Inter-Departmental Correspondence

Health Services Agency



September 10, 2004


December 7, 2004



Honorable Board of Supervisors


Charlene Silva, Director of Health Services



Amendment to the agreement with Diamond Drugs, Inc., dba Diamond Pharmacy Services



Adopt a resolution authorizing the President to sign an amendment to the agreement with Diamond Drugs, Inc., dba Diamond Pharmacy Services.



On December 18, 2001, your Board approved an agreement with Diamond Pharmacy Services to provide professional comprehensive pharmaceutical services for all prescription, non-prescription, and intravenous solutions as ordered by Correctional Health and Mobile Clinic physicians and dentists. The contract includes medications for topical, oral, IV and injectable use, inhalers, suppositories, and AIDS Drug Assistance Program (ADAP) medications. The total amount of the agreement was $885,000 for a two-year term from January 1, 2001 through December 31, 2003 with the option to renew the agreement for one additional year at the County’s sole discretion.


On August 5, 2003 your board approved an amendment with Diamond Pharmacy Services extending the term of the agreement for an additional year, through December 31, 2004, and increasing the agreement maximum by $1,020,000, from $885,000 to $1,905,000, to cover the cost of needed pharmaceuticals for Correctional Health and Mobile Clinic clients. The increase in the total amount was the result of in increase in the number and medical severity of the clients served, as well as a change in prescribing patterns and costs of psychotropic drugs, oral diabetic medications and antibiotics.

Diamond Pharmacy Services was selected to provide these services through a competitive RFP process conducted by the Health Services Agency in July 2001. An RFP was developed and advertised, resulting in three parties competing for the pharmacy contract. Diamond Pharmacy Services was chosen by the RFP review committee and awarded the contract for pharmaceutical services.



Correctional Health Services, Public Health and San Mateo Medical Center are in the process of evaluating the possibility of SMMC pharmacy providing medication through the Federal 340-B program to Correctional Health Services and the Mobile Clinic.


This second amendment ensures continuation of services until the analysis is complete and a determination is made either to proceed with participation in the 340-B program or to issue an RFP to acquire the pharmacist services and pharmaceuticals from a contractor. This second amendment extends the term of Diamond Pharmacy through June 30, 2005 and increases the contract maximum by $350,000, from $1,905,000 to $2,255,000, to cover services through this term.


Vision Alignment

The amendment to the agreement with Diamond Pharmacy Services keeps the commitment of Ensuring Basic Health and Safety for All and goal number 8- Help vulnerable people- the aged, disabled, mentally ill, at-risk youth and others- achieve a better quality of life. The amendment to the agreement contributes to this commitment and goal by providing pharmaceutical services to clients of Correctional Health and the Mobile Clinic.


Fiscal Impact

The contract term will be extended by six months to be January 1, 2002 through June 30, 2005. The agreement is increased by $350,000, from $1,905,000 to $2,255,000. The additional cost to Public Health is $35,000 and is covered by grant funding therefore there is no net county cost. The additional cost for Correctional Health is $315,000, which is not covered by outside funding and the total amount is the net county cost. These costs have been included in the approved Correctional Health and Public Health budgets for 2004-05.