Corcoran et al v. CVS Health Corporation

Northern District of California, cand-4:2015-cv-03504

Exhibit 14

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3 Exhibit 14 Christopher Corcoran, et al., CVS Pharmacy, Inc., I, Joseph C. Zavalishin, pursuant to 28 U.S.C. § 1746, hereby affirm that I am over 18 years of age and competent to make the following Declaration. 1. I am currently the Senior Vice President, Network Relations for OptumRx, Inc. ("Optum"). Optum, a subsidiary of UnitedHealth Group and affiliate of UnitedHealthcare Services, Inc., is a leading pharmacy benefit manager ("PBM") in the United States. I have held this position since February 2016. I lead the department responsible for provider and payer- facing relationships with Optum's business partners, including its network pharmacies. In my department, I oversee approximately 40 Optum employees. 2. Prior to becoming a Senior Vice President at Optum, I was the Executive Vice President of Strategic Contracting & Payer Relations at AxelaCare Health Solutions ("AlexaCare") from January 2014–February 2016. AxelaCare is a leading provider of home infusion solutions, which Optum acquired in late 2015. In that role, I had responsibility for, among other things, setting strategy and contracting with suppliers, accountable care organizations, pharmaceutical manufacturers, and health systems, as well as other related provider- partnership opportunities. 3 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION Plaintiffs, v. Defendant. Personal Background 3. Prior to joining AxelaCare, I worked for Walgreens for approximately four and one-half years, initially as Vice President, Managed Care Contracting (June 2009–January 2013), and then as Vice President, Contracts & Pricing Development (January 2013–December 2013). In that position, I was responsible for negotiating Walgreens' contracts with PBMs and health plans in order to participate in their pharmacy networks. 1 Case No. 15-cv-03504-YGR CLASS ACTION DECLARATION OF JOSEPH C. ZAVALISHIN RARET T ELSERNE 2 MALIGENTE HTTXEBER GUIDE GVS/pharmacy Health Savings Pass N Save on prescriptions, plus 10% off at Mante ASE ES S 3 Condor Code 26240 BIN 004336 PCN HEALTHPASS Group Number CVSRX Member Narne JANE DOE Member ID XXX 0000000000 Effective Date 00/00/0000 ASEANSING This is not insurance. Eervietter Provider ass starrek 3 .6 GARE 2 orele cat. Sicbealthsaviespass ONLINE CVSC-0397706 CVSC-0397707 LICIS PASTAMISTER PRECES ROYAL PRE SSURE SSIMI PRICEFFICIEN TENA TES CROTALATIEINTLINSER TERTUTUTUR TIN PIESE DI SESSELTE GECIS ES Milena Russels ROTTS 11429LULILLA INILO.LJILLIAN2. URJE.ILE.DI S O SIALE VILELL DIBU EVENTS RIVELARUS ALSHANIC TE File:L alelebae: COM HE H EBBX0069 SATIROL SCHRITT gelem WS AMINO SUOLO See Teler GECESSZISTELI HIZO SHERIA ARBETE AGAMAMA THA USATIONSEPAREMPERATURAN eneste pistol 2 were den 2 220 EIDELBERG LIGHTEDIOUS ABOUT 10 SUTERTE SE m a dadali para o DEPZSEF H dit CIAST in pihapiiri LUDWICONA Generes 1 VITIES R e al program. Process any new or refill prescriptions for the customer, fee as indicated. Submission of the above NDG enralls the customer in the Process enrollment fes using NDC 00000-0001-64. Collect the $10 enrollment Group ID: CVSRX Compiste address and phone number Lipoate patient profile with: PCN: HEALTHPASS Member 10: XXX 0000000000 BIN: 004336 Use Condor Code: 26241) To endila new member: Health Savings Pass: $10.00 annual fee, per person Fax completed enrollment fom to 1-800-898-4291 26 BA een கோ SERER in Bloemfontein La ASSES STRICT WARRANTY RICE TEAT i moksnes apgals and seriales, al co-onuna testa Canada BUTTER HATARISH HARUSI WASIMARI EDGE CEASURINGUS. 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MINORITUATIRALA SELALU MAREL O iriti LELLDELESS DRESSIL E RGET2Ueo DUASE பாயயாகம் ABHISHEFUR பெயர் DIE Tema on WebSearchs LP PRWARDƏKAR program and other savings benefils from CVS/pharmacy and MinuteClinic -By providing your email address, you may receive information about the Email (optional Serw with Sid ԵՎՅԱԼ ԿԱՀՈՒՅՔԿՎԱՅՈՂԱԿԱԹ:40ԱՅՆերկա թերոՅԻՆ ՊԱՅՔԱՐՈԶԵԿ e: 157REDIEWIRULITEILE DERTUSS IMAGIERTEN HASTA Етиени чаши и завршителите на терасынан талтаар асран ՈՒՑ die LA S ERPOOLE LE SPALATE S 20:505 27255 R usdae 489 49 rädd EneBPLARENDBEds Bewus12923 Skies aue ici O 24 SAS EL 1939:12 PAR PRIMULA Pasakos han seda ՅՍՕսմ լայ SEXSHAM STRESS Date of Birth (Imanti/day year) Male / Female u d ertrap die padobrogram for Sale T H EORIE SETTORET Zip Code jesto են B SESSE SUSP 3 1RPFLEURTER SMEISTAR doo Ա-94 ՀԱ ՎԵՆԴԵՅ (Tree Seարցրբ Դ ԹԱԼԱ:տնի ԵրանցS/9, Ա ՄՅԹեմսՐ մ: u dapeau duz- se actpanute agropea 09 1910 pasadowe gupinsque 10-sudud:3sej samazs PTORL zabeuranja1319841sansepsia BINARIE Heren Street Address Lulu FERIE eduus apei Daes toidjosad TUPE reisiminen USTRERE S T CERCHE VIFUNDISH Last Name Middle initial First Hame Descriptional Befatis SIMIMMAMMING LE Healiti Savings Factor AM sahamas Bancpaties in The towing:lops and Coherisas.goeth y na he custentarHeat: Sadros Pass Biograd LAGE DO Tim SEEDS G fuam E Hisi. A ula Selecteaza Sime G Member Information Enrollment BOUT UCESTUIMMUNOV S Gangna Healiz MANUSILESEDgramar Sharma GEOFREE Fire & RE IPELAH STELLE ........ Your costs. Lowered........ - Your needs. Covered.... Your Questions. Answered. the Health Savios Pass is With your Health Savings Pass, you can get prescription medications and treatments for: How do I know nght for me RESELLER SB SER Whether you have limited prescription insurance or no coverage at all, the CVS/pharmacy Health Savings Pass is here to help you save money - the easy way. It's not an insurance plan, but a prescription savings pass that allows you to save on the medications you and your family need. Plus, you'll receive 10% off at MinuteClinica inside select CVS/pharmacy stores. Enrollment is easy and costs only $10 annually, per person. You can sign up today and start saving immedlately. Here's how you can save with your Health Savings Pass: • Only $9.99 for a 90-day supply of over 400 generic prescriptions (see list) 10% off at MinuteClinic on any regular priced healih service or screening • Save at one of our more than 6,300 CVS/pharmacy locations nationwide. • Allergy • Arthritis & Pain • Asthma • Cholesterol • Diabetes • Fungal Infections Gastrointestinal Health • Mental Health • Skin Conditions • Thyroid Conditions • Viruses • Vitamins & Nutritional Health BUENOu don't have preseripionIdrug Gove agere your coverage is limited=you could gain signcanta savings. If your current prescription is one of the over Luudencrie medications in the program you can errol today and save... HORA.Uchoas the Health Savinus Pass cost2. Women's Health The cost is only $10 annually. per person. YOUE merfbers zip will be automatically bemeneteach yea and you will be charged the applicable tee BE • Glaucoma & Eye Care • Heart Health & Blood Pressure And many more (see complete list - available at pharmacy or online) Will always pay $9.99 for each prescription? VOLVO 9.99 for a side suppo e DDT BOCICATRİcations Identified on the TUCULIS 3:90-day sugp. quantities which exceed the VOICE prescrised 90-dayiquanatles, the amount may 09 pro-rated Prices may vary in certain states See yours Pharmacy for details. 3 SHERIT Sign up. Start saving. Can I use my Health Savings Pass with my current prescription coverage plan on the same prescription or medical services Simple ways to sign up for savings. 1BI- HOLDTEISEDomen M E REDDERECE to ou DSCE. 2 Online SGV5.colhealthsavingspass 3. Brahene m888-616-CARE 12273 You ca. 220 UCALYPS 410bisibeis sous ditable 1025 TILSTUNA minute CVS SELLOS pharmacy HE ISINI Houmise then use our Healin savagsass ozomer Insurance The CIS/pharmacy lealta Saunys Pass cannot be used in compunction with other insurange on the saine prescription. QIE 0 Are generic medications the same as brand name medications? Easy. Accessible. Affordable. We're doing what we can to make health care a little easier and more affordable for busy people like you. With the CVS/pharmacy Health Savings Pass, you can save 10% at MinuteClinic on any regular priced health service or screening. Our board-certified practitioners are trained to diagnose and treat common family illnesses as well as give vaccinations and health screenings. • No appointment necessary • Open 7 days a week, including evenings. Most services starting at $59 Yes. Generic medications are sale elecure EDD Oved by the FDA. They work the same way imout advias adama nimedica lung. DER TETER This program is NOT health insurance. A $10 per person enrollment fee is required annually. You may cancel your membership within 30 days from receipt of your membership card and materials, for a full refund. Void where prohibited by law. Prices may vary in ceriain states. $9.99 pricing based on commonly prescribed doses. List is subject to change without notice. For complete terms and conditions, see store for details. Hi have more questions, who dolask? Ask your phanizacisteor call 888-616-CARE (2273 * Up to $10 per person, per visit. MinuteClinic discount not available in Florida CVSC-0397708 3 4. From February 2004-May 2009, I worked for Aetna. I joined Aetna as Head of Planning & Business Strategy, Medical Products, in which I built a new business unit responsible for business development, setting strategic direction, and leading mergers and acquisitions across multiple products. In October 2006, I became Vice President, Pharmacy Networks, and assumed responsibility for three operations: provider infrastructure, provider relations and contracting, and quality management. During my tenure, Aetna, one of the largest health insurance companies in the United States, operated in-house PBM services to administer the prescription-drug component of Aetna-sponsored health plans, and I was the Vice President in charge of the PBM part of the company. In that position, I oversaw a team of approximately 55 employees. 5. Collectively, I have over 15 years of experience working in the pharmacy and PBM industries. This experience includes but is not limited to: negotiating contracts and managing relationship with network pharmacies, managing pharmacy audit functions, and relationships with both providers of pharmacy related services and the payer community. The Aetna/CVS National Pharmacy Services Agreement 6. In my capacity as Vice President, Pharmacy Networks at Aetna, I negotiated and signed a new national agreement with CVS Pharmacy, Inc. ("CVS")—the National Pharmacy Services Agreement (Jan. 15, 2009) between CVS and Aetna Health Management, LLC (the "Agreement"). The Agreement set forth the general terms and conditions governing CVS's relationship with Aetna. 7. CVS and Aetna began negotiating the Agreement as early as 2008. The negotiations involved multiple individuals from both organizations. I recall at least Beth Curran (Director, Network Performance & Evaluation), Alan Maesaka, (in-house counsel) and Erin Schlitt (in-house counsel) participating on behalf of Aetna, and Elizabeth Wingate, Sharon Edmunds, and Tina Egan participating on behalf of CVS. 8. During our negotiations, I learned that CVS was launching a generic drug membership program called Health Savings Pass ("HSP") which would offer members a set price-point on a specified list of generic medications. The membership-program model was used at the time by several pharmacies to make generic drugs available to price-sensitive shoppers (e.g., Walgreens's Prescription Savings Club). A. $ 1.54 – "Usual and Customary Retail Price" 9. My team and I were aware that CVS did not submit its HSP price as its usual and customary ("U&C") price on claims for Aetna insureds. First, I had a general awareness that prices charged by pharmacies like CVS and Walgreens in their membership programs were not being submitted as the pharmacy's U&C price. Second, CVS advised me of this fact in writing 10. Specifically, during our negotiations with CVS, on or about December 15, 2008, I received an email from CVS's Sharon Edmunds describing HSP and attaching marketing materials for the program, including a sample membership card and the enrollment form listing the program's terms and conditions. At the time, Ms. Edmunds was Aetna's day-to-day contact 3 for our relationship with CVS. In her email, Ms. Edmunds advised that HSP "does not constitute (CVS's] Usual and Customary Pricing." The email and attachments are appended as Exhibit A. 11. I did not find CVS's position—that the HSP program price was not CVS's U&C price surprising or remarkable. By the time CVS had launched HSP, other pharmacies' membership programs, such as the Walgreens program, were available in the marketplace. To the best of my recollection, Aetna did not require those other pharmacies to submit their program prices as U&C on Aetna claims either. 12. I agreed with CVS that under our Agreement, CVS did not need to submit the HSP program price as its U&C price." 13. Specifically, the Agreement defined "Usual and Customary Retail Price" as: "The cash price less all applicable customer discounts which Pharmacy usually charges customers for providing pharmaceutical services." Agreement $ 1.54. First, because HSP required enrollment and charged a fee, the HSP price was not CVS's "cash price," meaning the retail price CVS would charge ordinary customers without a form of prescription benefit (e.g., insurance, a cash discount card, or a membership program). Second, the HSP program price was not an "applicable customer discount," as we understood that phrase. HSP benefits were available to enrollees in Cys's program, not to all CVS customers without a form of prescription benefit. B. $ 4.1.4 – "Pharmacy Obligation to Submit Claims" 14. The Agreement that I negotiated with CVS made explicit reference to the HSP program. It did so in Section 4.1.1, which states in relevant part: Pharmacy shall process and adjudicate all claims for Pharmacy Services and is not obligated under this Agreement to process claims under the CVS Health Savings Pass Program Agreement $ 4.1.1. I recall this provision in particular being the subject of negotiation in late 2008/early 2009. 15. In October 2008, Aetna's then-current draft of the Agreement proposed language in Section 4.1.1 that would have required CVS to "process and adjudicate all claims on-line, regardless of Pharmacy's own internal discount or reduced price programs." See Draft Contract Sent by J. Zavalishin to E, Wingate (Oct. 20, 2008), at 13 [CVSC-0271054-0271143). This provision was an attempt to ensure that Aetna would have visibility, for clinical purposes, into all prescriptions filled by beneficiaries of Aetna health plans. This position was not different from Optum's position: CVS was not required under its agreements with Optum to report its HSP program price as its U&C price. See Declaration of Michael D. Reichardt (Nov, 20, 2016). 3 16. I recall CVS asking Aetna to modify the proposed language of Section 4.1.1 to make clear that prescriptions purchased under CVS's HSP program would be exempt from the claim- submission requirement, in the event an Aetna insured had joined HSP and chose to fill a prescription under the program instead of through his or her insurance benefit. Although there was interest in seeing those claims, I understood CVS to have operational barriers that prevented them from submitting those claims to Aetna. Accordingly, we agreed to modify Section 4.1.1 to exclude HSP purchases from those claims required to be submitted to Aetna under the Agreement. Executed this 22nd day of February, 2017, in Schaumburg, Illinois. Joen Joseph C. Zavalishin 3 Exhibit A 3 From: Edmunds, Sharon Sent: Mon 12/15/2008 4:12 PM (GMT-05:00) To: Zavalishin, Joseph C Cc: Bcc: Subject: FW: CVS Health Savings Pass Program -- template for summary of program Attachments: 06839RXS08 WallboardHSP.PDF; HSP CardBlue v5.pdf; CVS02214 HSPBrochure final.pdf Joe, enclosed is the material/ info we discussed on health savings pass. SAMSUN NEW WAVON VARI E REN From: Egan, Tina L. Sent: Friday, December 12, 2008 4:56 PM To: Wingate, Elizabeth S. Subject: FW: CVS Health Savings Pass Program -- template for summary of program my template for explaining the program DRAFT Thank you for giving CVS/pharinacy the opportunity to review with you the new CVS Health Savings Pass Program that has recently been launched in our markets across the country. CVS is introducing this program to combat the generic discount programs that have entered the Corcoran - CONFIDENTIAL CVSC-0397702 3 market place over the last 2 years. Additionally, given the economic changes that have taken place over the last several months, we feel that this is the right time to provide some additional prescription savings to the many cash strapped individuals and families around the country. Because CVS has a strict policy against price matching, we needed to develop a program that both provides value to compete against the discount pricing already in the market place and provides the economic plan parameters that make the program sustainable for CVS. CVS' program is very different from the discount pricing Wal-Mart and others have introduced and therefore it does not constitute Usual and Customary pricing for our Medicaid clients. Attached are the materials for the program. This program is being marketed to CVS' customers. There is an enrollment process. Our customer tells us whether she wants to join the program. It is an "opt in" prograin, and CVS does not automatically enroll anyone into the program. There is a $10 per person enrollment fee per year. The amount of the enrollment fee was carefully chosen, and plays a key role in the economic sustainability of the program for CVS. If a CVS customer decides to enroll in the CVS program, and pays the enrollment fee, she can typically receive up to a 90 day quantity of a prescribed drug (from a list of approximately 400+ generic prescription drugs that CVS will offer) for $9.99. A CVS customer who has enrolled in the program and paid her enrollment fee can also get a 10% savings (up to $10) for medical services provided at our Minute Clinic, if she pays cash for the Minute Clinic service. No vouchers or in-store coupons are be provided. CVS pharmacists are not permitted to waive the enrollment fee. Should you have further questions, please contact me directly. Tina L. Egan, J.D. Vice President - Health Care Regulatory CVS CAREMARK CORPORATION office phone - 401.770.4865 fax - 401.652.1218 mobile phone - 401.480.8937 This email is confidential and intended for the named recipient(s) only. If you receive it in error, please notify sender and delete the communication. Thank you. Corcoran - CONFIDENTIAL CVSC-0397703 3 Corcoran - CONFIDENTIAL CVSC-0397704 3 A F S G ! EL AND !! - an DAVID We DELET GER B DANA S HE PER M HECHT !!!! !! !! Wave WA No prescription coverage? !!!! ACTRIEREN !!!! GREE CEFEATHERCHE MEGANE ALE ri L HAS EFTIMOROLFIGE Elle at cialist Fo Tiedai EXTERIES LLLLLLLLL TE No problem. 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AENEATURESEXANDRA VINE SALLE ANSES MI ASEMASSVIN D ER GALLARMA ROM:14: ERINO CLONAS 1 www i ch RX3 CITID SKOLE ADRESOARE LATOHEN CENTEREDETIMETEC L ixed Blad SMK BREALESTRARREHR A XDIRARAUDSAM MIERLAUBNINLESSINATURALMENTE P RESSU R E vur: HO HELLE 2018 R EPRESENTERADE introducing the new CVS Health Savings Pass sign up and save! REN Lucr PERCUSSE ! OSE TEVE SAINS A SALANDA BENEME SINAISSSSSSS ALEGRE SELL PRIHRE YAMS es S SORS TONELLA see pharmacist for details SILISERADESH OSTAL: SKIPS RE .. MERCATERIER. . UAH aco CEH RSS DIENES ROTARASA TENTIJDSBUT.. TARS .! E EEEEEEE Solid LIGUE.. ! WISHESALUT AN فیات و علاج التهابات SPRISEN SAILING AREA STEROPTICOS P AERULARRA SAUCETINETTERIE MOOISTE SERVERTINI STRAINTS resini ELE HULLE RELCZW SSESS. COM ORRIDOBILIER ANTRA REDA E SREDSNATURAL SEIFE! SOFERI JRUS ENERAL NELIS ti'i CA AN S2 CVSC-0397705