User Instructions for AmerisourceBergen Corporation

State of California
Contract Notification
****MANDATORY****

AmerisourceBergen Drug Corporation (AMERISOURCEBERGEN)

CONTRACT NUMBER: 1S-05-65-50

DESCRIPTION: Prime Vendor for the Distribution of Contracted1 and Non-contracted2 Pharmaceuticals

CONTRACT TERM: 11/30/2005 through 11/29/2007

DISTRIBUTION LIST: Posted Electronically on DGS/PD/CONTRACT Internet Web Page

¹ "Contracted" is defined as contracted between State of California DGS Pharmaceutical Team and pharmaceutical manufacturers or Governmental Purchasing Organizations (GPOs).

² "Noncontracted" refers to pharmaceutical drugs which are not provided through contract with manufacturers or GPO but are provided through AmerisourceBergen Drug Company, on this contract.

1. SCOPE

The State of California awarded a statewide contract to a wholesaler/distributor to act as the State's Prime Vendor for pharmaceutical distribution. The contract term is for two (2) years. The State has the unilateral option of extending this contract for two (2) additional one-year periods at the same prices.

This Contract's key benefits are that it:

1. Streamlines and Expedites Pharmaceutical Orders
   
   
   • Each State and Local Agency Pharmacy will receive access to current ( Echo™) technology to place electronic orders, which will reduce the amount of time in processing orders. Agencies are advised that only Echo™ technology meets the contract's ordering and reporting requirements.
     
   • Each State and Local Agency Pharmacy will receive daily deliveries, Monday through Saturday and up to two extra emergency deliveries per month at no additional charge.
   
   
2. Increases the ability to track receipt and inventory of pharmaceuticals
   
   
   • Each Pharmacy can receive a wireless handheld Palm-based bar code scanning system, iScan, that can be used to track receipt and inventory of pharmaceuticals.
     
   • Initial and annual inventory will be taken for each Pharmacy by AmerisourceBergen.
   
   
3. Provides a standardized process to remove outdated inventory
   
   
   • Creates a standardized process to remove outdated inventory.
   
   
4. Improves contract management efficiency and effectiveness
   
   
   • Improves tracking of rebates - AmerisourceBergen will collect all rebate payments and monthly submit a remittance or order credit to each agency account for the earned rebates.
     
   • Improves data quality and future negotiating power - monthly and quarterly reporting will provide consolidated data on state agency spending patterns, management visibility of savings and contract compliance.
5. Delivers significantly lower prices, for brand and generic drugs and continued high quality
   • Continuing competition and even lower prices - with more accurate usage data the State can tailor future contracts to target even lower prices, rebates, and administrative cost.

2. CONTRACT USAGE/RULES

1. This contract is available for use by all State of California department and local agencies that meet requirements for pharmaceutical distribution.

   A Local Agency is a city, county, city and county, district, or other local governmental body or corporation, including the California State Universities (CSU) and University of California (UC) systems, K-12 schools and community colleges, empowered to expend public funds (Public Contract Code 10298). Local governmental agencies shall have the same rights and privileges as the State under the terms of this contract. Any local agency desiring to participate shall be required to submit to the same requirements as do State agencies and have no authority to amend, modify or change any condition of this contract. Authorization to permit a local governmental agency to participate in this contract shall come through the State's Contract Manager.
   

2. Prior to placing orders against this contract, State departments must have been granted purchasing authority by DGS/PD for the use of the State's statewide contracts. The department's current purchasing authority number and contract #1S-05-65050 must be entered in the appropriate location on each purchase document. Departments that have not been granted purchasing authority by DGS/PD for the use of the State's contracts may access the Purchasing Authority Application at /deleg/pamanual.htm (see Chapters 1 and 13) or may contact DGS/PD's Purchasing Authority Management Section by e-mail at pams@dgs.ca.gov
   
3. State of California Departments and Local Agencies shall acquire, keep and maintain:
   
   
   • DEA registration and
     
   • License (as clinic or pharmacy) by either the State Board of Pharmacy or license as a health care provider by The Dept. of Public Health.
   
   
4. Ordering State departments must adhere to all applicable state laws, regulations, policies, best practices, and purchasing authority requirements, e.g. California Codes, Code of Regulations, State Administrative Manual, Management Memos, and Purchasing Authority Manual.
   
5. Purchases for service and equipment outside the contract must have an approved exemption pursuant to Management Memo 05-11. Please refer to the link below for additional information on the exemption process. State contracts Departments seeking an exemption must justify their requests. Departments must first conduct a thorough analysis of whether goods and services available through the CSSI contract can meet their needs. They must then complete the "Justification for Purchasing Outside the CSSI State Contract" form. The form must be approved and signed by:
   
   
   • The Procurement and Contracting Officer of the requesting department.
     
   • The Director of the requesting department. Both signatures are required. After the approvals have been obtained, the State's form must be stored with the Purchase Order file documentation and a copy must be sent to the State's Contract Manager for this contract.
   
   
6. Local governmental agency use of this contract is optional. While the State makes this contract available to local governmental agencies, each local governmental agency should determine whether this contract is consistent with its procurement policies and regulations. Parts B, D and E of the above requirements and restrictions are not applicable to local government entities. State Departments and Local Agencies are required to have a DGS billing code in order to use this contract. DGS billing codes may be obtained by contacting the DGS Billing contact and providing the following: State Department or Local Government Agency Name, and the following contact information: Name, Telephone Number, Mailing Address, Facsimile Number and E-Mail Address of Contact Person. The DGS Billing Contact is Marilyn Ebert at  marilyn.ebert@dgs.ca.gov

3. ADMINISTRATIVE FEE/BILLING

AmerisourceBergen does not charge an administrative fee. The Department of General Services (DGS) directly bills each State department and local agency an administrative fee for use of statewide contracts. (You may click on "DGS Price Book" at http://smf00miis041/www.dgs.ca.gov/publications for current fees.) Additionally, State departments will be billed for a 10.5% fee to DGS' consultant for savings realized with strategically sourced contracts. The calculation for this fee will be 10.5% of the difference between the baseline and the purchase order total (less any fees, delivery charges, and taxes). The Department of General Services will invoice separately for this fee. These DGS administrative fees are not included in the purchase order, are not invoiced by AmerisourceBergen, and are not to be remitted by the department or local agency before invoices are received. A copy of all State Department and local agency purchase orders, clearly showing the DGS billing code, must be sent as follows:

By IMS to:
Z-1
DGS - Procurement Division
Attention: Data Entry Unit - Second Floor
707 Third Street, Second Floor North
West Sacramento, CA 95798-9052

By Mail to:
Department of General Services
Procurement Division
Data Entry Unit - Second Floor North
P.O. Box 989052
West Sacramento, CA 95798-9052

Hand-Delivered to:
DGS/Procurement Division
Data Entry Unit
707 Third Street, Second Floor North
West Sacramento, CA 95605

For inquiries regarding billing codes, local agencies should contact the State Contract Manager (see CONTRACT MANAGEMENT below).

It is very important for departments and local agencies to promptly forward copies of any purchase order amendments to the above address to allow for adjustments to the administrative and/or savings fees.

4. CONTRACT MANAGEMENT

Both the State and AmerisourceBergen have assigned contract managers as the single points of contact for problem resolution and related contract issues.

State Contract Manager: Loretta Maddux
DGS/Procurement Division
Telephone: (916) 375-4926
Facsimile: (916) 375-4613
E-Mail: loretta.maddux@dgs.ca.gov

AmerisourceBergen Drug Corp: Scott George
Telephone: (916) 251-6400
Facsimile: (714)704-7204
E-Mail: sgeorge@amerisourcebergen.com
Website: http://www.amerisourcebergen.com

5. PURCHASE ORDER EXECUTION

1. State departments shall use a Purchasing Authority Purchase Order (Std. 65) or one of AmerisourceBergen's order methods specified in Part 6 (below). Local governments shall (in lieu of the State's Purchase Order Std. 65) use their own purchase order document. An electronic version of the Std.65 is available at the Office of State Publishing web site: http://www.dgs.ca.gov/osp (select Standard Forms).
   
   

   The Agency Billing Code and Purchasing Authority Number must be included on all purchase documents. Please contact your department's fiscal agent to obtain billing code information. Prior to placing an order, State departments must obtain, from the on-line catalog or a hard copy, the contract cover page, all applicable amendments, and a copy of the contract terms and conditions. It is not necessary to provide this documentation to DGS when submitting a copy of the Std. 65. Additionally, it is not the contractor's responsibility to provide this documentation.

6. ORDERING METHODS

All State facilities and local agencies will have access to AmerisourceBergen's order entry system methods 24 hours/day, 7 days/week. The equipment hardware and software system options listed below are provided by the vendor at no charge for the contract's duration (Refer to Part 7). Orders can be placed by the following methods:

1. ECHO: AmerisourceBergen's Windows-based desktop ordering system allows order placement with complete flexibility.
   
   
   • Compatible with Broadband & Dialup.
     
   • 250 + Reports
     
   • Possess modules for Inventory, Receiving, & Invoice creator.
     
   • Compatible with Portable systems.
     
   • Features off-contract highlight
     
   • One-step Generic, Therapeutic & Contract equivalent searches.
     
   • Review for lower cost alternatives prior to placing orders.
     
   • Catalog of both stocked and non-stocked items.
     
   • Display of current quantities stocked at DC prior to ordering.
     
   • Complete item details include status codes.
     
   • Immediate allocation of ordered quantity.
     
   • Instant order confirmations.
     
   • Purchase history for each item.
   
   
2. iScan™ (wireless palm unit): Allows you to manage your purchase orders and physical inventory records by using a hand-held scanner.
   
   
   • Interfaces with all of AmerisourceBergen's ordering systems or directly with your AmerisourceBergen distribution center.
     
   • iScan™ provides precise ordering and receiving and optimizes the State's supply chain by providing efficiencies in accuracy and productivity.
   
   
3. Telephone: TOrders may be placed by telephone with AmerisourceBergen Tbetween the hours of 7:00 a.m. to 7:00 p.m. (PST/PDT) Monday through Saturday. Contact telephone numbers are listed in the Attachment entitled "AmerisourceBergen Contact Information."
   
4. Facsimile: T Orders may be faxed to AmerisourceBergen Tbetween the hours of 7:00 a.m. to 7:00 p.m. (PST/PDT) Monday through Saturday. Contact Facsimile numbers are listed in the "Attachment entitled "AmerisourceBergen Contact Information."

7. ACCOUNT NUMBERS

AmerisourceBergen shall issue unique account numbers to every State Department and Local Agency using this contract.

8. ORDERING EQUIPMENT

1. AmerisourceBergen, shall make available, at no cost, a computer system with AmerisourceBergen system software, modem and printer that will enable the pharmacies to place electronic orders, review AmerisourceBergen's inventory, receive order confirmations and create reports particular to the needs of the user. The systems shall be able to store at least 24 months of purchase history for the using agency.
   
2. All ordering methods will allow for the input of individual purchase order numbers for each order submitted.
   
3. In the event, any electronic ordering system becomes non-functional, a replacement unit will be put in place within 24 hours of notification.
   
4. AmerisourceBergen will provide all system upgrades and necessary hardware and software at no charge. Any telephone line requirements will be provided by the State at its expense. Title to hardware shall remain with AmerisourceBergen. Items must be returned at the end of the Agreement.
   
5. For ordering software that AmerisourceBergen allows the State to use ("Software"), the State may not make, or allow others to make or use, copies and may not modify or distribute Software or create derivative works or may not translate, reverse engineer, disassemble or decompile Software. Software will perform substantially in accordance with its documentation if operated as directed or, if it does not, the remedy will be that AmerisourceBergen will, at its option, repair or replace Software so it performs substantially in accordance with its documentation; advise the State how to achieve substantially the same functionality using different procedures, or replace defective media that is returned.
6. The ordering system will have the ability to generate purchase orders with, at a minimum, the following information:
   
   
   • Account Number
     
   • Account Name
     
   • Purchase Order Number
     
   • Purchase Order Date
     
   • Purchase Order Status
     
   • Total Order Amount
     
   • Total Number of Lines
     
   • Ship to Address
     
   • AmerisourceBergen's Item Identification Number
     
   • Line Item Number
     
   • Line Item NDC Number
     
   • Line Item Description
     
   • Line Item Unit of Measure
     
   • Line Item Order Quantity
     
   • Line Item Filled Quantity
     
   • Line Item Price
     
   • Line Item Price Indicator
     
   • Line Item Subtotal
   
   
7. AmerisourceBergen will provide setup, training and maintenance at no cost to the State.

9. SYSTEM/ORDERING INDICATORS

The AmerisourceBergen's ordering system shall have a "line item price indicators" identifying the source of the pricing for each pharmaceutical. The indicators will identify the pharmaceuticals as follows:

1. CAL - For State contracted drugs. These are pharmaceuticals that the State directly contracts with the manufacturer.
   
2. GPO - These are pharmaceuticals provided through contract between the State and a Governmental Purchasing Organization (GPO) that the State uses. The State's current GPO is Managed health Care Associates, Inc (MHA).
   
3. Items that do not have indicators are non-contract pharmaceuticals. These are pharmaceuticals that are not provided by state contract or contract with a GPO. Pricing will be at the contracted rate of this prime vendor contract.

   AGENCY NOTE: Amerisource's system transmits orders that have been kept "live" for more than two hours. Please cancel your order if you do not intend to transmit it.

10. EMERGENCY ORDERS

For emergencies during normal business hours (7:00 am - 5:00 pm PST) the State of California facility can call the servicing Customer Service Department for assistance. Contact telephone numbers are listed in the Attachment entitled "AmerisourceBergen Contact Information."

AmerisourceBergen will maintain a toll-free number for emergency orders. This number shall be available and monitored on a 24/7 basis. Contact telephone numbers are listed in the Attachment entitled "AmerisourceBergen Contact Information."

AmerisourceBergen provides emergency delivery service 24 hours per day, 7 days per week. Each facility is furnished with the emergency services pager and/or cell phone number for its servicing distribution center. In addition, detailed instructions are provided for using this service in the event of a true medical emergency. When a facility experiences a medical emergency, they simply dial the pager or cell phone number and follow the instructions to ensure follow up. The assigned AmerisourceBergen associate will respond to the page/call within 30 minutes, identify and authenticate the State of California facility, record the need, and provide an estimated delivery time for the product. The associate will then drive to the servicing distribution center, fill the order, and arrange for delivery of the order.

11. ORDER ACKNOWLEDGEMENT/CONFIRMATION

Amerisource's desktop ordering system tracks and displays orders, checks stock on complete purchase orders and confirms the item shipment within minutes of order transmission. It also indicates items on backorder and displays real time alternatives.

12. CUSTOMER SERVICE

For non-emergency inquiries, AmerisourceBergen's customer service unit shall respond to user inquiries within two (2) hours of the inquiry.

Refer to Point 9 for Emergency Order Instructions.

AmerisourceBergen's average response time (answer time) during normal business hours is under 35 seconds. In addition, each State of California facility will be furnished with an emergency pager number that is monitored 24 hours/day, 7 days/week to assist in meeting the response requirement.

13. TRAINING

AmerisourceBergen shall make quarterly visits to all ordering facilities to provide training and general customer service follow-up. AmerisourceBergen will provide a wide variety of on-going training methods including on-site and off-site training, Internet tutorials, and User Groups on various AmerisourceBergen desktop programs, software applications, and Web pharmacy order entry system. Training services are highlighted below:

1. Desktop Products: Desktop training is provided on-site in person at no charge.
   
2. Web Products: Web-based training is available on the AmerisourceBergen Customer Portal - My Applications Page - www.amerisourcebergen.com, and phone training is another viable solution for creating Ad-Hoc reporting for the Web-based product.
   
3. A detailed memo along with a "What's New" guide is provided for all enhancements for both major and minor enhancements. If an agency determines that enhancements require training, AmerisourceBergen will deploy a training team.
   
4. AmerisourceBergen has regional Help Desks to directly support their systems. The Regional Support groups have responsibility for all customer desktop and Web-based applications, system documentation, training and hardware/software support. Although the support hours vary slightly by region, all provide "live" support through at least 6:30 p.m. local time.
   
5. On call support is available during evening and weekend hours. Contact telephone numbers are listed in the Attachment entitled "AmerisourceBergen Contact Information."

14. CONTRACT PRICING A.

1. Contract drugs will be sold at contract price. No Administrative fee to vendor will be applicable.
   
2. The contract's pricing indices, Wholesale Acquisition Cost (WAC) and GPO (Governmental Purchasing Organization) may change without notice. The discounts listed in the Amerisource Price List will not change.
   
3. Drugs listed on the worksheet entitled "NonContract Price by Name" on the "Amerisource Price Sheet" will
   be sold at the lower price of either indices listed below:
   
   • Listed discount from Wholesale Acquisition Cost (WAC), or at
     
   • The pricing of the State's Governmental Purchasing Organization (The GPO is currently MHA).
   
   
4. Drugs made by manufacturers listed on the worksheets entitled "Generic Manufacturer Discounts" and "Brand Name Manufacturer Discounts" will be provided at the listed discount from Wholesale Acquisition Cost.
   
5. Non-contract drugs will be provided at the lower price of either indices listed below:
   
   
   1. At or Below Wholesale Acquisition Cost
      
   2. The pricing of the State's Governmental Purchasing Organization F. A Prompt Payment Discount of 2.5% of the total invoice will apply when invoices are paid within 20 days; Payment Terms are 2.5%20, Net 45.
   
   
6. Volume Discount Bonus of .05%, .10%, and .15% when the State achieves quarterly spend totals of 10% over baseline ($55MM), 15% over baseline ($57.5MM), or 20% over baseline ($60MM) respectively; and,
   
7. Return Fees for Outdated Product, onsite pickups from 1-4 annually.
   
   
   • Destruction of Controlled Substances - $0.50/per pound.
     
   • Destruction of Non-Controlled Substances - 0.35/per pound.
     
   • Handling Fee of 7.9% percentage of the actual value of returned product

15. FOB DESTINATION

AmerisourceBergen must deliver all routine scheduled order shipments F.O.B. destination (freight prepaid) only. AmerisourceBergen will maintain title and assume all risk of loss or damage to the items furnished until receipt, inspection and acceptance of the shipment by the ordering facility. Signature of delivery receipt will not constitute final acceptance.

16. DELIVERY

Each State of California facility will receive one order per day, Monday - Saturday. Each facility will be allowed up to 2 emergency deliveries per month. If a facility exceeds its normal number of weekly deliveries, the cost to the facility will be $31 or the courier cost charged to AmerisourceBergen, per delivery. If a facility exceeds 2 emergency deliveries per month, the cost to the facility will be equal to the courier cost charged to AmerisourceBergen, per delivery.

AmerisourceBergen must notify the ordering agency within 12 hours if delivery cannot be made within the time specified in the contract.

AmerisourceBergen will be responsible for contacting the secure locations (such as California Department of Corrections institutions) for security clearance (number of days required for clearance varies), hours of operation for deliveries and service, dress code, and other rules of delivery. Lack of familiarity with the locations will not relieve AmerisourceBergen of their responsibilities to fulfill the contract requirements.

17. MINIMUM ORDER

This contract does not require a minimum order. However, as this contract provides bulk distribution of pharmaceuticals, there is a "minimum pick" of a National Drug Code unit size. This contract provides package sizes associated with an NDC unit of issue, not package sizes smaller than an NDC unit of issue.

18. REFUSAL TO ACCEPT ORDERS

AmerisourceBergen shall not refuse to accept orders from any State facility without authorization from the State Contracts Manager.

19. DELIVERY AND RETURN OF CONTROLLED SUBSTANCES

The State facility transmits the narcotic order through the Amerisource ordering system before sending their narcotic blank to ensure timely product delivery. The State Facility gives the completed DEA 222 form to AmerisourceBergen delivery driver, who brings it to the Amerisource distribution center for order fulfillment. Normal turn-around time for delivery of controlled substances is 24 hours. Controlled substance orders received by 5:00 pm local time Monday through Thursday will be delivered the next day after receipt of the DEA 222 form. DEA forms received by 5:00 pm local time on Friday are delivered on Monday. In the case of an emergency order, AmerisourceBergen will work within DEA guidelines to accommodate such requests.

Returns: All returns to ("AMERISOURCEBERGEN") must be transmitted via Electronic Order Entry, and will be processed in strict accordance with the Prescription Drug Marketing Act of 1987, as modified by the Prescription Drug Amendments of 1992, and the FDA Modernization Act of 1997, as well as all pertinent federal and state laws. As a policy, AMERISOURCEBERGEN does not accept Class II controlled substances for return. Credit will, however, be extended in the following situations: product shortages, product dating, product recalls, billing errors, filling errors, ordering errors, shipping errors and shipping damages.

Return of scheduled items (other that Schedule II and IIN) must be pre-approved by the servicing division. Scheduled drug returns must be packed separately from non-schedule returns and proper procedures followed to ensure compliance with current law, including CFR21. Schedule items returned in violation of this policy will not receive credit. Non-saleable controlled substances (Class II-V) may not be returned to Amerisource.

20. SPECIAL HANDLING/PACKAGING DOCUMENTATION

AmerisourceBergen must provide all legally required special handling/packaging documentation for transport of chemotherapeutic drugs and hazardous materials from AmerisourceBergen to the participating State facility.

22. RETURNED PRODUCTS POLICY

The following shall encompass the "Returned Products Policy":

1. All returns shall be picked up within seven (7) days of notification. Notification is defined as notice given verbally, in writing, by fax or e-mail or direct computer entry into AmerisourceBergen's order entry system.
   
2. No restocking charges will be imposed on deliveries of items that are "Wrong Product", "Ordered in Error" or "Short Dated." These products shall be picked up in seven (7) days.
   
3. For "Recall Items," pickup shall be within 30 days from the date of notification or as specified in the recall notice, which ever is shorter.
   
4. For items found to be defective, pickup shall be no later than seven (7) days from notification of noticed defect.

6. For damaged product, the pharmacy shall notify AmerisourceBergen by fax or phone of the damaged product. AmerisourceBergen shall pick up and replace within 24 hours at no charge.
   
7. For controlled substances that are refused on receipt of delivery, the pharmacist will notify AmerisourceBergen by fax or phone of the damaged product. Replacement will be within 24 hours.
   
8. All credits shall be issued within 30 days of return of products. The State reserves the right to deduct from invoices all credits not issued 60 days after the return of products unless such credits have been formally disputed by AmerisourceBergen.

23. RETURN OF UOUTDATED DRUGSU, SERVICE AND MANAGEMENT

AmerisourceBergen's service and management for return of outdated drugs include:

1. Retrieval accounting, packaging and crediting agency account with credits earned;
   
2. Removal, return or destruction of non-returnable, scheduled and non-scheduled outdated drugs located in the pharmacy and pharmacy packaging center in accordance with DEA, EPA and California State Board of Pharmacy requirements;
   
3. Transportation and shipping of outdated drugs;
   
4. Assurance that all non-returnable drugs are destroyed by a licensed facility
   
5. Provision of all necessary forms and Certificate of Destruction to the ordering facility;
   
6. Transportation and shipment of returnable product to the manufacturer for refund, credit or exchange of merchandise to the ordering facility.
   
7. Provision of shipping cartons (for returned merchandise) at request of ordering facility;
   
8. Provision to ordering facility of an inventory list containing items shipped to each manufacturer/wholesaler, with calculated return value.
   
9. Provision to ordering facility of a list of non-returnable inventory processed as waste;

AmerisourceBergen's on-site service includes:

1. A. Computer generated inventory of all scheduled items
   
2. A completed DEA 222 form for immediate transfer of C-IIs
   
3. Preparation of Form 41, accommodating removal of repack and patient prescribed products;
   
4. Preparation of return shipment to the processing facility
   
5. Complete documentation of return schedule drug report and scheduled drug waste detail report.
   
6. Drug summary report to track credits.

   Drugs that may not be returned through this contract are the following:

   
   
   • Drugs containing bodily fluids shall be disposed as medical waste through a medical waste contract
     
   • Illicit drugs shall be disposed through the agency's police department
     
   • Hazardous drugs (A list of hazardous drugs will be periodically posted when provided by Amerisource).

24. TRACKING OF RETURNABLE PRODUCTS

Amerisource will work with the State to track and ensure receipt of return credit for expired or outdated medications. This includes return of outdated products from manufacturers requiring the State to return directly, and will not allow AmerisourceBergen to return the product for credit.

Manufacturer allowable return of outdated product through AmerisourceBergen can be done either through the computer order entry system or called in directly to customer service. All returns are color coded in the facility's ordering system, allowing them to visibly see which of the items were returned to AmerisourceBergen. The returns stay in the system until the facility receives credit, at which time the State facility may elect to archive the return for 24 months.

For those manufacturers that require customer direct returns and will now allow a third party (i.e. AmerisourceBergen) to return the product for credit, AmerisourceBergen will work with the State to request that the product be returned directly to the manufacturer and the manufacturer issue the return credit to AmerisourceBergen. AmerisourceBergen will then pass on the total credit amount to the State. AmerisourceBergen will not charge a handling fee for any manufacturer credits that are passed through AmerisourceBergen to a State of California facility.

25. INVOICES

Invoices shall be for the amount of product delivered, not the amount ordered. Incorrect invoices shall not be paid. AmerisourceBergen shall resubmit corrected invoice before payment will be made.

The invoices must use AmerisourceBergen's letterhead that includes at a minimum, the name, address and telephone number of AmerisourceBergen. Each invoice must contain the following itemized information:

• State Contract Number
• Agency Billing Code
• Purchase Order Number
  
• Contractor's Product Identification Code
• Quantity, Unit Price and Extended Price without administrative/service fees
  
• Vendor's Administrative/Service Fee (also referred to as Discount from Wholesale Acquisition Cost)
  
• Item Description
  
• All other Discounts
  
• Agency Account Number
  
• Other fields as specified in "General Provisions" Point 29.

26. PAYMENT

1. Payment Terms:Net 45 Days Payment will be made in accordance with the provisions of the California Prompt Payment Act, Government Code Section 927 et. seq. Unless expressly exempted by statute, the Act requires State departments to pay properly submitted, undisputed invoices not more than 45 days after the date of acceptance of goods or performance of services or receipt of an undisputed invoice, whichever is later. All payments shall be remitted as specified by AmerisourceBergen to the appropriate Distribution Center. Contact Amerisource's Credit Director to obtain remittance information:
   Amerisource Contact: Ann Miranda
   Telephone: 800-383-5374 x 4814
   Fax 916-830-4803
   E mail: amiranda@amerisourcebergen.com

   
   

2. Prompt Payment Discounts A Prompt Payment Discount of 2.5% will be computed from date of delivery of the products, service and/or equipment as specified, or the date a correct invoice is received in the office specified by the State if the latter date is later than the date of delivery. Payment is deemed to be made, for the purpose of earning the discount, on the date of mailing the State warrant or check.

   
   

3. Payee Data Record (Std. 204) Form 204 Payee Data Records vary by distribution region, and will be posted periodically on this website. Contact Ann Miranda of AmerisourceBergen (see Point A, above) to obtain the applicable Payee Data Record for the appropriate AmerisourceBergen Distribution Center. AmerisourceBergen's California Sales and Use Tax Seller's Permit Number is SRYOHB99-681656. State departments and local governmental agencies can verify current permit validity at http://www.boe.ca.gov/

27. FUND APPROPRIATION

28. REBATE MANAGEMENT

AmerisourceBergen will manage the collection and dissemination of data regarding rebates to the State from contracted drug manufacturers. Service shall include:

1. Amerisource is responsible for collection of all rebate data;
   
2. AmerisourceBergen will compile all rebate data and distribute a monthly report showing ordering agency, manufacturer, drug name, and rebate amount for each agency;
   
3. The Monthly report will be distributed to the Pharmaceuticals Contract Manager and to the ordering agency receiving rebates.

29. REBATE REMITTANCE

AmerisourceBergen will collect all rebate payments owed to the State by the contracted drug manufacturers or contracts held by the GPO. On a monthly basis, AmerisourceBergen will submit an electronic remittance or order credit to each agency account for the earned rebates. AmerisourceBergen cannot charge any fees of any kind for performing this service.

30. INVENTORY MANAGEMENT

AmerisourceBergen shall initiate a complete inventory of each participating facility within 30 days after contract award and repeat the inventory on an annual basis. The initial inventory shall be completed before the transition period has been finalized. Any agency may waive this inventory requirement. The results of the initial inventory shall be reported to each facility before the commencement date of the contract and within 30 days of completion of the annual inventory thereafter. Waiver of inventory requirements must be obtained for each year of the contract. AmerisourceBergen shall notify the State's contract manager of those agencies who have waived the inventory requirement. Each facility will provide the dates of the last inventory taken. It will be the responsibility of AmerisourceBergen to contact each facility and schedule all inventories. In addition, AmerisourceBergen will obtain from each facility their projected usage for contract and non-contract drugs in their inventory.

It is AmerisourceBergen's responsibility to maintain sufficient inventories of those contracted items for the State and those local governments participating under this contract. AmerisourceBergen acknowledges that it is responsible for ordering drugs based upon usage of State agencies and participating local governments, from companies that have contract price relationships with the State. AmerisourceBergen in maintaining adequate inventories based upon the State's own usage shall not commingle orders and inventory with other clients as to prohibit the availability an access to those drugs ordered based upon the State's usage. This does not mean that AmerisourceBergen must segregate inventories.

31. OUT OF STOCK ITEMS

In the event a distribution facility is out of stock on items where the State has provided contract prices as a result of an action that was under the control of AmerisourceBergen, AmerisourceBergen shall determine the availability of the items from other distribution facilities and have the items delivered within 24 hours of original order placement. Should stock not be available from other distribution centers, the ordering pharmacist may ask AmerisourceBergen to locate available stock on the "open market" and ship at the contract price with no additional shipping fee. If a distribution facility is out of stock as a result of "Manufacturer Unable to Supply" the ordering pharmacist may ask AmerisourceBergen to locate available stock and ship at the contract price plus a shipping fee that shall be fixed based upon 24, 48 or 72 hour delivery. No additional shipping fees will be paid for items that are not delivered within 72 hours of the original order date.

AmerisourceBergen will charge the ordering facilities for shipping when transferring product where no usage had previously been provided or for non-contracted items.

32. BACKORDERS

If an ordering facility has an immediate need for a pharmaceutical that is on backorder, the facility may require AmerisourceBergen to buy the pharmaceutical on the open market. AmerisourceBergen may charge the State no more than the State contracted price for any item supplied by going to the open market. For any item that AmerisourceBergen provides at higher than contracted price, it is AmerisourceBergen's responsibility to demonstrate that a backorder is the fault of the pharmaceutical manufacturer and not AmerisourceBergen.

33. PRODUCT RECALLS

AmerisourceBergen will notify all State of California facilities of any recalls as instructed in the manufacturers' notification. AmerisourceBergen utilizes a Blitz File (delivery of information sheet with tote) and information boxes on their invoices. Recall information is also posted on www.amerisourcebergen.com. Hard copy notices will also be sent with the delivery driver, fax and e-mail.

34. PRODUCT SUBSTITUTION

If contract items are temporarily out of stock, AmerisourceBergen shall not make substitutions of contracted items. AmerisourceBergen may make suggestions to assist the ordering pharmacist, but it will not be the responsibility of AmerisourceBergen to make substitutes.

35. FILL RATE

Fill Rate shall not be less than 98 percent and will be computed as follows:

NUMBER OF LINE ITEMS (TOTAL UNITS) FILLED
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NUMBER OF LINE ITEMS (TOTAL UNITS) ORDERED

The service level calculation is based on completely filled lines. A completely filled line is one where all the units for that particular line are filled. Exclusions from the Fill Rate calculation include:

1. Contract items backordered or otherwise unavailable from the manufacturer provided that proof (of orders on behalf of the State) is provided;
   
2. Non-contract items not normally stocked by the AmerisourceBergen's responsible distribution facility, partially filled lines greater than 50 percent of the quantity ordered and completely filled within two (2) workdays.

   Failure to maintain the 98 percent service to a State facility during any monthly period will require AmerisourceBergen to rebate one percent (1%) of the total dollar value of purchases during that period to the State facility. Should any facility fall below the 98 percent service level for two consecutive months after notification of AmerisourceBergen's unsatisfactory performance, the State may elect to terminate the contract.

36. PRODUCT REMOVAL

37. NON CONTRACT ITEMS

Non contract items are defined as pharmaceuticals that are currently not contracted by the State with drug manufacturers. AmerisourceBergen quoted a discount from Wholesale Acquisition Cost for noncontract items that are specifically listed in the contract. When requested by an ordering facility, AmerisourceBergen must supply any pharmaceutical that is not listed in the contract but which is normally available to wholesalers at the contracted Wholesale Acquisition Rate. A list of contracted items is posted on this website, entitled "Amerisource Price List".

38. PRODUCT SHELF-LIFE

All drugs supplied at the time of delivery shall have not less than six (6) months shelf-life. However, AmerisourceBergen may consult and obtain concurrence from the ordering agency to accept the product with less than six (6) months shelf-life.

39. SHELF LABELS

AmerisourceBergen shall provide shelf labels and affix labels to State pharmacy shelves. Updates will be provided as required when new State pharmaceutical contracts are implemented. These services will be required for all State purchased items. AmerisourceBergen will provide these services at no cost to all eligible users with accounts. The minimum set of information to be provided by AmerisourceBergen on pharmaceuticals shelf labels is generic name, product description (brand name), NDC, and AmerisourceBergen item number.

40. PACKAGE STICKERS

The minimum set of information to be provided by AmerisourceBergen on pharmaceuticals package stickers is AmerisourceBergen item number, invoice number, invoice date and cost.

41. AGENCY REPORTS

1. Monthly Purchase Report: AmerisourceBergen shall submit a monthly purchase report to each State institution or local government for their purchases made of the month reported, and provide a year to date total for each item reflecting actual dollars expended. This report shall contain the following elements:
   
   
   • List of all items purchased;
     
   • Contract items shall have their own unique alpha identifiers that are easily identifiable and will differentiate the contract source;
     
   • Product name, generic name, product description, NDC number, package size, generic code, American Hospital Formulary Services (AHFS) code, current contracted price and Wholesale Acquisition Cost for the reported month, purchase quantity for the reported month and year to date;
     
   • Total dollars spent for the reported month as well as year to date;
     
   • Total dollar value and details for all returned products.
2. Monthly Contract Compliance Report: AmerisourceBergen shall submit a monthly purchase report to each State institution or local government for their purchases made of the month reported. The report shall consist of information about products that were purchased that were not under contract when an existing contract product was available. It shall also provide the contract identifier which differentiates between contracts. The contract compliance report shall contain the following elements:
   
   
   • Ordering Agency Identifier;
     
   • The non-contracted item purchased with its generic name, NDC number;
     
   • The quantity purchased, its unit price and its total dollars;
     
   • The comparable contract item with its identifier, its unit price and its total dollars;
     
   • The cost differences in total dollars as a negative value;
     
   • The report is to conclude with total dollars spent versus total dollars should have spent ending with the negative difference.
   
   
3. Monthly Manufacturer Unable to Supply Items Report: AmerisourceBergen shall submit a monthly detailed line item report showing where substitution has been required forcing the State to buy off contract, due to "Manufacturer Unable to Supply."
   
4. Monthly Rebate Management Report: AmerisourceBergen shall submit monthly reports to each ordering agency receiving rebates. The rebate management reports shall contain the following elements:
   
   
   • Manufacturer;
     
   • Drug name;
     
   • Rebate amount for each agency.
   
   
5. AmerisourceBergen also offers a variety of On-Line Reporting capabilities and Custom Reports. These reports can be generated by AmerisourceBergen and supplied via standard report delivery methods (i.e., cartridge, disk, hardcopy, etc.). Numerous reports can also be generated as needed using AmerisourceBergen's on-line ordering and reporting packages.
   
   
   • On-Line Reports - User Generated: AmerisourceBergen's on-line reports provide immediate access to 24 months of purchase history. Reports can be printed instantly and be used in combination with industry standard applications to merge information from different sources providing you with unlimited flexibility in custom report generation.
     
   • The vendor provides standard reports listed below. Please note that the vendor's standard "contract compliance Exception Report" does not track compliance for this contract, but merely shows lowest cost. ("Best price Logic"). Available reports include:
     
     
     • Market Share Report
       
     • Standard Report Delivery
       
     • 80/20 Report
       
     • Monthly Generic Usage Report
       
     • DRS Usage Files
       
       
       • Monthly 100% Purchases Report by vendor
         
       • Service Level Reports
       
       
     • Custom Reporting - Custom Reporting features
       
       
       • Standard and
         
       • Ad Hoc report options. Custom Reporting is Internet-based. Data is updated daily based on the State's current acquisition pricing, referencing 24 months of detailed invoice data for complete purchase and trend history.
       AmerisourceBergen shall have the ability to provide ad hoc reporting capabilities against all data elements in the ordering system at no cost to the state. The Prime Vendor shall permit and provide access to all data that appertains to any procurement action taken by an agency or the State as a whole. The State or agency may make copies of procurement data in any form and the use of such data shall not be restricted.