The following is a tentative list of parameters to be measured relative to evaluation of the pilot project:

A.

B.

C.

One-Time Startup Costs to the Medi-Cal Program

1.

Modification of claims payment system to provide
incentive fees.

1.

2.

3.

Total dollar amount of rebates less operating costs
and incentive fees.

Average net cost/unit over all brands for participating
pharmacies versus average cost/unit for same pharmacies
in prior year adjusted for price increases.

Net cost/unit for Volume Purchase Plan brand versus
average statewide cost/unit over all brands for all
non-participating pharmacies.

IV.

-4

Pilot Project Evaluation Parameters (cont'd)

C. 4.

D.

5.

Estimated annual cost savings for statewide implementation of the pilot drugs based on: (1) rebate rates from pilot project and (2) expected rebate rates with larger volume.

Breakeven points on rebate levels for each drug based on average prescription size, estimated volume and percentage shifts to the Volume Purchase Plan brand. Utilization of Volume Purchase Plan Designated Brands

For each participating pharmacy and over all participating pharmacies:

1.

2.

Comparison of total volume of each drug with prior
year.

Comparison of percentage utilization of each brand
against prior year for each drug.

3. Comparison of percentage shift to Volume Purchase
Plan brand by drug.

4.

Reasons given by pharmacies for not utilizing the
Volume Purchase Plan brand.

E. Quality Assurance

1.

2.

Problems, such as time lags or lack of current information, in using FDA evaluations of bidder capabilities.

Results of assay reports by independent testing laboratory.

3. Number and type of quality complaints by pharmacies or physicians:

3.

Physicians:

a.

b.

Medical-therapeutic problems reported.

Reported increases in use of prescriptions
with no substitution permitted.

Manufacturers:

8.

b.

c.

d.

Number of bids submitted and amount of rebate.

Comparison of bidder's volume with historical data.

Comparison of price changes to wholesalers/ pharmacies for selected brands and other brands.

Reported problems/satisfaction with bid process and operation.

Wholesalers:

a. Reported increase/loss of volume.

b. Perceived impacts on buying power for non-Volume Purchase Plan drugs, the franchise system and retailer complaints.

This is your Invitation to Bid on the evaluation of the Volume Purchase
Plan (VPP) pilot project of the State of California

CONTRACT PERIOD

A contract of 18 months duración shall be awarded to the successful bidder.
The contract shell start before the plementation of the VPP pilot project
and shall end with the delivery of a final report after the pilot project
has been in operation for 12 months and prior to the beginning of the 16th
month of the project

DAYS.

The undersigned offers and agrees if this bid be accepted within 30 calendar days from the date of opening, to furnish all of the items upon w prices are quoted at, the prices set opposite each item, delivered at the designated point is) by the method of delivery and within the to specified above and rubject to the General Provisions (Office of Procurement · GSOP 182 Rev. 7/76). Small business claimants also attest in the small business fum mate above is true and correct.

PLEASE COMPLETE

MAIL TO:

P.O. BOX 1612

STATE OFFICE OF PROCUREMENT

By (Signature)
FIDA

ADDRESS

Title
Phone