Council agenda item 21.2.1, December 22, 2015: extension of Contract 2012-256R, pharmacy benefit management, Express Scripts

What this document is

This is a seven page agenda packet for the El Paso City Council meeting of December 22, 2015, item 21.2.1. It asks the council to approve "the City's first option to renew for two additional years from January 1, 2016 through December 31, 2017 under Proposal 2012-256R" (page 1). The packet holds the department head's summary form (pages 1 and 2), the council project form with posting language (page 3), the October 23, 2012 motion that made the original award (pages 4 and 5), and a "Seven (7) Factor Option Memo" from the purchasing department dated December 15, 2015 (pages 6 and 7). Contract 2012-256R itself is not attached.

What it does tell us

Contract 2012-256R bundled three vendors under one solicitation: Aetna Life Insurance Company as third party administrator and network provider, Deer Oaks EAP Services for the employee assistance program, and Express Scripts Inc. as pharmacy benefit manager (page 3). The original award on October 23, 2012 ran from January 1, 2013 through December 31, 2015 with two further two year options (page 1). For Express Scripts, the 2012 motion listed estimated annual claims and fees of $9,800,000.00, an initial term estimate of $29,400,000.00 over three years and $68,600,000.00 over seven years (page 4). The 2015 extension carried the same annual estimate, $9,800,000.00, for a two year total of $19,600,000.00 (page 3).

The background section says "Express Scripts fees did not have an increase for January 1, 2016 to December 31, 2016" and credits the Express Scripts pharmacy network with savings of "$21.4M of the Average Wholesale Prices of retail pharmacy and home delivery costs" for calendar years 2013 and 2014 (page 1). Savings measured against average wholesale price is a discount claim, not a statement of what the city actually paid per prescription or what the pharmacy received. The option memo's answer to whether the option price beats the market is that three of four nearby public entities picked Aetna and the fourth picked Express Scripts (page 6), which is a statement about peers, not prices. The memo also records a vendor performance rating of "GOOD (7-8)" or better and no debarment (page 7).

Why it cannot be scored

Everything on our checklist lives in the contract: rebate pass through, spread, audit rights, formulary control, termination, data ownership. The packet shows dollar estimates and the fact that fees were flat for one year, but not the pricing exhibits, the guarantee language or a single clause of Contract 2012-256R. The 2012 award and this extension are both council actions about the agreement, not the agreement.

An El Paso resident can request under the Texas Public Information Act the executed Contract 2012-256R and the Express Scripts pharmacy benefit management agreement under it, with all exhibits, the pricing and rebate schedules, the documents exercising the 2016 through 2017 option, and any later exercise of the second option for 2018 through 2019. The city later awarded medical and pharmacy administration to Aetna in 2024, and that contract text is not posted either, so a request could cover both the old arrangement and the current one.