COUNTY OF SAN MATEO

Inter-Departmental Correspondence

San Mateo Medical Center

 

DATE:

March 12, 2007

BOARD MEETING DATE:

April 10, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

 

TO:

Honorable Board of Supervisors

FROM:

Nancy J. Steiger, Chief Executive Officer, San Mateo Medical Center

SUBJECT:

Agreements with Anchor Drugs and Baneth’s Pharmacy

RECOMMENDATION:

Adopt a Resolution authorizing:

 

1)

the execution of three Agreements with Anchor Drugs to provide pharmacy services to patients of the Mike Nevin Health Center; the South San Francisco Health Center; and the Fair Oaks Family Health Clinic, each for a term of April 1, 2007 to March 31, 2010, and each with a maximum amount payable of $360,000;

 

2)

the execution of an Agreement with Baneth’s Pharmacy to provide pharmacy services to patients of the Willow Clinic for the term January 1, 2007 to December 31, 2009, with a maximum amount payable of $360,000;

 

3)

the Chief Executive Officer of San Mateo Medical Center or designee to execute contract amendments increasing maximum fiscal obligation by no more than $25,000 (in aggregate), per agreement and/or modify the contract terms and/or services so long as the modified term or services is/are within the current or revised fiscal limits.

 

VISION ALIGNMENT:

Commitment: Ensure Basic Health and Safety for All

Goal 5: Residents have access to healthcare and preventive care.

The Agreements contribute to this commitment and goal by providing increased access to quality pharmacy services at reduced rates to SMMC’s patient population.

 

Performance Measure(s):

Measure

FY 2005-06
Actual

FY2006-07

Projected

FY 2007-08
Projected

Number of prescriptions filled by contract pharmacies

77,764

81,652

85,735

 

BACKGROUND:

A Request for Proposals (RFP) for pharmacy services was conducted in November, 2006. Two vendors responded to the RFP. SMMC is recommending that the County contract with both vendors due to the location of the pharmacies with respect to its clinics, a willingness by the pharmacies to participate in the federal 340B pharmacy discount drug program, and SMMC’s successful history of working with these two pharmacies under the 340B pharmacy discount drug program.

There have been two previous Agreements with Baneth’s Pharmacy. The first was to provide service to the Willow and Belle Haven Clinics for a term of October 1, 2003 to September 30, 2006 with a maximum amount payable of $90,000. The second Agreement was signed in August, 2006 for Baneth to provide service to the Willow and Fair Oaks Clinics. However, Baneth informed the County in September, 2006 that they would be going out of business. Baneth was subsequently taken over by new owners.

There have been previous Agreements with Anchor Drugs to provide service to the South San Francisco Clinic and the Mike Nevins Clinic. The Agreements for service to the South San Francisco Clinic were for a term of October 1, 2003 to September 30, 2006 for a maximum amount payable of $60,000; and for a term of October 1, 2006 to December 31, 2006 for a maximum amount payable of $25,000. The Agreements for service to the Mike Nevins Clinic were for a term of October 1, 2003 to September 30, 2006 for a maximum amount payable of $99,000; and for a term of October 1, 2006 to December 31, 2006 for a maximum amount payable of $25,000.

When Baneth went through a change in ownership, Anchor signed Agreements to provide service to Fair Oaks and Willow Clinics, both for a term of October 1, 2006 to December 31, 2006 for a maximum amount payable of $25,000 each.

 

DISCUSSION:

SMMC is requesting an approval for three separate contracts with Anchor Drugs

because the federal 340 B program requires a separate contract with each facility.

Anchor Drugs will provide pharmacy services to patients of the Mike Nevin Health

Center, the South San Francisco Health Center and the Fair Oaks Family Health

Center. Baneth’s Pharmacy will provide pharmacy services to patients of the Willow

Clinic. In accordance with the regulations which govern the federal 340B pharmacy

discount drug program, Anchor Drugs will be responsible for ordering, storing,

inventory and dispensing of medications to patients of the Mike Nevin Health

Center, the South San Francisco Health Center and the Fair Oaks Family Health

Center. Baneth’s Pharmacy will be responsible for ordering, storing,

inventory and dispensing of medications to patients of the Willow Clinic.

Anchor Drugs was chosen for its proximity to North County Health Center

and South San Francisco Health Center and its commitment to SMMC’s patient

population. Anchor is opening a temporary drop off and pick up location near the

Fair Oaks Family Health Center and will open a full service pharmacy within 90

days. Baneth’s Pharmacy Drugs was chosen for its proximity to the Willow Clinic

and its demonstrated commitment to SMMC’s patient population.

The term of the Agreements with Anchor Drugs is for a different time period than the

term for Baneth’s Pharmacy because an amended Agreement was approved by the

County Manager’s Office in order to allow for the payment of invoices from Anchor

Drugs. Funds had been exhausted on the Agreement with Anchor Drugs that

expired on December 31, 2006. The amended Agreement extended the term to

March 31, 2007 and increased the funding by $25,000.

These Agreements will help to address SMMC’s immediate and long term issue of

increasing pharmaceutical costs. As SMMC’s volume continues to grow,

quality pharmacy care is a critical component of the effective treatment of San

Mateo County residents. Cost effective collaboration with community pharmacies

allow for increased access and less interventional healthcare. Purchasing

medications at a reduced rate permits the Medical Center to use funds that would

otherwise go to medication expenses for other programs.

The contractor has assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits.

County Counsel and Risk Management have reviewed and approved these agreements.

 

FISCAL IMPACT:

The term of the Agreements with Anchor Drugs is April 1, 2007 to March 31, 2010. The term of the Agreement with Baneth’s Pharmacy is January 1, 2007 to December 31, 2009. The maximum amount the County shall be obligated to pay under each agreement is $360,000 for the three year term. Funds are included in SMMC’s FY2006-07 budget. Funds will be included in SMMC’s future year budget requests.

Exhibit A

1.

General Description of RFP

    Provide prescription drug services and fulfill all of the regulatory requirements as set forth by California Business and Professions Code 4126 and the laws that govern the practice of pharmacy in the State of California. This includes, but is not limited to, a required California license or certificate.

    Comply with statute regulations and other authorities that govern the federal 340B pharmacy discount program.

    Dispense only medications approved in the SMMC WELL Formulary.

    Provide access to Contractor’s records for the purpose of verifying appropriate purchasing and dispensing records.

    Enter into a “ship to/bill to” arrangement with the clinic under which the pharmacy will order covered 340B drugs and receive shipment, maintain inventory and controls, dispense such drugs on behalf of clinic only to eligible clinic outpatients, and charge and collect for such drugs, all on clinic’s behalf, and clinic will be billed and will pay for such drugs, in compliance with applicable laws and regulations.

    Provide reports required of the County for billing and auditing purposes

2.

List key evaluation criteria

    Location of the pharmacy with respect to the Clinics served.

    Willingness to participate in the arrangement

    History of providing this type of service

3.

Where advertised

Direct mail to local pharmacies.

4.

In addition to any advertisement, list others to whom RFP was sent

Anchor Drugs

Baneth’s Pharmacy

Drew Pharmacy

Menlo Park Pharmacy

5.

Total number sent to prospective proposers

4

6.

Number of proposals received

2

7.

Who evaluated the proposals

Gary Horne, Jonathan Mesinger, Sang Chang, Dionne Miller

8.

In alphabetical order, names of proposers (or finalists, if applicable) and location

Anchor Pharmacy

Attn: Raymond Jajeh

Anchor Drugs

481 Grand Avenue

South San Francisco, CA 94080

Baneth’s Pharmacy

Baneth’s Pharmacy

Attn: Sagee Thirucote

2021 Rockport Avenue

Redwood Shores, CA 94065