Rules of Membership

Rules of Membership

Innovatix Rules of Membership Policy

This Innovatix Rules of Membership Policy (“Policy”) sets forth the rules of conduct that apply to all Innovatix members with respect to participation in Innovatix’s group purchasing program and other value added programs. The requirements of this Policy are in addition to all terms and conditions contained in your Participation Agreement and replaces any previously adopted policies that addressed the subject matter hereof. Innovatix may adopt other policies from time to time that are specific to certain programs, group purchasing contracts, or classes or categories of contracts. This Policy and any other policies may be updated or adopted from time to time in the sole discretion of Innovatix.

Conduct Detrimental to Innovatix

Innovatix reserves the right to deny or rescind membership for any facility or organization that does not reflect the values or ethics of Innovatix or its membership. This includes activities that compromise the ability of Innovatix to deliver a competitive contract portfolio, including, but not limited to improperly using Innovatix’s confidential portfolio information, including pricing and other terms, to negotiate agreements directly between your facility or organization and a vendor. Innovatix shall have the right in its sole and absolute discretion to terminate immediately or deny the membership of any facility or organization whose involvement with Innovatix has the potential to damage the reputation of Innovatix and/or any of its affiliated companies.

Notice to Innovatix

Members must provide Innovatix with proper and timely written notice with respect to all matters that require notice in such Member’s Participation Agreement with Innovatix. Additionally, Members must provide Innovatix with written notice regarding any change in Member’s class of trade, change of address, or any revocation, suspension, debarment, or termination of any license, certificate, permit or approvals necessary for Member to operate its business, participate in any federal health care or other governmental program, or purchase products through the Innovatix group purchasing program or other programs.

In the event that Member provides timely written notice to Innovatix that it will not renew its Participation Agreement with Innovatix at the end of its term, or that Member is permissibly terminating its Participation Agreement, Member’s participation in the Innovatix group purchasing program and all other Innovatix programs will terminate as of such date, and Innovatix shall notify all wholesalers and distributors of such termination and instruct them to remove Member from Innovatix contract pricing.

Own Use

All items purchased through the Innovatix group purchasing program by Members shall be used for each Member’s “own use,” as that term is understood and defined in Abbott Laboratories et. al. v. Portland Retail Druggists Association, Inc., 425 U.S. 1 (1976), and that they shall not be sold to any third parties other than the appropriate customer and/or patient base for Member’s appropriate class of trade and must otherwise be used for purposes that are within the parameters of the Member’s appropriate class of trade, e.g., for treatment of the Member’s own patients. In addition, own use restrictions may be subject to a specific manufacturer’s own use policies. If products are sold to Member at a price that is established for a different class of trade, the manufacturer and/or wholesaler involved in the sale may, among other actions, seek to be reimbursed from Member for the difference in the price charged and the price, if any, that is available for Member’s appropriate class of trade.

Members are responsible for verifying that the information about their facilities’ stated classes of trade or service provider classification is accurate. Any misrepresentation about Member’s or any of its facilities’ class of trade or service provider classification may result in immediate termination of such Member’s participation with Innovatix. Except for agreements that allow sales to retail or mail order pharmacies, Members are not permitted to re-sell products purchased under Innovatix contracts, including, without limitation, that Member may not act as a wholesaler or make products available through any wholesaler or distributor arrangement. If a Member becomes aware that any of its facilities is inappropriately reselling or diverting products obtained under Innovatix contracts, Member should promptly contact Innovatix’s Vice President of Customer Care for determination of appropriate action.

Reporting Requirements

All Innovatix members must be in full compliance with all federal, state, or local laws, rules, or regulations regarding the reporting of certain discounts that it receives, including rebates, to third parties, including governmental entities, prescription drug plans, plan sponsors, pharmacy benefit managers, or other entities participating or providing services pursuant to the Medicare Prescription Drug Benefit. Contractual provisions contained in group purchasing contracts in the Innovatix portfolio with vendors may, from time to time, also require certain reporting obligations either by Members directly, or from Innovatix on Members’ behalf. Members must, if requested or required to do so by contract or law, fully and accurately disclose and appropriately reflect any discount, rebate or reduction in price that it receives in any cost report submitted to any governmental agency for the purpose of receiving reimbursement under any governmental programs including, without limitation, Medicare and Medicaid, or to any prescription drug plan, plan sponsor, pharmacy benefit manager, or other entity required by applicable laws or regulations. Members must also, upon request, make full and accurate reports or supply documentation to Innovatix regarding its purchases from manufacturers or its utilization as may be requested by manufacturers, distributors, and/or wholesalers listing the Innovatix contract numbers so that Innovatix can verify the volume of business done pursuant to its portfolio.

Rebate Payments

Certain vendors transmit rebate money to Innovatix on behalf of the entire Innovatix membership in one lump-sum check, for Innovatix to redistribute to each member. In the event Innovatix receives rebate money for any member in a de minimus amount of less than fifty dollars ($50), Innovatix will hold such amount on member’s behalf until such time as such member’s rebate account balance exceeds fifty dollars ($50). Additionally, at the end of each calendar year, Innovatix will pay rebates to all members that have rebate balances of greater than twenty dollars ($20) and will report rebate amounts to members throughout the year as rebates are received so they can satisfy their reporting obligations. If any Innovatix member has any questions regarding their rebate status please call Innovatix Customer Care.