Exhibit 10.3(c)
EXECUTION COPY
AMENDMENT NO. 2
TO
AMENDED AND RESTATED
MANAGED CARE AGREEMENT
Amendment No. 2 dated as of November 24, 2003 ("Amendment No. 2") to the
Amended and Restated Managed Care Agreement, dated and executed as of May 28,
2003, between Merck & Co., Inc., a New Jersey corporation ("Merck"), and Medco
Health Solutions, Inc., a Delaware corporation ("Medco"), as further amended by
Amendment No. 1 dated as of July 23, 2003 ("Amendment No. 1"), and effective as
of the Effective Date (as amended by Amendment No. 1, the "Agreement").
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Agreement. All section references used herein are to the
Agreement.
WHEREAS, Medco is in the business of providing PBM Services to
corporations, health maintenance organizations, unions, insurance carriers,
government employee plans and others;
WHEREAS, Merck is a pharmaceutical company engaged in the discovery,
development, manufacturing and marketing of pharmaceutical products;
WHEREAS, the parties desire to amend the Agreement to clarify (a) the
information and data requirements set forth in Article VII to which Medco is
subject, and (b) the terms upon which the adjustments to the benchmarks for
market share rebates exclude utilization by Medco Plans, with respect to
Calendar Quarters from and after October 1, 2003, of Merck Products included in
Non-MAS Groups of Merck Products; and
WHEREAS, this Amendment No. 2 shall be deemed to be effective as of October
1, 2003.
NOW, THEREFORE, in consideration of the foregoing, the parties hereby agree
as follows, effective as of October 1, 2003:
1. Section 7.1 of the Agreement is amended to read in its entirety as
follows:
7.1. Periodic Information Delivery. At Medco's expense, Medco shall
provide to Merck promptly (w) (but in any event within 30 days) after each
month, the information specified in Schedule 7.1(w), (x) (but in any event
not later than the last day of each Calendar Quarter), (i) electronic data
showing all "point of adjudication" Utilization Controls - e.g., electronic
coverage management rules, CDUR, RDUR, RationalMed, and prior
authorizations -- that are in place at each
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Medco Plan on the 45th day of the applicable Calendar Quarter, together
with (ii) the information specified in Section D of Schedule 7.2(a)(1) (the
information described in clauses (i) and (ii) being collectively referred
to hereinafter as the "snapshot information"); provided that, solely with
respect to the Calendar Quarters ended September 30, 2003 and December 31,
2003, the snapshot information shall be as set forth in paragraph D of
Schedule 7.2(a)(1), (y) within 90 days following each Calendar Quarter, the
information specified in Section 7.2(a), and (z) (but in any event within
30 business days) after a written request therefor, all other data and
information requested by Merck for purposes of administering this Restated
Agreement.
2. Section 7.2(a) of the Agreement is amended to read in its entirety
as follows:
7.2. Quarterly Data. (a) Within 90 days following the close of each
Calendar Quarter, Medco shall deliver to Merck, in a mutually acceptable
electronic format, the information specifically described in Sections A, B
and C of Schedule 7.2(a)(1), the information described in Schedule
7.2(a)(2), and such other information available to and retrievable by Medco
(with the cost and expenses of obtaining and retrieving such information to
be paid by Medco), as Merck shall deem reasonably necessary for purposes of
determining the rebate, if any, Medco shall be entitled to under this
Restated Agreement (collectively, the "Quarterly Data"); provided, that,
Medco may provide to Merck in hard copy format (rather than in electronic
format) that portion of such information that in the ordinary course of
business Medco does not maintain in electronic databases (e.g., lists of
Utilization Controls) so long as such information provided in hard copy
format is orderly, accessible, complete and accurate. The Quarterly Data
submitted by Medco shall identify, with respect to each Merck Product
dispensed under each Medco Plan during the applicable Calendar Quarter,
whether prescriptions for such Merck Product dispensed under such Medco
Plan are eligible for any Formulary Access Rebate Amount, specifying
whether for such Calendar Quarter such Merck Product was (i) On Formulary
under such Medco Plan, (ii) subject to Non-Rebate-Eligible Utilization
Controls under such Medco Plan, or (iii) not available to Members under
such Medco Plan on a Basis at least as favorable as the Basis upon which
any Basis Competitive Product is available to Members under such Medco
Plan. The Quarterly Data shall include a "Quarterly Utilization Controls
Report" disclosing all Non-Rebate Eligible Utilization Controls and, for
each Calendar Quarter beginning on or after January 1, 2004, all Rebate
Eligible Utilization Controls that are in place for each Medco Plan during
the Calendar Quarter and not reflected in the snapshot information provided
to Merck with respect to such Calendar Quarter. For each Medco Plan, this
report shall include group-level data consisting of electronic or hard copy
data showing all switch programs, teleconsulting, facsimile intervention,
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counterdetailing, and similar controls and other interventions or
communications that constitute Non-Rebate Eligible Utilization Controls and
are implemented at any time during the applicable Calendar Quarter and not
reflected in the snapshot information provided to Merck with respect to
such Calendar Quarter; provided, that, interventions and communications
implemented solely by Plans (without the participation of Medco) must be
reported in the Quarterly Utilization Control Report only when and to the
extent that Medco is aware of such interventions and communications.
3. Schedule 7.2(a) to the Agreement is renumbered as "Schedule
7.2(a)(1)" and amended to appear in its entirety as set forth on Exhibit A
hereto.
4. The Agreement is amended to include a new Schedule 7.2(a)(2) as set
forth on Exhibit B hereto.
5. The definition of "Incoming Medco Plans Sales Percentage" as set
forth in Annex B of the Agreement is hereby amended to read in its entirety as
follows:
"Incoming Medco Plans Sales Percentage" shall be, with respect to any
Calendar Quarter, (I) the sum of the Aggregate Medco Cost of all Eligible
Prescriptions of all Merck Products dispensed during such Calendar Quarter
under Eligible Medco Plans that constitute Incoming Medco Plans with
respect to such Calendar Quarter, divided by (II) the sum of the Aggregate
Medco Cost of all Eligible Prescriptions of all Merck Products dispensed
during such Calendar Quarter under all Eligible Medco Plans (including
Incoming Medco Plans with respect to such Calendar Quarter). For purposes
of calculating the Incoming Medco Plans Sales Percentage, any Merck Product
included in a Non-MAS Group of Merck Products shall not be treated as a
Merck Product.
6. The definition of "Outgoing Medco Plans Sales Percentage" as set
forth in Annex B of the Agreement is hereby amended to read in its entirety as
follows:
"Outgoing Medco Plans Sales Percentage" shall be, with respect to any
given Calendar Quarter, (I) the sum of the Aggregate Medco Cost of all
Eligible Prescriptions of all Merck Products dispensed during the
immediately preceding Calendar Quarter under Eligible Medco Plans that
constitute Outgoing Medco Plans with respect to the given Calendar Quarter,
divided by (II) the result of (a) the sum of the Aggregate Medco Cost of
all Eligible Prescriptions of all Merck Products dispensed during the
immediately preceding Calendar Quarter under all Eligible Medco Plans (but
excluding Outgoing Medco Plans with respect to the immediately preceding
Calendar Quarter), less (b) the amount reflected in clause (I) of this
paragraph. For purposes of calculating the Outgoing Medco Plans Sales
Percentage, any Merck Product included in a Non-MAS Group of Merck Products
shall not be treated as a Merck Product.
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7. The definition of "Quarterly Incoming Sales Amount" as set forth in
Annex B of the Agreement is hereby amended to read in its entirety as follows:
"Quarterly Incoming Sales Amount", with respect to any Calendar
Quarter, shall equal the sum of the Aggregate Medco Cost of all Eligible
Prescriptions of all Merck Products (other than Merck Products that are
included in a Non-MAS Group of Merck Products) dispensed during such
Calendar Quarter under all Eligible Medco Plans that constitute Incoming
Medco Plans with respect to such Calendar Quarter. For any Calendar Quarter
with respect to which there are no Incoming Medco Plans, the "Quarterly
Incoming Sales Amount" shall be zero.
8. All references in the Agreement to the "Restated Agreement" are
references to the Agreement as previously amended and as amended by this
Amendment No. 2. The definition of "Restated Agreement" is hereby amended to
read in its entirety as follows:
"Restated Agreement" means this Amended and Restated Managed Care
Agreement, dated and executed on May 28, 2003, between Merck and Medco, as
further amended by Amendment Nos. 1 and 2 dated respectively as of July 23,
2003 and November 24, 2003.
9. This Amendment No. 2 may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to the
Agreement as of the date set forth above.
MERCK & CO., INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President, U.S. Human
Health Division
MEDCO HEALTH SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Counsel
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