Exhibit 10.1

 

SECOND AMENDMENT TO

PRIME VENDOR AGREEMENT

 

This Second Amendment (“Second Amendment”) is made and entered into as of
August 1, 2015 (“Second Amendment Effective Date”), by AmerisourceBergen Drug
Corporation, a Delaware corporation (“ABDC”) on the one hand, and Diplomat
Pharmacy, Inc., a Michigan corporation (“Diplomat”) for itself and on behalf of
the following limited liability companies of which Diplomat is the sole member:
Diplomat Specialty Pharmacy of Flint, LLC, Navigator Health Services, LLC,
Diplomat Health Services, LLC, Diplomat Specialty Pharmacy of Chicago, LLC,
Diplomat Specialty Pharmacy of Ft. Lauderdale, LLC, Diplomat Specialty Pharmacy
Great Lakes Distribution Center, LLC, Diplomat Specialty Pharmacy of Southern
California, LLC, and Navigator Pharmacy Service, LLC (Diplomat and such limited
liability companies being referred to herein collectively as “Customer”) on the
other hand.  This Second Amendment amends the parties Prime Vendor Agreement
(“PVA”) dated January 1, 2012, as previously amended on July 20, 2012.
Capitalized terms that are not defined in this Second Amendment have the
meanings ascribed pursuant to the PVA.

 

The parties wish to amend the PVA as follows:

 

1.              Joinder of Burman’s. The parties recognize that on or about
June 19, 2015, Customer acquired each of Burman’s Apothecary, L.L.C. and
Burman’s Media Pharmacy, LLC (collectively “Burman’s”) and Burman’s desires to
receive pharmaceutical Products and Services from ABDC under the terms and
conditions of this PVA.  Burman’s agrees that the term “Customer” in the PVA
shall refer to Burman’s.  Burman’s agrees that by executing this Second
Amendment, it hereby (i) adopts the PVA and agrees to assume and be bound by all
the terms, conditions, covenants, responsibilities and provisions thereof and
(ii) and all related instruments, agreements and documents; (ii) execute and/or
deliver such instruments, agreements and documents as ABDC may reasonably
require to effectuate the intents and objects of this provision.

 

2.              Paragraph 7 (Term of Agreement) is amended to delete
“December 31, 2016” and replace it with “September 30, 2017”, which will be
referred to as the Initial Term.

 

3.              Paragraph 1.A. of Exhibit 1 to the PVA (Program Fees — Price of
Goods) is deleted in its entirety and replaced with the following provisions
below.  For the avoidance of doubt, the parties reaffirm that there is no change
to the Exhibit 1 lead-in paragraph that is directly above Paragraph 1.A.

 

(A)                               Price of Goods and Cost discounts.

 

(i)                                     Customer’s Price of Goods for Products
(other than those Product Categories noted in the grid below, Special Priced
Products and Biosimilar Rx) will be the Product’s Cost (as defined below) as
adjusted by monthly PRxO Generics Net Purchases.

 

Price of Goods is based in part on Customer’s elected payment terms of 30 DSO
(as described in Paragraph 2.A. of Exhibit 1) as well as Customer making minimum
annual Net Purchases of $1,800,000,000 (of which at least $2,500,000/month will
be PRxO Generics Products). This monthly requirement of PRxO Generics purchases
replaces the 98% requirement set forth in Paragraph 3(A)(i) of the PVA.

 

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ABDC will add to the billed amount any applicable sales, use, business and
occupation, gross receipts or other tax. Customer will promptly return to ABDC
non-disposable equipment and material (e.g., totes, padding, pallets,
packs/coolers/insulation, monitors/loggers) or pay replacement cost of items not
returned within five business days.

 

PRODUCT CATEGORY

 

COST

 

Brand Rx (Excluding Enbrel))

 

[*]

 

Enbrel

 

[*]

 

OTC (Excluding ABDC’s private label OTC)

 

[*]

 

Drop Ships (Regardless of Product Category. Only includes purchases made from
ABDC and not from any affiliate of ABDC)

 

[*]

 

 

(ii)           “Cost” for any non-contract Product means the price of the
Product on a supplier’s price list (also known as Wholesale Acquisition Cost
(WAC)) and, for any contract Product, means the applicable Customer/GPO contract
price authorized by a supplier and maintained in an ABDC bid file for any
contract Product. In all cases, Cost (or WAC) is determined on the date Product
is allocated to Customer by ABDC and is calculated after excluding any discount
for prompt payment given to ABDC by its suppliers.

 

(iii)          ABDC “Special Price Products” includes [*].  Special Price
Products will not be priced based upon ABDC’s Cost but will instead be priced on
terms set by ABDC from time to time for such Products. Customer may purchase the
Special Price Products outside of ABDC, with such purchases excluded from
Customer’s Primary Vendor requirement.  Special Price Product purchases from
ABDC will count toward total periodic Net Purchases.

 

For the avoidance of doubt, Special Price Products do not include:  (a) Drop
Ships, (b) any Products listed on Appendix A to this Second Amendment or (c) any
new brand Rx Products that are introduced into the marketplace after the Second
Amendment Effective Date (“New Brand Rx Products”).  Pricing for such Products
specified in clauses (a) through (c) shall be per the Price of Goods table in
Paragraph 3(A)(i) above; provided, however, if the supplier of any New Brand Rx
Product has extended  economic terms  to ABDC that are less favorable than the
least favorable term from the same supplier for other brand Rx Products, then
such New Brand Rx Product shall be deemed a Special Price Product, and the
parties will negotiate in good faith the applicable Price of Goods for such New
Brand Rx Product.

 

(iv)                              Biosimilar Rx means a prescription-legend
pharmaceutical biological product designated by the FDA, as revised from time to
time, as “biosimilar” to or “interchangeable” with an FDA-licensed biological
product, and which may be manufactured through biotechnology, or derived from
natural resources, or produced synthetically, and includes products such as
vaccines, blood and blood components, allergenics, somatic cells, gene therapy,
tissues, and proteins.  The parties acknowledge that, as of the Second Amendment
Effective Date, the

 

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* Information redacted pursuant to a confidential treatment request by Diplomat
Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act
of 1933 and submitted separately with the Securities and Exchange Commission.

 

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various market factors used generally to establish Price of Goods for Products
remain uncertain with respect to Biosimilar Rx.   As a result, the parties agree
that, for those Biosimilar Rx Products that ABDC will carry in inventory for
distribution to its customers, at the time each such Biosimilar Rx Product is
made available for purchase in the market by the applicable supplier, the
parties shall meet and negotiate in good faith a Price of Goods for the
particular Biosimilar Rx that reflects their reasonable financial expectancies
under the PVA.

 

4.              The parties acknowledge and agree that Paragraph 1.F. of
Exhibit 1 (Market Competitiveness) has been satisfied by way of this Second
Amendment and is deleted in its entirety as of the Second Amendment Effective
Date.

 

5.              Paragraph 2.A. of Exhibit 1 (Payment Terms) is deleted and
replaced with the following:

 

Customer agrees to Net 30 DSO payment terms, meaning that payment for purchases
made the first of the month through the 15th of the month are due on or before
23 days from a Semi-Monthly statement date, and purchases made from the 16th of
the month through the end of the month are due on or before 23 days from end of
month statement. Payment must be made by EFT or a surcharge will apply.

 

6.              The following new provision and rebate is added to the PVA as
Paragraph 1.G. of Exhibit 1:

 

Customer is eligible to receive a one-time rebate equal to a [*]% discount off
of its first $[*] in Net Purchases made following the Second Amendment Effective
Date.  This volume rebate will be paid and applied by ABDC as a $[*] credit to
Customer’s account within 10 days of being earned.

 

7.              The following new provision and PRxO Generics rebate is added to
the PVA as Paragraph 1.H. of Exhibit 1:

 

PRxO Generics Rebates.  Within 30 days after each month during which Customer
met the Prime Vendor requirements and made PRxO Generics Net Purchases of at
least $2,500,000, ABDC will issue a credit to Customer on Net Purchases of
eligible PRxO Generics during the month per the below grid (“PRxO Rebate”). 
Only one level of rebate is credited based on Customer’s Net Purchases of PRxO
Generics during the month, without carryover, as pro-rated for partial months. 
Eligible PRxO Generics exclude drop ship, unit dose, injectable, specialty and
biosimilar products.

 

PRxO Generics Net Purchases During Month

 

PRxO Rebate %

 

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

to

 

$

[*]

 

[*]

%

$

[*]

 

&

 

Above

 

[*]

%

 

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* Information redacted pursuant to a confidential treatment request by Diplomat
Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act
of 1933 and submitted separately with the Securities and Exchange Commission.

 

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8.              Paragraph 3.A. of Exhibit 1 is amended to reflect the parties
understanding that Customer will make Net Purchases of at least $1,800,000,000
per contract Year commencing after this Second Amendment Effective Date.

 

This Second Amendment is the complete understanding of the parties with respect
to its subject matter and supersedes all prior or contemporaneous communications
between the parties concerning such subject matter.  If there is any conflict
between the terms of this Second Amendment and the PVA, this Second Amendment
shall control, provided that this Second Amendment references the provision in
the PVA that it is intended to modify. Following the Second Amendment Effective
Date, the PVA (as amended) remains in full force and effect. This Second
Amendment shall be governed and construed according to the choice of governing
law pursuant to the PVA.

 

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IN WITNESS WHEREOF and intending to be legally bound hereby, the duly authorized
representatives of the parties have executed this Second Amendment to be
effective as of the Second Amendment Effective Date.

 

AmerisourceBergen Drug Corporation

 

By:

/s/ Barry Sandler

 

Name:

Barry Sandler

 

Title:

V.P. Strategic Accounts

 

 

Diplomat Pharmacy, Inc., for itself and on behalf of the following other
entities of which Diplomat Pharmacy, Inc. is the sole member:

 

Diplomat Specialty Pharmacy of Flint, LLC

Navigator Health Services, LLC

Diplomat Health Services, LLC

Diplomat Specialty Pharmacy of Chicago, LLC

Diplomat Specialty Pharmacy of Ft. Lauderdale, LLC

Diplomat Specialty Pharmacy Great Lakes Distribution Center, LLC

Diplomat Specialty Pharmacy of Southern California, LLC

Navigator Pharmacy Service, LLC

 

By:

/s/ Gary W. Kadlec

 

Name:

Gary W. Kadlec

 

Title:

President

 

 

ACKNOWLEDGED AND AGREED BY:

 

 

 

 

Burman’s Apothecary, L.L.C.

 

 

 

 

By:

/s/ Gary W. Kadlec

 

Name:

Gary W. Kadlec

 

Title:

President

 

 

 

 

Burman’s Media Pharmacy, LLC

 

 

 

 

By:

/s/ Gary W. Kadlec

 

Name:

Gary W. Kadlec

 

Title:

President

 

 

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Appendix A to Second Amendment

 

Effective August 1, 2015, the following products will be considered Brand Rx:

 

Product Description

 

NDC

 

UPC Barcode

 

 

 

 

 

 

 

[*]

 

[*]

 

[*]

 

 

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* Information redacted pursuant to a confidential treatment request by Diplomat
Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act
of 1933 and submitted separately with the Securities and Exchange Commission.

 

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