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October 23, 2025 City Council Regular Meeting
Title
22. Authorize the City Manager to Execute a Contract for a Pharmacy Benefit Manager with Maxor in an Amount Not to Exceed $29,459,106. (Human Resources)
Strategic Priority
GOAL 5: Improve Quality of Life by Raising Municipal Service Standards
Description

This is for an annual renewal of the Pharmacy Benefit Manager with Maxor in an amount not to exceed $29,459,106.  This describes the City of Savannah’s strategy to reduce pharmacy costs through an average script pricing model.

The existing contract is used by the City of Savannah to provide pharmacy prescription services for the self-funded pharmacy plan. The premium coverage is calculated based on an average script price per prescription in the City’s self-funded pharmacy plan.

In 2018, the City of Savannah paid for pharmacy costs through CVS Caremark’s wholesale script pricing (WSP) model. Through this model, the City achieved an Average Script Price of $83.93 for our general drugs. For our volume of business, the market Average Script Price (RFP competitive market) for the general drug is $55 to $60. For this reason, the City employed the use of an Average Script Pricing model (ASP) through the pharmacy market. ASP creates a competitive environment for the Pharmacy Benefit Manager to bid an average script price versus an unpredictable number such as $83.93. The strategy enables the City to transfer the risk of rising costs, managing inflation, budgeting effectively, and keeping our benefit costs low each year for our employees.
Through this approach, the City of Savannah has saved over 8 million dollars since 2020. 


As a result, we recommend approval of a contract for pharmacy services with Maxor for 2026-2028.  Based on estimated future spend and historical claims data, the City of Savannah’s pharmacy plan is projected to cost the City of Savannah $29,459,106 from 2026-2028. The total guaranteed cost savings from this three-year contract is nearly $3 million.  Delivery: As-Needed.  Terms: Net 30 days.  The vendor: 

B.P. Maxor (Amarillo, TX) (D) $29,459,106.  

(D) Indicates non-local, non-DBE business.  

 

Recommendation

Approval 

Contact
Jeff Grant, Senior Director of Human Resources
Financial Impact
Expenditure of $29,459,106 from Human Resources Funds
Review Comments
Attachments
Exhibit 1: Funding Verification - Pharmacy Benefit Manager.pdf
Exhibit 2: Purchasing Notes - Pharmacy Benefit Manager.pdf
Agenda Plus