TO: Honorable Board of County Commissioners
THROUGH: John A. Titkanich, Jr., County Administrator
FROM: Suzanne M. Boyll
DATE: May 5, 2025
SUBJECT: Updated RX Benefits Administrative Services Agreement dated October 1, 2024 and Exhibit A - Pricing Addendum Effective January 1, 2025
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BACKGROUND
Effective May 1, 2018, Indian River County Board of County Commissioners approved a recommendation to carve-out the pharmacy benefit under the County’s group health insurance program from Florida Blue and select Express Scripts as the pharmacy benefit manager. Administrative services for the pharmacy benefit are provided by RX Benefits. Pricing and rebates are updated annually in January of each year and provided to the BOCC for approval. The initial term of our agreement with RX Benefits was May 1, 2018 through April 30, 2019. The agreement has renewed annually thereafter.
In April 2022, we aligned the agreement with RX Benefits to coincide with our benefit plan year beginning October 1st of each year and ending on September 30th, and subsequent 12-month renewal periods would begin on October 1st and end on September 30th (2023 ASA addendum effective April 30, 2022). An additional cost reduction was implemented which removed the $0.40 per claim fee under the Manufacturer Copay Assistance Program Section of Table 2.1 of Exhibit A effective as of April 1, 2022. This results in an annual savings of approximately $17,600 per year. All pricing and rebate guarantees remain consistent with the in-force pricing agreements. These changes were reflected in the 2023 Administrative Service Agreement addendum approved by the BOCC on February 7, 2023.
Indian River County continued the relationship with RX Benefits and extended the contract an additional year effective October 1, 2024 through September 30, 2025. RX Benefits has provided an updated Administrative Services Agreement (ASA) effective October 1, 2024 that also includes the improved pricing that went into effect January 1, 2025. The agreement has been reviewed by Lockton and there were no concerns regarding the contract updates. The agreement has also been reviewed and approved by the County Attorney's office.
The new ASA focuses on adding signature list pricing addendums moving forward which would provide for pricing improvements without requiring additional signatures. Pricing updates happen annually effective January 1st for all RX Benefits clients irrespective of the plan year.
ANALYSIS
The improved January 1, 2025, pricing and rebates reflect a reduction in costs of approximately $300K annually which represents an improvement of 5.62%. See attached pricing analysis.
BUDGETARY IMPACT
Funding for the pharmacy benefit is included in the health plan trust fund.
PREVIOUS BOARD ACTIONS
Approved initial agreement with RX Benefits in 2018 and subsequent annual renewals and amendments to the pricing agreement.
STRATEGIC PLAN ALIGNMENT
Approved initial agreement with RX Benefits in 2018 and subsequent annual renewals and amendments to the pricing agreement.
STAFF RECOMMENDATION
Recommended Action
Staff respectfully requests the Board of County Commissioners approve and authorize the Board Chairman to sign the updated 2024 Administrative Services Agreement reflecting the improved January 1, 2025 pricing with RX Benefits after review and approval by the County Attorney.