Submitted By: Todd Swanson
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Presentation By: Todd Swanson
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Department: Human Resources and Risk Management
FORMAL TITLE:
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Fifth amendment to the agreement with ElectRx and Health Solutions, LLC, renewing the contract for a two-year term in an amount not to exceed $800,000
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
On November 21, 2016, the City entered into a Memorandum of Understanding with ElectRx and Health Solutions, LLC, for the provision of a voluntary international and specialty mail-order pharmacy program to allow eligible employees and dependents access to maintenance and specialty medications at reduced net costs. The program supplements the City’s self-insured health plan by providing an alternative for high-cost and maintenance medications that typically drive pharmacy spending.
Contract History:
• Original Agreement (2016): Approved November 21, 2016, establishing the City’s ElectRx program for a two-year term beginning January 1, 2017.
• First Amendment (2017): Expanded the program to include specialty drug coverage.
• Second Amendment (2020): Extended the agreement through December 31, 2022, and authorized future renewal periods.
• Third Amendment (2023): Renewed the agreement through December 31, 2024.
• Fourth Amendment (2025): Corrected a scrivener’s error and confirmed the renewal term through December 31, 2025.
FINDINGS AND CONCLUSIONS:
This Fifth Amendment extends the agreement for a two-year term, January 1, 2026, through December 31, 2027, and establishes a total compensation amount not to exceed $800,000. ElectRx has provided written consent to the renewal term as required under the Agreement.
The City has saved more than $500,000 in the last 15 months alone through this discount drug mail order program:
• 2024 savings of $480,538.70 = 334 RXs with an average savings per RX of $1438.73
• 2025 savings of $416,595.20 = 306 RXs with an average savings per RX of $1361.42
The program continues to generate meaningful savings for the City’s Health Insurance Fund by offering lower-cost access to brand-name and specialty prescriptions, which typically account for the most expensive classes of pharmacy spend.
Maintaining the ElectRx program ensures continued access to reduced-cost brand-name and specialty medications, supporting long-term cost containment within the City’s self-insured health plan. Staff recommends approval.
FISCAL IMPACT:
The Fifth Amendment authorizes expenditures not to exceed $800,000 for the two-year renewal term. Funds are budgeted and available in the Health Insurance Fund in account 627-099-999-590-81-45020.
PROCUREMENT REVIEW:
The amendment has been reviewed and approved in compliance with the City’s Procurement Policy.
LEGAL REVIEW:
This Agreement will be reviewed and approved for form and legality by City Attorney William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny