Exhibit 10.9
PROGRAM AGREEMENT
This Program Agreement is entered into as of the 4th day of
May, 2001 by and between PharmaCare Management Services, Inc.,
a Delaware corporation ("PharmaCare"), and ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, a California corporation ("CareDecision").
Recitals
A. CareDecision is the developer of MD@ family of products,
including MD@Hand, a proprietary, patent pending, e-health
networking product (CareDecision e-health product) that leverages
the data transportation power of the Internet, and distributes
this transportation system into a living and growing network of
palm computers (PDA) designed to enable healthcare industry
participants to effectively communicate vital medical, financial
and administrative information over the Internet, on a secure
basis, to process medical insurance specific information,
pharmacy management, clinical lab, medical eligibility and pre-
authorizations/referrals, and claims transactions ("Medical e-
health Transactions"), with a view to simplifying communications,
improving patient care and reducing the cost of that care. The
CareDecision e-health product includes the CareDecision Practice
Probe ("MD@PP") for automating the process of acquiring relevant
patent-specific data from existing management systems.
B. For Medical e-health Transactions involving the pharmacy
management component of the CareDecision e-health product, the
CareDecision MD@PP automates assimilation of (i) health plan
formulary options and compliance recommendations, (ii)
prospective drug utilization review, (iii) patient medical
history, (iv) potential drug interactions, (v) prior approval
form selection and printing and (vi) prescription form printing
and data storage, and Best Medical Care Guidelines (the "RRRX e-
commerce").
C. PharmaCare provides pharmacy benefit management services ("PBM
Services") for the pharmaceutical benefits programs offered by
various health plans ("Health Plans").
D. The parties desire to implement and conduct a program (the MD@
RRRX Technology") to integrate the CareDecision RRRX IT
technology with the data systems of PharmaCare and to introduce
the CareDecision e-health product to Health Plans and provider
groups under contract with them ("Provider Groups").
Accordingly, the parties hereby agree as follows:
Agreement
1. Objectives of the Program. The objectives of the MD@ RRRX
Technology are to establish an electronic communication link
between PharmaCare and CareDecision for the purpose of executing
RRRX e-commerce (the "RX Tentacle") and to offer the CareDecision
e-health product to Health Plans and Provider Groups for the
purpose of facilitating RRRX e-commerce.
/1/
2. Expectations of Pharmacare
2.1 Equipment Requirements. Throughout the proposed program,
PharmaCare will maintain a digital subscriber line or similar
Internet connection with a minimum line speed of 128KB and
computer equipment meeting the minimum specifications set forth
on Schedule 1, If any.
2.2 Delivery of Data Tables. Within 15 days
after the execution of this Agreement, PharmaCare will deliver to
CareDecision all data tables defined on Schedule 2 (the
"Pharmacare Message Specifications"). At the election of
PharmaCare, CareDecision will make its technical personnel
available to assist in this task at its standard per diem rates
for those personnel, together with reimbursement of their related
expenses.
2.3 Appointment of Project Manager.
PharmaCare will appoint a qualified project manager (the "Program
Manager") to coordinate PharmaCare's participation in this
agreement. The name and contact information of the current
Program Manager is set forth on Schedule 3. CareDecision will
make its personnel available to provide sufficient training to
enable the Program Manager to demonstrate all functions of the
CareDecision RRRX IT technology.
2.4 Health Plan Participation. PharmaCare will use its best
efforts to introduce the CareDecision e-health products to Health
Plans and assist CareDecision in securing agreements with Health
Plans for their participation in the MD@ RRRX Technology.
2.5 Provider Group Lists. Within 15 days after the execution
of this Agreement, Pharmacare will deliver to CareDecision, to
the extent available, a list of the Provider Groups, setting
forth for each listed group (a) the name of the group, (b) the
address and telephone number of the group, (c) the number of
individual physicians ("Practitioners") in the group and (d) the
name, specialty and DEA number of each Practitioner in the group.
To the extent any of this data is unavailable to PharmaCare or is
subject to disclosure restrictions, PharmaCare will use its best
efforts to obtain the data from Health Plans or secure their
consent to its use by CareDecision for the purposes contemplated
by Section 2.6, in either case as soon as practicable after the
execution of this Agreement. Upon receipt of this data,
CareDecision will advise PharmaCare about the status of any
listed Provider Groups already utilizing the CareDecision e-
health product under programs sponsored by other third party
administrators or health plans ("Existing Groups").
2.6 Coordination with Provider Groups. Within 15 days after
identification of Provider Groups as contemplated by Section 2.5,
PharmaCare will assist CareDecision in making arrangements with
Provider Groups (other than any Existing Groups) for (a)
installation of the CareDecision e-health products by
CareDecision on site at the offices of those Provider Groups, (b)
utilization of the CareDecision RRRX IT technology by the
Provider Groups and (c) cooperation of the appropriate Provider
Group personnel. PharmaCare will also use its best efforts to
encourage Health Plans to assist CareDecision in making these
arrangements.
2.7 Participation In Presentations. Upon reasonable prior notice
from CareDecision and at the discretion of PharmaCare, the
Program Manager or a member of the public relations staff of
PharmaCare will participate in field presentations organized by
CareDecision or the Health Plans to familiarize Provider Groups
or other healthcare industry participants with the benefits of
the CareDecision e-health product.
/2/
3. Responsibilities of CareDecision.
3.1 On-going e-health Software Development. In conjunction with
the data exchange contemplated by Section 2.1, CareDecision will
cooperate with PharmaCare in establishing the MD@ RRRX specific
technology and the resulting e-health network.
3.2 Systems Analysis and Software Installation. In conjunction
with the coordinating activities contemplated by Section 2.6,
CareDecision will (a) perform a technical analysis of the
hardware, software and platforms maintained by the Provider
Groups and, as soon as practicable thereafter, (b) acquire, or
cause to be acquired, suitable numbers of correctly equipped
PDAs, (c) install the CareDecision e-health product on site at
the offices of the Provider Groups (other than any Existing
Groups) and (d) activate and test the CareDecision RRRX IT
technology and MD@PP functionality modules of the installed
CareDecision e-health product.
3.3 Technical Assistance. CareDecision will make its technical
personnel reasonably available to address any technical questions
raised by the Provider Groups about the utilization of the
CareDecision e-health product for executing RRRX e-commerce.
3.4 Additional CareDecision e-health product Modules. At any
time, if requested by PharmaCare or the Health Plans,
CareDecision will activate additional functionality modules of
the CareDecision e-health product on site at the offices of the
Provider Groups.
4. Marketing Undertakings.
4.1 Website Links. Throughout the continuation of the MD@ RRRX
Technology, (a) CareDecision will have the right and license to
display PharmaCare's logo on the home page of ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
the website maintained by CareDecision, (b) CareDecision will
maintain a hyperlink to PharmaCare's website, (c) PharmaCare will
have the right and license to display the CareDecision logo on
the home page of the website maintained by PharmaCare and (d)
PharmaCare will maintain, on the home page of its website, a
brief description of the MD@ RRRX Technology as well as a
hyperlink to the CareDecision website.
4.2 Client Newsletters. Throughout the continuation of the
contemplated agreement term, all client newsletters to be
published by PharmaCare will have space reserved for promotional
material about CareDecision. The content will be provided by
CareDecision, subject to reasonable editorial modifications by
PharmaCare.
4.3 Industry Conferences. Throughout the continuation of the
contemplated agreement term, at the discretion of PharmaCare,
CareDecision will have the right to participate as a co-exhibitor
at industry conferences and other events where PharmaCare is an
exhibitor.
5. Business Model/Fee Structure.
5.1 Business Model for RRRX Technology Implementation. The
company recognizes that PharmaCare will be providing its current
and prospective customers with value added features and services
through the inclusion of the ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ suite of software
products within its existing product offerings. Those incremental
features and services include but are not necessarily limited
/3/
to: drug formulary notifications duplicate prescription
elimination, electronic prescription construction and
transmission, DUR screening, optimum care patient diagnosis and
protocol guidelines, prior-authorization of non-formulary
medications, lifetime patient drug history, clinical lab orders
and results reporting, patient encounter data and reporting, and
referrals and authorizations.
5.2a Additional Features and Fees. ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ believes that
PharmaCare through the provision of these incremental features
and services will be positioned to command enhanced pricing for
as a result of implementing this program. As a result,
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ proposes the execution of a business model that
divides the enhanced revenues between PharmaCare and
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ on a percentage basis.
5.2b Revenues Split. A significant portion of the enhanced
revenues is expected to be derived from the ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ RRRX
Technology and its applications and related functions. Under this
program, ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ will be entitled to 60% of those
pharmacy benefits and other service revenue increases. PharmaCare
will retain 30%. The remaining 10% will accrue to a partnership
established between Pharmacare and CareDecision for the marketing
of similar RRRX Technology services to other parties within
Pharmacare's trade areas, as a means of expanding the medical
data networks that will be established.
5.2c Additional Services Offerings. Additional revenue will also
be derived from clinical and administrative transactions that are
beyond the scope of the RRRX Technology modules. ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
proposes to share those revenues with PharmaCare;
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ shall receive 70% of those revenues with 20%
being retained by PharmaCare, and 10% will accrue to a
partnership established between ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and Pharmacare
for the marketing of similar services to other parties within
Pharmacare's trade areas.
5.3 Offsetting Costs. ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ will be pursuing
alternative sources of revenue to mitigate material,
installation, training and other costs anticipated to be incurred
in the normal course of business operations. The pursuit of those
alternatives is expected to include banner advertising, corporate
sponsorship and data marketing. It is the company's intention to
share those additional revenues with PharmaCare upon their
realization. The formula employed to determine their final
distribution will be subject to negotiation between the companies
prior to the adoption of a full commercial production agreement
between PharmaCare and ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
5.4 Pass Through Transactions. When an Internet hyperlink to a
website controlled by PharmaCare results in its receipt of a
third party fee for the execution of a Healthcare Transaction
through the CareDecision e-health product, PharmaCare will remit
to CareDecision, within 30 days thereafter (a) $.10 where the
transaction involves the extraction of patient-specific
information through the MD@PP or (b) $.01 where the transaction
does not involve the extraction of patient- specific information
through the MD@PP.
5.5 Fee Continuation. In the event this Agreement is not
extended in accordance with Section 11 or is terminated in
accordance with Section 12, PharmaCare's right to continued
payments under Sections 5.1 and 5.2 and the rights of
CareDecision to continued payments under Section 5.3 shall
terminate on the first anniversary of the expiration or
termination date.
/4/
6. Representation and Warranty of CareDecision. CareDecision
represents and warrants to PharmaCare that the CareDecision RRRX
IT technology and any other functionality module of the
CareDecision e-health product installed at the request of
PharmaCare or the Health Plans meet or exceed the requirements
for encryption of authentications and identifications as set
forth in the HCFA Internet Security Policy Issued on November 24,
1998 and subsequent transmittals.
7. Representation and Warranty of PharmaCare. PharmaCare
represents and warrants to CareDecision that all necessary
patient authorizations for the release of their medical and
medication histories to physicians under contract with the Health
Plans have been obtained or will be obtained by PharmaCare prior
to implementation of the MD@ RRRX Technology, and those
authorizations extend to the dissemination of that information to
Provider Groups through the CareDecision RRRX IT technology.
8. Indemnification. Each party (an "Indemnifying Party") will
indemnify and hold harmless the other party and its officers,
directors and other affiliates (each, an "Indemnitee") from and
against any and all judgments, penalties, fines and amounts paid
in settlement, including any interest assessments or other
charges payable in connection therewith, and all reasonable
expenses, including attorneys' fees, retainers and disbursements,
court costs, experts' fees and travel expenses incurred by the
Indemnitee in connection with any threatened, pending or
completed action, claim, suit, investigation, hearing or other
proceeding, whether civil, criminal, administrative, arbitrative
or investigative, any appeal therein or any inquiry or
investigation that could lead thereto, to which the Indemnitee
is, was or at any time becomes a party, arising from the breach
by the Indemnifying Party of its representation and warranty
under Section 6, in the case of CareDecision, or Section 7, in
the case of PharmaCare.
9. Confidentiality.
9.1 Confidentiality Undertaking. The parties acknowledge that
their discussions and implementation of the Program may entail
the exchange of confidential information, including technical
specifications for the CareDecision e-health product and
information about business methods, operations and prospects,
costs, markets, pricing policies, technical processes and
applications and confidential patient records ("Information").
Each party agrees that, subject to the exceptions set forth
below, for five years after the Commencement Date hereof, it
will, (a) keep all information confidential, (b) refrain from
disclosing any Information to any person or firm, other their
respective employees and agents having a need to know and (c)
refrain from using any Information, directly or indirectly, for
its own benefit or the benefit of any affiliate.
9.2 Exceptions. For purposes of this undertaking, Information
will not include information that (a) is in the public domain at
the time of disclosure to a party, (b) becomes part of the public
domain after disclosure to a party through no fault, act or
failure to act, error or breach of this undertaking by the
recipient, (c) is known to the party at the time of disclosure,
(d) is discovered by the party independently, (e) is required by
order, statute or regulation of any government authority to be
disclosed to any court or other body, provided that the party
will notify the other party thereof to provide or afford it the
opportunity to obtain a protective order or other relief, or (f)
is obtained from a third party who has acquired a legal right to
disclose the specific information.
/5/
9.3 Remedies. In addition to any other remedies for breach of the
foregoing confidentiality undertakings, the parties will be
entitled to equitable relief in the event of any breach or
threatened breach thereof. In the event of litigation relating
thereto, the prevailing party will be entitled to recover the
reasonable legal fees incurred in connection therewith, including
any appeal therefrom.
10. Publicity. Neither party will use the name of the other
party in any marketing, advertising or other public announcement
about the subject matter of this letter without the other party's
written consent. A party desiring to make a public disclosure
will submit a draft thereof for prior approval by the other
party, which will be deemed to have been given if comments
thereon are not provided within 72 hours.
11. Term. The term of this Agreement shall commence on the date
hereof and expire on the third anniversary thereof, subject to
termination under Section 12 and to automatic extension for one
additional year periods unless either party notifies the other
party within 60 days prior to the scheduled extension date that
it elects to forego the extension. The obligations of the parties
under Sections 5, 8, 9 and 10 shall survive the expiration or
termination of this Agreement.
12. Termination. Either party may terminate this Agreement
upon notice that the other party has committed a material breach
of one or more of its material obligations hereunder and has
failed to cure the breach within 30 days of written notice by the
non-breaching party, specifying the nature of the breach in
reasonable detail.
13. Independent Contractors. Each party will act as an
independent contractor hereunder, with sole responsibility for
its own operations, personnel and operating expenses, and nothing
contained in this Agreement will be construed to create a
partnership or joint venture between the parties.
14. Assignability. This Agreement and a party's rights and
obligations hereunder may not be assigned for any reason without
the written consent of the other party.
15. Waiver of Provisions. The waiver of compliance at any time
with any of the provisions, terms or conditions contained in this
Agreement will not be considered a waiver of the provision, term
or condition itself or of any of the other provisions, terms or
conditions hereof. Any waiver hereunder must be express and in
writing by the party agreeing to waive any right hereunder.
16. Integration. This Agreement contains the entire agreement
of the parties with respect to the subject matter hereof. ,
17. Amendment. This Agreement will not be amended or modified
except by a written instrument signed by both parties.
18. Governing Law. This Agreement and the rights and obligations
of the parties will be governed by and construed in accordance
with the laws of the State of California, excluding any conflict
of laws rules of that State or other principle that, might refer
the governance or construction of this Agreement to the laws of
another jurisdiction.
/6/
19. Binding Effect. The terms, conditions and provisions of this
Agreement and all obligations of the parties will inure to the
benefit of, and be binding upon, the parties hereto and their
respective successors and permitted assigns.
20. Notices. Any notice given under this Agreement will be made
in writing and will be deemed to have been duly given or made if
delivered personally, or mailed (postage prepaid by registered or
certified mail), or sent by facsimile to the parties at their
respective addresses set forth below. Any notice so sent will be
deemed to have been given or delivered at the time that it is
either (i) personally delivered or (ii) within two business days
after the date deposited in the United States mail or one
business day after delivery to an overnight courier, if sent by
mail or courier, or (iii) when receipt is acknowledged, if sent
by facsimile, as the case may be. Any party may change its
address by giving notice in writing, stating its new address, to
the other party.
If to PharmaCare:
PharmaCare Management Services, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
President
If to CareDecision:
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
21. Counterparts. This Agreement may be executed in any number
of separate counterparts that together will constitute but one
and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ INCORPORATED PHARMACARE MANAGEMENT SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------- ------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President Title: Senior Vice President
/7/
