name: Suzanne Dolph
Phone: 314-810-3125
E-mail: srdolph@express-scripts.com

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EXHIBIT D

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15 pages redacted in their entirety

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EXHIBIT E

BUSINESS ASSOCIATE AGREEMENT

If, during the term of the Agreement, the PBM performs services for WellPoint which require the use or disclosure of Protected Health Information (as defined herein), then PBM shall be deemed a Business Associate of WellPoint and the following provisions shall apply:

This agreement (“Agreement”) is effective on December 1, 2009 and is between PBM (“Business Associate”) and WellPoint (“Company”) on behalf of itself and its affiliates who are Covered Entities or Business Associates and who have a business relationship with Business Associate, if any (hereinafter collectively “Company”). The purpose of this Agreement is to comply with the requirements of the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (45 C.F.R. Parts 160-64), any applicable state privacy laws, any applicable state security laws, any applicable implementing regulations issued by the Insurance Commissioner or other regulatory authority having jurisdiction and the requirements of the Health Information Technology for Economic and Clinical Health Act, as incorporated in the American Recovery and Reinvestment Act of 2009 (the “HITECH Act”) and any regulations adopted or to be adopted pursuant to the HITECH Act that relate to the obligations of business associates. Business Associate recognizes and agrees it is obligated by law to meet the applicable provisions of the HITECH Act.

All capitalized terms in this Agreement that are not defined in this Agreement will have the meaning ascribed to those terms by 45 C.F.R. Parts 160-164, or applicable insurance regulations that are applicable to Company’s relationship with Business Associate.

A.

Privacy of Protected Health Information

1.

Permitted and Required Uses and Disclosures. Business Associate is permitted or required to Use or disclose Protected Health Information (“PHI”) it requests, creates or receives for or from Company (or another business associate of Company) only as follows:

a)

Functions and Activities on Company’s Behalf. Business Associate is permitted to request, Use and disclose PHI it creates or receives for or from Company (or another business associate of Company), consistent with the Privacy Rule and the HITECH Act, only as described in this Agreement, or other agreements during their term that may exist between Company and Business Associate. Specifically, Business Associate is permitted to use and disclose PHI for the purposes as follow:

(i)

to use in information technology systems testing during the integration process to prepare for the ultimate transition of Companies members to Business Associate for PBM and pharmacy services.

b)

Business Associate’s Operations. Business Associate may Use PHI it creates or receives for or from Company as necessary for Business Associate’s proper

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management and administration or to carry out Business Associate’s legal responsibilities. Business Associate may disclose such PHI as necessary for Business Associate’s proper management and administration or to carry out Business Associate’s legal responsibilities only if:

	(i)		The Disclosure is Required by Law; or
	(ii)		Business Associate obtains reasonable assurance evidenced by written contract, from any person or organization to which Business Associate will disclose such PHI that the person or organization will:

	a.		Hold such PHI in confidence and Use or further disclose it only for the purpose for which Business Associate disclosed it to the person or organization or as Required by Law; and
	b.		Notify Business Associate (who will in turn promptly notify Company) of any instance of which the person or organization becomes aware in which the confidentiality of such PHI was breached.

	c.)		Data Aggregation Services. If specifically directed by the Company, the Business Associate will provide Data Aggregation services relating to the Health Care Operations of the Company.
	d)		Minimum Necessary and Limited Data Set. In any instance when Business Associate Uses, requests or discloses PHI under this Agreement or in accordance with other agreements that exist between Company and Business Associate, Business Associate shall utilize a Limited Data Set, if practicable. Otherwise, Business Associate may Use or disclose only the minimum amount of PHI necessary to accomplish the intended purpose, except that Business Associate will not be obligated to comply with this minimum necessary limitation with respect to:

	(i)		Disclosure to or request by a Health Care Provider for Treatment;
	(ii)		Use for or Disclosure to an Individual who is the subject of Company’s PHI, or that Individual’s Personal Representative;
	(iii)		Use or Disclosure made pursuant to an authorization compliant with 45 C.F.R. §164.508 that is signed by an Individual who is the subject of Company’s PHI to be used or disclosed, or by that Individual’s Personal Representative;
	(iv)		Disclosure to the United States Department of Health and Human Services (“HHS”) in accordance with Section B(5) of this Agreement;
	(v)		Use or Disclosure that is Required by Law; or
	(vi)		Any other Use or Disclosure that is excepted from the Minimum Necessary limitation as specified in 45 C.F.R. §164.502(b)(2).

e)

Use by Workforce. Business Associate shall advise members of its workforce of their obligations to protect and safeguard PHI. Business Associate shall take appropriate disciplinary action against any member of its workforce who uses or discloses PHI in

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contravention of this Agreement.

2.

Prohibitions on Unauthorized Requests, Use or Disclosure.

	a)		Business Associate will neither Use nor disclose Company’s PHI it creates or receives from Company or from another Business Associate of Company, except as permitted or required by this Agreement or as Required by Law or as otherwise permitted in writing by Company. This Agreement does not authorize Business Associate to request, Use, disclose, maintain or transmit PHI in a manner that will violate 45 C.F.R. Parts 160-164.
	b)		Business Associate will not develop any list, description or other grouping of Individuals using PHI received from or on behalf of Company, except as permitted by this Agreement or in writing by Company. Business Associate will not request, Use or disclose any list, description or other grouping of Individuals that is derived using such PHI, except as permitted by this Agreement or in writing by Company.

	3.		Sub-Contractors and Agents. Business Associate will require any of its subcontractors and agents to provide reasonable assurance, evidenced by written contract, that subcontractor or agent will comply with the same privacy and security obligations as Business Associate with respect to such PHI, including the obligations described in Section 4 herein.
	4.		Information Safeguards. Business Associate will develop, implement, maintain and use a written information security program that contains the necessary administrative, technical and physical safeguards that are appropriate to the Business Associate’s size and complexity in order to achieve the safeguarding objectives as detailed in Social Security Act § 1173(d) (42 U.S.C. § 1320d-2(d)), 45 C.F.R. Part 164.530(c) and any other implementing regulations issued by the U.S. Department of Health and Human Services, as well as industry best practices, to preserve the integrity and confidentiality of and to prevent non-permitted or prohibited Use or Disclosure of PHI created or received for or from Company and any other applicable state law imposing information security requirements. Business Associate will document and keep these safeguards current.
			Business Associate shall provide Company with such information concerning such safeguards as Company may from time to time request, and shall, upon reasonable request, give Company reasonable access to Business Associate’s facilities used for the maintenance or processing of PHI, for inspection and reasonable access to its books, records, practices, policies and procedures concerning the Use and Disclosure of PHI, and its general security policies, for the purpose of determining Business Associate’s compliance with this Agreement.
			The following items a) through r) are required to protect all WellPoint Confidential Information, including, but not limited to PHI and Company proprietary information (hereinafter collectively designated “Data” for these items) in addition to, or as required by the above safeguards, Business Associate shall:

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	a)		Establish and maintain a Security Awareness Program that communicates and provides training on its security policies to the workforce.
	b)		Establish and implement a data backup program to create and maintain retrievable exact copies of Data.
	c)		Establish and implement an access management program designed to guard against the unauthorized access, alteration, or destruction of Data and supporting systems and applications. The program shall require the establishment, maintenance and tracking of individual user IDs, passwords, and associated access levels to Data in accordance with minimum access necessary to perform job functions providing services to Company. Access should be reviewed at least annually to ensure access is appropriate for the job function. Such measures shall include the installation and use of software which: (i) requires all users to enter a user identification and password prior to gaining access to the information systems; (ii) controls and tracks the addition and deletion of users; (iii) controls and tracks user access to areas and features of the information systems; and (iv) offers other security features to protect the confidentiality, availability and integrity of Data. Require that user passwords be changed at least every ninety (90) days, or sooner if a specific trained operator is no longer responsible for accessing Data, or if there is reasonable cause to believe that an unauthorized person has learned the password. All user IDs that are no longer authorized to obtain access to Data must be immediately deleted, revoked or disabled.
	d)		Restrict access to its physical facilities and environments, electronic networks, applications, and media by providing authorized users the minimum access necessary to perform their job function. Access permissions to electronic networks, applications and media shall be reviewed and modified/removed as appropriate no less then annually, upon change of user job function or upon user termination from employment or job assignment.
	e)		Implement and maintain adequate controls to restrict perimeter access to its facilities and sensitive areas such as, employee work areas, data centers, telecommunications closets, server rooms, and media libraries. Physical security access controls and lists shall be reviewed and modified as necessary, and at least annually. Computing devices used to access, receive, store, maintain or process Data must be located in a limited access room within the facility.
	f)		Establish and maintain an anti-virus program designed to guard against the introduction and propagation of any virus. Implementation must require at least daily virus scans and deployment of virus signature updates upon availability. Computing devices used to access, receive, store, maintain or process Data must be configured with up-to-date virus protection software.
	g)		Establish and maintain a security-patching program designed to guard against the exploitation of vulnerabilities. Implementation must require the periodic review of

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			security patch levels and ensure the timely application of updated security patches upon availability. Computing devices used to access, receive, store, maintain or process Data must be current with security related patches as they become available. Document and make available to Company on-site at Business Associate’s offices during the course of any Company audit, upon request, 1) the recommended configuration for devices on Company’s network, 2) the process for maintaining configurations and the application of patches and fixes when they become available, and 3) the process for secure deployment and device maintenance on Company’s network.
	h)		Establish and maintain an intrusion detection and/or intrusion prevention and firewall program designed to guard against unauthorized access to the Business Associate’s systems. Implementation must require periodic review of firewall and IDS/IPS updates. Application of updates must be deployed upon availability. Computing devices used to access, receive, store, maintain or process Data must be protected by a firewall to prevent unauthorized access from the public network. Only authorized services and protocols required by Business Associate to provide services will be permitted access to such computing devices. All other protocols and services must be denied. An intrusion detection system shall be deployed, properly configured, and actively monitored to detect network or computing device compromises.
	i)		To the extent that Business Associate operates electronic networks or applications that are accessible through the Internet, Business Associate shall conduct periodic penetration tests, and as necessary, implement in an expedient manner, corrective actions to mitigate vulnerabilities. Appropriate corrective action plans for vulnerabilities must be implemented in an expedient manner. All remote access to the network, network devices, servers or applications for any employee, vendor, consultant or contractor must utilize an acceptable two-factor authentication system. All remote access provided to any application for a customer or client that provides the capability of performing or displaying financial transaction data, or provides the capability of displaying or updating Personal Healthcare Information (PHI), Non-public Personal Information (NPI) or Personally Identifiable Information (PII) must utilize an acceptable two-factor or multi-factor authentication system. Computing devices used to access, receive, store, maintain or process Data remotely (such as from home or a hotel) must ensure the appropriate security controls are implemented to match those stated in this Exhibit, including, but not limited to, firewalls, current anti-virus signature, and two-factor authentication.
	j)		Encrypt all Data transmitted (e.g. email, file transfers, etc) over, or stored on public (open) networks at a minimum 128-bit encryption or such higher level as may be required by industry best practices or governmental regulations. Data must be protected while being transmitted on a private network using methods such as switched network and/or encryption.
	k)		Ensure that Data is not accessible by unauthorized persons on portable electronic and telecommunications devices such as laptop computers, through (a) adequate

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encryption software installed and activated and/or (b) policies that prohibit saving Data to the local drive, except as may be authorized in writing by Company and (c) policies that require the device to be physically secured when not in use. Ensure that comparable safeguards must be in place for personal digital assistants (PDAs), BlackBerries and other portable devices that house Data.

	l)		Data shall not be stored on desktops, laptops, personal digital assistants (PDAs), or other removable storage devices, such as diskettes, reels/tapes, compact discs (CDs), memory sticks or similar devices. All Data must be encrypted, using industry standard encryption processes.
	m)		Ensure proper custody and destruction of Data after it is no longer needed, including shredding of paper and erasing/wiping of electronic data in accordance with best practices (e.g. U.S. Department of Defense 5200-28-STD). Data must be securely stored at all times to prevent loss and unauthorized access or disclosure. Data requires secure disposal or destruction when no longer required, when requested by Company or upon the termination or expiration of the Agreement. Data must be burned, pulverized or shredded if in print or hard copy form using methods or techniques so that the media cannot practicably be read or reconstructed. When destruction methods utilize a two-step shred and pulverization approach, the shred portion of the destruction process should, at a minimum, render the paper media to a final size not to exceed 5/8 inch by approximately 2 inch, crosscut segment, with the shredded material stored and sealed in a container until the second pulverization step is completed. Data stored electronically, including, but not limited to information stored on tapes, disks or hard drives, must be deleted and wiped using industry best practices to ensure the information is thoroughly removed.
	n)		Develop and maintain a Disaster Recovery Plan and a Business Continuity Plan, which are tested annually and revised at a minimum quarterly. These shall include a written file/database back-up and recovery strategy, including procedures that create and maintain retrievable exact copies of Data, as appropriate, or as otherwise provided for in any contracts between Company and Business Associate.
	o)		Maintain audit trails of its physical facilities and environments and electronic networks, applications and media electronic consistent to maintain the confidentiality, integrity and availability of Data. Processes must be in place to create the appropriate audit trails to determine who has accessed Data.
	p)		Ensure an independent review, by internal or external professionals, of administrative, physical and technical policies and procedures and technological mechanisms comprising its security risk management program no less than annually, in accordance with industry standards. Corrective action plans, as necessary and appropriate, shall be implemented.
	q)		To the extent applicable, Business Associate shall take no action that would subject any PHI to regulation under

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	(i)		the EU PHI Protection Directive;
	(ii)		national legislation implementing the EU PHI Protection Directive in any Member State of the European Union; or
	(iii)		the Law of any other country that would

	a.		restrict the ability of Company or Business Associate to transfer or process such Data; or
	b.		grant to the individual to whom such Data pertains any greater rights or control over Company’s or Business Associate’s use of such Data than such individual has under the relevant laws of the United States (including relevant subordinate jurisdictions), without the prior written consent of Company that expressly approves subjecting such Data to such regulatory scheme. Company may withhold such approval in its sole discretion.

	r.)		Data shall not be used for test or development data, unless express Company approval is provided.
	s.)		In addition to reporting to Company any Use or Disclosure of PHI not permitted by the Agreement, Business Associate will also promptly report any Security Incidents of which Business Associate is aware, as detailed in Section C(1)of this Agreement.

B.

PHI Access, Amendment and Disclosure Accounting.

	1.		Access. Business Associate will promptly upon Company’s request make available to Company or, at Company’s direction, to the Individual (or the Individual’s Personal Representative) for inspection and obtaining copies any PHI about the Individual which Business Associate created or received for or from Company and that is in Business Associate’s custody or control, so that Company may meet its access obligations pursuant to and required by applicable law, including but not limited to 45 C.F.R. 164.524, and where applicable, the HITECH Act. Business Associate shall make such information available in electronic format where directed by the organization.
	2.		Amendment. Business Associate will, upon receipt of notice from Company, promptly amend or permit Company access to amend any portion of the PHI which Business Associate created or received for or from Company, pursuant to and required by applicable law, including but not limited to 45 C.F.R. Part 164.526.
			Business Associate will not respond directly to an Individual’s request for an amendment of their PHI held in the Business Associate’s Designated Record Set. Business Associate will refer the Individual to Company so that Company can coordinate and prepare a timely response to the Individual.
	3.		Disclosure Accounting. So that Company may meet its Disclosure accounting obligations pursuant to and required by applicable law, including but not limited to 45 C.F.R. Part 164.528:

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	a)		Disclosure Tracking. Business Associate will promptly, but no later than within seven (7) days of the Disclosure, report to Company for each Disclosure, not excepted from Disclosure accounting under Section B(3)(b) below, that Business Associate makes to Company or a third party of PHI that Business Associate creates or receives for or from Company, (i) the Disclosure date, (ii) the name and (if known) address of the person or entity to whom Business Associate made the Disclosure, (iii) a brief description of the PHI disclosed, and (iv) a brief statement of the purpose of the Disclosure (items i-iv, collectively, the “disclosure information”). For repetitive Disclosures Business Associate makes to the same person or entity (including Company) for a single purpose, Business Associate may provide (x) the disclosure information for the first of these repetitive Disclosures, (y) the frequency, periodicity or number of these repetitive Disclosures and (z) the date of the last of these repetitive Disclosures. Business Associate further shall provide any additional information, to the extent required by the HITECH Act or any regulation adopted pursuant thereto.
	b)		Exceptions from Disclosure Tracking. Business Associate need not report Disclosure of information or otherwise account for Disclosures of PHI that this Agreement or Company in writing permits or requires (i) for the purpose of Company’s Treatment activities, Payment activities, or Health Care Operations (except where such recording or accounting is required by the HITECH Act), and as of the effective dates for any such requirements; (ii) to the Individual who is the subject of the PHI disclosed, to that Individual’s Personal Representative or to another person or entity authorized by the Individual; (iii) to persons involved in that Individual’s Health Care or Payment for Health Care; (iv) for notification for disaster relief purposes; (v) for national security or intelligence purposes; (vi) to Law Enforcement Officials or Correctional Institutions regarding Inmates; or (vii) disclosed in a limited data set.
			Business Associate need not report any Disclosure of PHI that was made before April 14, 2003.
	c)		Except as provided in subsection d) below, Business Associate will not respond directly to an Individual’s request for an accounting of Disclosures. Business Associate will refer the Individual to Company so that Company can coordinate and prepare a timely accounting to the Individual.
	d)		Disclosure through an Electronic Health Record. However, when Business Associate is contacted directly by an individual based on information provided to the individual by Company, Business Associate shall make the accounting of disclosures available directly to the individual, but only if required by the HITECH Act or any related regulations.

4.

Confidential Communications and Restriction Agreements. Business Associate will promptly, upon receipt of notice from Company, send an Individual’s communications to the identified alternate address. Business Associate will comply with any agreement

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Company makes that restricts Use or Disclosure of Company’s PHI pursuant to 45 C.F.R. §164.522(a), provided that Company notifies Business Associate in writing of the restriction obligations that Business Associate must follow. Company will promptly notify Business Associate in writing of the termination or modification of any confidential communication requirement or restriction agreement.

5.

Disclosure to U.S. Department of Health and Human Services. Business Associate shall make its internal practices, books, and records relating to the Use and Disclosure of PHI received from Company (or created or received by Business Associate on behalf of Company) available to the Secretary of the United States Department of Health and Human Services, for purposes of determining Company’s compliance with 45 C.F.R. Parts 160-164. Unless the Secretary directs otherwise, Business Associate shall promptly notify Company of Business Associate’s receipt of such request, so that Company can assist in compliance with that request.

C.

Breach of Privacy and Security Obligations.

1.

Reporting. Business Associate will report to Company: (i) any Use or Disclosure of PHI (including Security Incidents) not permitted by this Agreement or in writing by Company; (ii) any Security Incident; (iii) any Breach, as defined in the HITECH Act; or (iv) any other breach of a security system, or the like, as such may be defined under applicable state law (collectively a “Breach”). Except as described in subparagraph “e)” below, Business Associate will, without unreasonable delay make the report to Company pursuant to such reasonable reporting guidelines provided by Company and on a form made available to Business Associate, or by such other reasonable means of reporting as may be communicated to Business Associate by Company, after Business Associate discovers such Breach. Business Associate shall cooperate with Company in investigating the Breach and in meeting Company’s obligations under the HITECH Act, and any other security breach notification laws or regulatory obligations.

a.

Report Contents. To the extent such information is available, Business Associate’s report will at least:

	(i)		Identify the nature of the non-permitted or prohibited access, Use or Disclosure, including the date of the Breach and the date of discovery of the Breach;
	(ii)		Identify the PHI accessed, used or disclosed, and provide an exact copy or replication of the PHI, as appropriate, in a format reasonably requested by Company, and to the extent available;
	(iii)		Identify what corrective action Business Associate took or will take to prevent further Breaches;
	(iv)		Identify what Business Associate did or will do to mitigate any deleterious effect of the Breach; and
	(v)		Provide such other information, including a written report, as Company may reasonably request.

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b.

Examples of Security Incidents. Company requires prompt notification from Business Associate if Business Associate experiences any Security Incidents that impact the confidentiality, integrity or availability of Company data or information systems. Below are some examples:

	(i)		Business Associate’s information systems are exposed to malicious code, such as a virus or worm, and such code could be transmitted to Company data or systems.
	(ii)		Unauthorized access is granted or obtained to servers or workstations that contain Company data or Business Associate discovers that Company data is being used, copied, or destroyed inappropriately.
	(iii)		Business Associate experiences an attack or the compromise of a server or workstation containing Company information requiring that it be taken offline.
	(iv)		Unauthorized access or disclosure has occurred involving Protected Health Information, which is an obligation under the HIPAA Privacy Rule.

	c.		Unsuccessful Security Incidents. Except as noted in C.1(e) below, the parties acknowledge and agree that this section constitutes notice by Business Associate to Company of the ongoing existence and occurrence of attempted but Unsuccessful Security Incidents (as defined below) for which no additional notice to Company shall be required. “Unsuccessful Security Incidents” shall include, but not be limited to, pings and other broadcast attacks on Business Associate’s firewall, port scans, unsuccessful log-on attempts, denials of service and any combination of the above, so long as no such incident results in unauthorized access, use or disclosure of PHI.
	d.		Breach of Unsecured Protected Health Information. A Breach of Unsecured Protected Health Information includes any Breach as defined in the HITECH act or regulations adopted pursuant thereto.
	e.		Medicare Vendor Reporting Requirements. To the extent that Business Associate is subject to any Center for Medicare and Medicaid (“CMS”) incident reporting requirements (including applicable timeframes for such reporting) as detailed in the services agreement between Company and Business Associate (including any amendments, exhibits or addenda), Business Associate shall comply with all such reporting requirements, in addition to those imposed hereby.

2.

Breach. Without limiting the rights of the parties elsewhere set forth in the Agreement or available under applicable law, if Business Associate breaches its obligations under this Agreement, Company may, at its option:

	a.		Exercise any of its rights of access and inspection under paragraph 4 of section A of this Agreement;
	b.		Require Business Associate to submit to a plan of monitoring and reporting, as Company may determine appropriate to maintain compliance with this Agreement

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and Company shall retain the right to report to the Secretary of HHS any failure by Business Associate to comply with such monitoring and reporting; or

c.

If for any reason Company determines that Business Associate has breached the terms of this Agreement and such breach has not been cured, Company may report such breach to the U.S. Department of Health and Human Services.

3.

Mitigation. Business Associate agrees to mitigate to the extent practicable, any harmful effect that is known to Business Associate of any security incident related to PHI or any use or disclosure of PHI by Business Associate in violation of the requirements of this BA Agreement. To the extent Company incurs any expense Company reasonably determines to be necessary to mitigate any Breach or any other non-permitted use or disclosure of Individually Identifiable Information, Business Associate shall reimburse Company for such expense.

D.

Compliance with Standard Transactions.

1.

If Business Associate conducts in whole or part Standard Transactions, for or on behalf of Company, Business Associate will comply, and will require any subcontractor or agent involved with the conduct of such Standard Transactions to comply, with each applicable requirement of 45 C.F.R. Part 162 for which HHS has established Standards. Business Associate will comply by a mutually agreed date, but no later than the date for compliance with all applicable final regulations, and will require any subcontractor or agent involved with the conduct of such Standard Transactions, to comply, with each applicable requirement of the Transaction Rule 45 C.F. R. Part 162. Business Associate agrees to demonstrate compliance with the Transactions by allowing Company to test the Transactions and content requirements upon a mutually agreeable date. Business Associate will not enter into, or permit its subcontractors or agents to enter into, any trading partner agreement in connection with the conduct of Standard Transactions for or on behalf of Company that:

	a)		Changes the definition, data condition or use of a data element or segment in a Standard Transaction.
	b)		Adds any data elements or segments to the maximum defined data set;
	c)		Uses any code or data element that is marked “not used” in the Standard Transaction’s Implementation Specification or is not in the Standard Transaction’s Implementation Specification; or
	d)		Changes the meaning or intent of the Standard Transaction’s Implementation Specification.

2.

Concurrence for Test Modification to Standard Transactions. Business Associate agrees and understands that there exists the possibility that Company or others may request from HHS an exception from the uses of a Standard in the HHS Transaction

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Standards. If this request is granted by HHS, Business Associate agrees that it will participate in such test modification.

	3.		Incorporation of Modifications to Standard Transactions. Business Associate agrees and understands that from time-to-time, HHS may modify and set compliance dates for the Transaction Standards. Business Associate agrees to incorporate by reference into this Agreement any such modifications or changes.
	4.		Code Set Retention (Only for Plans). Both parties understand and agree to keep open code sets being processed or used in the Agreement for at least the current billing period or any appeal period, whichever is longer.
	5.		Guidelines and Requirements. Business Associate further agrees to comply with any guidelines or requirements adopted by Company consistent with the requirements of HIPAA and any regulations promulgated thereunder, governing the exchange of information between Business Associate and the Company.

E.

Obligations upon Termination.

	1.		Return or Destruction. Upon termination, cancellation, expiration or other conclusion of the Agreement, Business Associate will if feasible return to Company or destroy all PHI, in whatever form or medium (including in any electronic medium under Business Associate’s custody or control), that Business Associate created or received for or from Company, including all copies of and any data or compilations derived from and allowing identification of any Individual who is a subject of the PHI. Business Associate will complete such return or destruction as promptly as possible, but not later than 30 days after the effective date of the termination, cancellation, expiration or other conclusion of Agreement. Business Associate will identify any PHI that Business Associate created or received for or from Company that cannot feasibly be returned to Company or destroyed, and will limit its further Use or Disclosure of that PHI to those purposes that make return or destruction of that PHI infeasible and will otherwise continue to protect the security any PHI that is maintained pursuant to the security provisions of this Agreement for so long as the PHI is maintained. Within such 30 days, Business Associate will certify in writing to Company that such return or destruction has been completed, will deliver to Company the identification of any PHI for which return or destruction is infeasible and, for that PHI, will certify that it will only Use or disclose such PHI for those purposes that make return or destruction infeasible.
	2.		Continuing Privacy and Security Obligation. Business Associate’s obligation to protect the privacy and security of the PHI it created or received for or from Company will be continuous and survive termination, cancellation, expiration or other conclusion of this Agreement, so long as the data is maintained.

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F.

General Provisions.

1.

Definitions. The capitalized terms in this Agreement have the meanings set out in 45 C.F.R. Parts 160-164, as it may be amended from time to time. As of the execution date of this Agreement, the following are some of the relevant definitions set out in the Code of Federal Regulations.

	a.		Disclosure means the release, transfer, provision of, access to, or divulging in any other manner of information outside the entity holding the information.
	b.		Electronic Media means (1) Electronic storage media including memory devices in computers (hard drives) and any removable/transportable digital memory medium, such as magnetic tape or disk, optical disk, or digital memory card; or (2) Transmission media used to exchange information already in electronic storage media. Transmission media include, for example, the internet (wide-open), extranet (using internet technology to link a business with information accessible only to collaborating parties), leased lines, dial-up lines. Private networks and the physical movement of removable/transportable electronic storage media. Certain transmissions, including of paper, via facsimile, and of voice, via telephone, are not considered transmissions via electronic media, because the information being exchanged did not exist in electronic form before the transmission.
	c.		Individual means the person who is the subject of Protected Health Information.
	d.		Individually Identifiable Health Information means information that is a subset of Protected Health Information, including demographic information collected from an Individual; and

	(i)		is created or received by a Health Care Provider, Health Plan, Employer, or Health Care Clearinghouse; and
	(ii)		relates to the past, present or future physical or mental health condition of an Individual; the provision of Health Care to an Individual; or the past, present, or future payment for the provision of Health Care to an Individual; and

	a)		that identifies the Individual; or
	b)		with respect to which there is a reasonable basis to believe the information can be used to identify the Individual.

	e.		Protected Health Information (“PHI”) means any information without regard to its form or medium, gathered by Business Associate in connection with Business Associate’s relationship with Covered Entity that identifies an individual or that otherwise would be defined as Protected Health Information under HIPAA.
	f.		Security Incident means an attempted or successful unauthorized access, use, disclosure, modification or destruction of information or interference with system operations in an information system, involving Protected Health Information that is

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created, received maintained or transmitted by or on behalf of Company in electronic form.

g.

Use means, with respect to Individually Identifiable Health Information, the sharing, employment, application, utilization, examination, or analysis of such information with an entity that maintains such information.

	2.		Amendment. From time to time local, state or federal legislative bodies, boards, departments or agencies may enact or issue laws, rules, or regulations pertinent this Agreement. In such event, Business Associate agrees to immediately abide by all said pertinent laws, rules, or regulations and to cooperate with Company to carry out any responsibilities placed upon Company or Business Associate by said laws, rules, or regulations.
	3.		Conflicts. The terms and conditions of this Agreement will override and control any conflicting term or condition of any other agreement between the parties with respect to the subject matter herein. All non-conflicting terms and conditions of the said other agreement(s) remain in full force and effect.
	4.		Owner of PHI. Company is the exclusive owner of PHI generated or used under the terms of the Agreement.
	5.		Disclosure of De-identified Data. The process of converting PHI to De-identified Data (DID) is set forth in 45 C.F.R Part 164.514. In the event that Company provides Business Associate with DID, Business Associate shall not be given access to, nor shall Business Associate attempt to develop on its own, any keys or codes that can be used to re-identify the data. Business Associate shall only use DID as directed by Company.
	6.		Assignment/Subcontract. Company shall have the right to review and approve any proposed assignment or subcontracting of Business Associate’s duties and responsibilities arising under the Agreement, subject to the provisions of Section 16.6 of the Agreement, as it relates to the Use or creation of PHI (or DID if applicable).
	7.		Audit. Company shall have the right to audit and monitor all applicable activities and records of Business Associate to determine Business Associate’s compliance with the requirements relating to the creation or Use of PHI (and DID, if applicable) as it relates to the privacy and security sections of this Agreement.
	8.		Intent. The parties agree that there are no intended third party beneficiaries under this Agreement.
	9.		Indemnity. Business Associate will indemnify and hold harmless Company and any Company affiliate, officer, director, employee or agent from and against any claim, cause of action, liability, damage, cost or expense, including attorneys’ fees and court or proceeding costs, arising out of or in connection with any non-permitted or prohibited

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Use or Disclosure of PHI or other breach of this Agreement by Business Associate or any subcontractor, agent, person or entity under Business Associate’s control.

	a)		Right to Tender or Undertake Defense. If Company is named a party in any judicial, administrative or other proceeding arising out of or in connection with any non-permitted or prohibited Use or Disclosure of PHI or other breach of this Agreement by Business Associate or any subcontractor, agent, person or entity under Business Associate’s control, Company will have the option at any time either (i) to tender its defense to Business Associate, in which case Business Associate will provide qualified attorneys, consultants and other appropriate professionals to represent Company’s interests at Business Associate’s expense, or (ii) undertake its own defense, choosing the attorneys, consultants and other appropriate professionals to represent its interests, in which case Business Associate will be responsible for and pay the reasonable fees and expenses of such attorneys, consultants and other professionals.
	b)		Right to Control Resolution. Company will have the sole right and discretion to settle, compromise or otherwise resolve any and all claims, causes of actions, liabilities or damages against it, notwithstanding that Company may have tendered its defense to Business Associate. Any such resolution will not relieve Business Associate of its obligation to indemnify Company under Section F(9) of this Agreement.

IN WITNESS WHEREOF, Company and Business Associate execute this Agreement in multiple originals to be effective on the date written above:

WELLPOINT, INC.
On behalf of itself and its Designated Affiliates,

By:                                                             
Print Name:
Title:
Date:

EXPRESS SCRIPTS, INC. (Business Associate)

By:                                                             
Print Name:
Title:
Date:

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EXHIBIT F

LIST OF SPECIALTY DRUGS

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Execution Version

EXHIBIT G

DELEGATED SERVICES AND OVERSIGHT REQUIREMENTS

This document specifies the functions that have been delegated to PBM by WellPoint, the services that PBM will provide for WellPoint and requirements for both parties in the oversight process for the functions that have been delegated. Throughout this Exhibit G and Schedules G-1 and G-2, Delegate refers to PBM. This Exhibit G and Schedules G-1 and G-2 are in incorporated into the Agreement as follows:

1.

Delegated Functions

1.1

Delegated Functions. WellPoint hereby delegates the responsibility for delegated activities, as set forth in Schedule G-1 to this Exhibit and as further clarified in the Delegation Inventory Document. (“Delegated Functions”). Delegate shall perform such Delegated Functions for WellPoint’s affiliates as designated in Exhibit G. Delegate agrees to abide by the WellPoint Delegation Oversight and Operations Documents (hereinafter “Delegation Documents”) and coordinate with the appropriate WellPoint committee or leadership to strengthen Delegate’s performance of its Delegated Functions. The Delegation Inventory Document (DID) is a working collaborative document between the parties and may be updated by the parties from time to time and is not subject to the Amendment provisions of this Agreement.

2.

Programs, Polices and Procedures

2.1

Establishing Programs, Policies and Procedures. Delegate shall establish policies and procedures for implementing WellPoint’s prior authorization/drug utilization program (“Program”) for the delegated activities set forth in Schedule G-1. Such Program shall be consistent with WellPoint’s programs, policies and procedures. Delegate warrants that all Delegated Functions shall be performed in accordance with such Program. Delegate shall provide a copy of its Program to WellPoint. Delegate shall annually review its Program and shall give WellPoint at least thirty (30) days prior written notice of any material revisions. If such revisions are unacceptable to WellPoint, PBM will be given the opportunity to cure the noncompliance in accordance with Section 4.2 (delegation Oversight) of this Attachment. If the parties are unable to resolve the issue within the timeframes set forth in section 4.2 (Delegation Oversight) of this Exhibit, WellPoint may terminate this Attachment and/or delegation of the Delegated Functions immediately. PBM will develop standard drug utilization policies, utilization management criteria, and formularies consistent with CMS rules and regulations, supplemented and informed by CMS approved compendia. Where WellPoint establishes criteria for drug utilization and utilization management, and formularies, the reasonableness, medical necessity and CMS compliance of the established criteria will be the sole responsibility of WellPoint.

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2.2

Modification of Programs, Policy and Procedures. The parties acknowledge that the Program is subject to modification from time to time in order to meet WellPoint’s standards for said Program or to meet an external accreditation agency’s or association’s standards, such as National Committee on Quality Assurance (“NCQA”), Centers for Medicare & Medicaid Services (“CMS”), URAC (“URAC”), or Consortium Health Plans (“CHP”), or to meet legislative requirements. Either party may initiate an amendment for such purposes, and the other party shall not unreasonably withhold acceptance of such amendment.

3.

Reporting/Notification Requirements

	3.1		Reporting Requirements. In addition to the reporting requirements set forth in the Agreement Delegate shall comply with WellPoint’s reporting requirements in WellPoint’s Delegation Documents. Delegate shall complete and submit all applicable reports related to the Delegated Functions set forth In Schedule G-1.
	3.2		Agency Reviews. From time to time associations or agencies such as state regulators, URAC, CMS, NCQA, or CHP, may review and evaluate WellPoint’s delegation procedures for its Delegated Functions. When applicable, WellPoint shall make best efforts to provide PBM sixty (60) days prior notice of such reviews. To assist WellPoint with such review, Delegate shall, within one (1) business day of WellPoint’s request, provide information to WellPoint needed for the agency’s review. During such agency review, Delegate shall make a member of its staff available to assist WellPoint and/or the agency with such review.
	3.3		New Requirements. When WellPoint receives notification of new legislation or accreditation requirement, WellPoint will notify the Delegate. Within thirty (30) days of receipt of the notification, Delegate shall provide WellPoint with an action plan describing how Delegate will comply with the new requirement and shall implement such action plan.
	3.4		Priority Reporting. Delegate shall report incidents or situations that may give rise to liability attributable to WellPoint.

4.

Oversight

4.1

Annual Oversight. At least annually, but as needed, WellPoint shall visit Delegate to conduct an evaluation of its Delegated Functions and programs, policies and procedures. WellPoint shall use best efforts to provide PBM sixty (60) days prior notice of such visit. Delegate shall assist WellPoint and/or its designee with conducting the evaluation. Within thirty (30) days of the completion of the evaluation, WellPoint shall provide a written report to Delegate assessing Delegate’s performance. In the event the evaluation indicates a need for Delegate to revise or improve one or more of its Programs, Delegate shall develop a corrective action plan and submit such plan to WellPoint. Such corrective action plan shall be submitted to WellPoint within thirty (30) days of receiving

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notice regarding the need to submit a plan. Within six (6) months from WellPoint’s receipt of Delegate’s corrective action plan, WellPoint shall provide a follow-up report or schedule a follow-up on-site review to assess the effectiveness of Delegate’s corrective action plan.

	4.2		Delegation Oversight. In the event WellPoint and/or its designee determines that Delegate’s performance of one or more of the Delegated Functions fails to comply with WellPoint’s standards or an external accrediting agency’s or association’s standards, such as NCQA, or Delegate fails to comply with the aforementioned evaluations and/or fails to submit or implement an appropriate corrective action plan, as specified above, WellPoint shall give Delegate a detailed notice of such noncompliance(s). Delegate shall have thirty (30) days from receipt of such notice to cure the noncompliance(s). During such time, WellPoint and/or its designee shall use its best efforts to work with Delegate to correct such noncompliance issue(s).
	4.3		Oversight Tools. The oversight tools utilized by WellPoint to perform the review and the list of documents and/or information that WellPoint will review during such evaluations are available to the Delegate upon request.
	4.4		Delegate’s Committees. A WellPoint representative may attend Delegate’s Committee meetings relevant to Delegate’s Delegated Functions, if such committee exists.

5.

Revocation of Delegation

5.1

Revocation. WellPoint may revoke one or more of the Delegated Functions set forth in Schedule G-1 to this Exhibit in the event WellPoint determines that Delegate fails to comply with WellPoint’s standards and/or an external accrediting agency’s or association’s standards, such as CMS or NCQA, regarding the Delegated Function(s), and Delegate has failed to cure the noncompliance(s), as specified above.

6.

Sub-Delegation.

6.1

Notification of Sub-delegation. Prior to sub-delegation, Delegate is to inform WellPoint of any potential sub-delegated activity. Delegate shall not sub-delegate any Delegated Function without WellPoint’s prior written consent. WellPoint reserves the right to perform a pre-assessment of any potential sub-delegate prior to authorizing the sub-delegation. If the sub-delegate is authorized by WellPoint, Delegate remains accountable for the particular function to be carried out properly and shall insure that sub-delegate complies with the terms of this Exhibit. Sub-delegate is subject to the agreement between the Delegate and WellPoint and in accordance with NCQA, URAC and regulatory requirements.

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	6.2		Oversight of Sub-delegate. WellPoint shall review, at a minimum, documentation of Delegate’s oversight of the Sub-Delegate’s activities to ensure that WellPoint’s oversight process is being followed and that all WellPoint’s standards are met or exceeded. WellPoint may reserve the right to perform oversight of Sub-Delegate’s activities and has the right at any time to request the termination of the sub-delegation. Delegate shall prepare an annual on-site assessment report for the Sub-Delegate. The report shall include an assessment of the Sub-Delegate’s performance of the delegated activities. Such report shall be submitted to WellPoint and/or its designee on an annual basis, at the time of the anniversary date of the Agreement, and shall be reviewed by WellPoint.
	6.3		Written Agreement with Sub-delegate. Upon approval by WellPoint of the sub-delegation, Delegate shall enter into a written contract with the Sub-Delegate, obligating Sub-Delegate to the terms and conditions of the Agreement and any Attachments or Exhibits thereto and shall provide a copy of such contract, upon request. It is understood that Delegate may contract with Sub-Delegate for purposes outside the scope of this Agreement.

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SCHEDULE G-1
DELEGATED FUNCTIONS

The Delegated Functions that Delegate will perform and the specific activities for each are attached hereto as Schedule G-1.

UTILIZATION MANAGEMENT

UM Structure		WellPoint approves PBM’s UM program and plan annually. The plan meets all compliance standards stipulated by WellPoint.
		PBM will adhere to the clinical staff oversight requirements. (*Listed under URAC core 19, 20, and 24)
		PBM agrees to designate a senior clinical lead (physician or pharmacist) with substantial involvement in UM program development and oversight.
		PBM agrees to define organization structure and provide WellPoint timely notice of any significant change in key utilization management personnel, including without limitation, the Medical Director/Pharmacist or Director of Utilization Management.
Clinical Criteria		The PBM is not delegated management of clinical criteria. WellPoint retains the development/maintenance or adoption of clinical criteria and application policies for the UM program. PBM agrees to support development and utilize WellPoint criteria and policies.
		PBM will evaluate their Level 1 (advocates) quality and consistency in applying criteria quarterly. Reporting will occur at least annually.
		PBM will evaluate their Physician/Pharmacist Reviewers’ quality and consistency in applying clinical criteria at least annually.
		PBM will report Physician/Pharmacist Reviewer quality and consistency to WellPoint.
		PBM’s policies and procedures address this process. Policies and procedures will be reviewed annually for compliance with standards stipulated by WellPoint.
Communication Services		WellPoint and PBM collaborate on the Communication Standards in the shared Utilization Management process.
		PBM will be responsible for ensuring their UM reviewers are accessible by phone to ordering providers and WellPoint UM staff.
		PBM’s policy and procedures support this process.
		WellPoint reviews PBM’s Policies and procedures annually for

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		compliance with standards stipulated by WellPoint.
Appropriate Professionals		WellPoint and PBM collaborate on the Appropriate Professional Standards in the shared Utilization Management process.
		PBM will be responsible for ensuring the appropriate clinical personnel perform the initial prior authorization in accordance to NCQA, URAC, and state regulations
		PBM’s policy and procedures support this process.
		WellPoint reviews PBM’s Policies and procedures annually for compliance with standards stipulated by WellPoint.
		A sampling of associate, consultant and UM files will be audited annually
Timeliness of UM Decisions		WellPoint and PBM will collaborate on the Timeliness of UM Decisions Standards in the shared Utilization Management process.
		PBM will be responsible for ensuring that their UM associates support the turnaround times as described in Schedule G-2 Notification Requirements.
		PBM complies with State and Federal laws and accrediting entity’s timeliness requirements.
		PBM’s policy and procedures address this process.
		WellPoint reviews PBM’s Policies and procedures annually for compliance with standards stipulated by WellPoint.
		A sampling of MD authorization files will be audited annually.
Clinical Information		WellPoint and PBM collaborate on the Clinical Information needed for UM Decisions in the shared Utilization Management process.
		PBM clinical personnel will only collect additional info necessary for making appropriate medical necessity authorization determinations or redirection. (Note:
		Educated decision-making will be utilized to process pharmaceutical requests. Such informed decisions will be made using WellPoint Clinical Criteria, or when WellPoint Clinical Criteria is not available for a particular review, evidence-based standards of medical practice involving individual consideration.)
		PBM’s policy and procedures address this process.
		WellPoint reviews PBM’s Policies and procedures annually for compliance with standards stipulated by WellPoint.
		A sampling of MD/Pharmacist authorization files will be audited annually.

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Denial Notices		PBM shall not have the responsibility to make UM denials. WellPoint retains responsibility for making UM decisions.
Policies for Appeals		PBM is not delegated WellPoint appeals or grievances related to UM decisions. WellPoint retains responsibility for appeals and grievances.
Appropriate Appeals Handling		PBM is not delegated WellPoint appeals or grievances related to UM decisions. WellPoint retains responsibility for appeals and grievances.
Evaluation of New Technology		PBM is not delegated evaluation of new technology. WellPoint retains the evaluation of new and the new application of existing technology.
		WellPoint will notify delegate of revisions and updates to UM criteria and procedures allowing agreed upon time for implementation.
Satisfaction with the UM Process		PBM will administer a provider satisfaction survey to Participating Providers as set forth in the Agreement, measuring provider satisfaction with the PBM’s physician review UM process.
		PBM is not delegated evaluation of member and provider satisfaction with WellPoint’s UM Process.
		WellPoint retains responsibility for evaluation of satisfaction with UM Process.
Emergency Services		PBM is not delegated management of Emergency Services. WellPoint retains responsibility for management of Emergency Services.
Pharmaceutical Management Process		WellPoint and PBM will work collaboratively in developing the Pharmaceutical Management Process. PBM agrees to support or development of these programs.
		PBM’s policies and procedures address this process.
		Policies and procedures will be reviewed annually for compliance with standards stipulated by WellPoint.
Ensuring Appropriate Utilization		PBM is not delegated monitoring of appropriate Utilization.
		WellPoint retains responsibility for ensuring appropriate utilization. WellPoint may seek PBM’s input & feedback on appropriate goals, benchmarks, interventions and outcomes related to utilization of pharmacy service
		PBM shall not specifically reward practitioners or other individuals

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		conducting utilization review.
		WellPoint reviews PBM’s Policies and procedures annually for compliance with standards stipulated by WellPoint.
Behavioral Health Care Triage & Referral		PBM is not delegated Behavioral Health Care Triage & Referral management.
		WellPoint retains responsibility for Behavioral Health Care Triage & Referral management
UM Delegation		PBM must gain WellPoint’s approval before they would contract to sub-delegate UM activities. If sub-delegation occurs, WellPoint reserves the right to audit the sub-delegate, if needed.
		WellPoint reviews PBM’s Policies and procedures annually for compliance with standards stipulated by WellPoint as part of the delegation oversight process.
Compliance with State & Federal Mandates		PBM will comply with existing state (as noted by WellPoint) and federal mandates (including CMS-Medicare Advantage requirements).
		PBM will comply with future state and federal mandates within a reasonable timeframe.
		WellPoint reviews PBM’s Policies and procedures annually for compliance with standards stipulated by WellPoint.
		A sampling of MD/Pharmacist authorization files will be audited annually.

MEMBER RIGHTS & INFORMATION

Member Complaints		PBM is responsible for resolving member complaints about pharmacy service in a manner specified by WellPoint.
		Delegate shall immediately forward to WellPoint all Department of Insurance complaints related to utilization management and shall, upon request, respond to such complaints, or provide all information necessary for WellPoint to respond to Department of Insurance complaints.
		PBM is not delegated WellPoint appeals or grievances. WellPoint retains the responsibility for appeals and grievances.
		WellPoint reviews PBM’s Policies and procedures annually for

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MEMBER RIGHTS & INFORMATION

		compliance with standards stipulated by WellPoint.
		A sampling of WellPoint complaint files will be audited annually.

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PBM will perform pharmacy reviews in accordance with the following turnaround times:

Type of Review		PBM Case Turnaround Timeframe2
Prospective Urgent		Taking into consideration the medical urgency of the situation, PBM will complete its review and return the case to WellPoint ASAP, but no greater than eight (8) hours from receipt of case.
Prospective Non-Urgent		PBM will complete its review and return the case to WellPoint within one (1) business day from receipt of case.
Concurrent Urgent		To the extent PBM performs this type of pharmacy review, taking into consideration the medical urgency of the situation, PBM will complete its review and return the case to WellPoint ASAP, but no greater than eight (8) hours from receipt of case.
Concurrent Non-Urgent		To the extent PBM performs this type of pharmacy review, PBM will complete its review and return the case to WellPoint within one (1) business day from receipt of case.
Retrospective (pre-claim)		Except for IN, CT, ME, and NH membership: PBM will complete its review and return the case to WellPoint within ten (10) calendar days from receipt of case. IN, CT, ME, and NH membership only: PBM will complete its review and return the case to WellPoint within one (1) business day from receipt of case.