Mr. Kenneth Brynien, President

Public Employees Federation, AFL-CIO

1168-70 Troy-Schenectady Road

P. O. Box 12414

Albany, New York 12212-2414

Dear Mr. Brynien:

This letter will confirm the understandings reached by the parties during the negotiation of the 2007-2011 State/PEF Agreement regarding flexibility in the administration of the Empire Plan Prescription Drug Formulary.

Commencing with the plan-year beginning January 1, 2009, when deemed appropriate, the Empire Plan Prescription Drug Program Insurer/Pharmacy Benefits Manager (PBM) shall be permitted the following flexibility in the administration of the formulary:

• When clinically appropriate and financially advantageous to the Plan, the Insurer/PBM shall be allowed to place a Brand name drug on Tier 1, subject to the Tier 1 copayment;
• Certain therapeutic categories of prescription drugs with two or more clinically sound and therapeutically equivalent Tier 1 options, as determined by the Insurer/PBM, may not have a brand name drug in Tier 2; and
• Access to one or more drugs in select therapeutic categories may be restricted (not covered) if the drug(s) has no clinical advantage over other generic and brand name medications in the same therapeutic class. Drugs considered to have no clinical advantage that may be excluded include any products that 1) contain an active ingredient available in and therapeutically equivalent to another drug covered in the class; 2) contain an active ingredient which is a modified version of and therapeutically equivalent to another covered Prescription Drug Product; or, 3) are available in over-the-counter form or comprised of components that are available in over-the-counter form or equivalent.

All other Prescription Drug Program Formulary-administrative processes remain unchanged.

Sincerely, Countersigned for PEF:

John Currier Kenneth Brynien

Deputy for Contract Negotiation President

and Administration

Governor’s Office of Employee Relations

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