Opinion ID: 1966598
Heading Depth: 1
Heading Rank: 5

Heading: Pharmacy Rebates

Text: Second, the trial justice found that after the bids were submitted, the State demanded that the parties guarantee the percentage of the pharmacy rebates they would be willing to return to the State for each year of the contract. Blue Cross stated that it would return 100 percent but could not guarantee that figure; United offered to return 80 percent of the rebates, but it, too, was unwilling to provide a guarantee. In the alternative, United offered to keep all of the rebates but to refund $4.50 PEPM in administrative fees. The State accepted United's alternative. The trial justice determined that the State modified the RFP by giving Blue Cross no credit for its unguaranteed offer to return 100 percent of the rebates and that it was improper for the State to change its method of scoring after the bids had been issued. Blue Cross argues that it had been giving the State 100 percent of the pharmacy rebates under the then-current contract, without a guarantee, resulting in nearly $2 million to the State in 2004. In H.V. Collins Co., 696 A.2d at 305, we held that a purchasing agent is entitled to consider the value of a bidder who makes cost-saving suggestions. Clearly, Hewitt and the State all found more value in United's offer to return a set amount in administrative fees than an unguaranteed offer to provide potentially higher pharmacy rebates. A business decision of this nature fell within the State's discretion, and the trial justice erred when she found otherwise. The trial justice concluded that, under Blue Cross's current system of refunding 100 percent of the rebates, the State stands to receive rebates totaling $2 million in 2004 alone. In the alternative, the trial justice calculated United's offer to return $4.50 PEPM as saving the State only $1 million for each year of the contract. What the trial justice overlooks, however, is that the purchasing agent, whose decision is entitled to a presumption of correctness, determined that an unguaranteed rebate offer was worth less than the certainty afforded by United. Although the State may well receive $2 million in rebates for 2004, there is no telling what could happen in the future and what percentage of that figure the State would receive in 2005, 2006, and 2007. Moreover, United's offer would result in reduced administrative fees and up-front cost savings, rather than in future rebates. It is not the role of the Judiciary to speculate or to second guess business decisions of this type. Because we perceive no palpable abuse of discretion as to this issue, we reverse the trial justice's determination.