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(iii) Both parties understand that pricing indices historically used (including under this <br />Agreement) for determining the financial components of pharmacy billing rates are outside <br />the control of CorVel and Customer. The parties also understand there are extra -market <br />industry, legal, governmental and regulatory activities which may lead to changes relating <br />to, or elimination of, these pricing indices that could alter the financial positions and <br />expectations of both parties as intended under this Agreement. <br />Both parties agree that, upon entering into this Agreement and thereafter, their mutual <br />intent has been and is to maintain pricing neutrality as intended and not to benefit one party <br />to the detriment of the other. Accordingly, to preserve this mutual intent, if pricing <br />neutrality does change and CorVel undertakes any or all of the following: <br />(i) Changes the AWP source, or other source if AWP is not applicable, across its book <br />of business (e.g., from Medi-Span to First Databank); or <br />(ii) Maintains AWP, or other source if AWP is not applicable, as the pricing index <br />with an appropriate adjustment in the event the AWP, or other, methodology <br />and/or its calculation is changed, whether by the existing or alternative sources; or <br />(iii) Transitions the pricing index from AWP, our other source if AWP in not <br />applicable, to another index or benchmark (e.g., to Wholesale Acquisition Cost); <br />Customer's negotiated PBM pricing will be modified as reasonably and equitably <br />necessary to maintain the pricing intent under this Agreement. <br />V. California Modification <br />On April 15, 2016, the State of California Depai anent of Industry Relations applied the new <br />Federal Upper Limit (FUL) index to the California Pharmacy Workers' Compensation Fee <br />Schedule. The new FUL index has resulted in a need for CorVel to modify our current pricing <br />structure based on the fee schedule changes and our contract language. <br />The FUL's impact and the modification is limited to generic drugs; brand drug pricing will not <br />change. As per our contract, the modification will maintain "pricing neutrality" between both <br />parties. <br />City of Everett, WA — CorVel EC Amendment 3 7-25-2022 <br />