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Exhibit L
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 2 of 21 PageID #: 77
BSF
March 9, 2018
Rather than engage in any good-faith dialogue, you started your letter by
saying that "the data show that Provider is operating a mail-order pharmacy". Of
course we disagree: All of the data that CZ Services has provided over the last
eleven months, in four rounds of letters and one meeting, shows just the opposite-
that CZ Services has never mailed anything. Concluding otherwise at the outset of
your letter is the opposite of meeting and conferring.
BSF
Mr. Adam Fuemmeler
March 6, 2018
Page 2
Throughout this process, CZ Services has been transparent and has complied
with every ESI request. Not only is it unreasonable for ESI to make a request of this
size with such a short turnaround (from ESI's own records you know that CZ
Services has filled roughly 80,000 prescriptions since 2015), but ESI is again
demonstrating that it has engaged in this entire process simply to create pretext and
eliminate what it perceives to be competition.
• Patients grant agency in one of two ways. Many patients register for
pharmacy services on the CareZone app, which requires the individual to
affirmatively grant agency and to agree to the terms of service. Patients who
do not come through the app speak with a customer support representative,
who asks the patient to verbally appoint Carezone to pick up and deliver
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 4 of 21 PageID #: 79
BSF
Mr. Adam Fuemmeler
March 6, 2018
Page 3
• A delivery company picks up prescriptions from the pharmacy and signs the
signature log for the patient, just as any other patient representative would
do. Once the prescriptions have been dispensed to the patient's agent (the
delivery company), the pharmacy has no visibility into the mechanics of
delivery to the patient. CZ Services does not have an agreement with the
delivery company. It is rare for the pharmacy to be notified that a patient has
not received her medications. If a patient reports that she has not received
her medications (for example, the address was invalid), the pharmacy works
to re-dispense the medications on an expedited basis.
With respect to the questions asked in your letter, CZ Services responds as follows:
• You ask for an explanation for the statement that "CZ Services serves a
vulnerable poly-chronic population of patients." The vast majority of
patients who come to CZ Services use the CareZone app, which is designed to
help chronically ill people manage their health. Because most people who
use the app are quite ill, most people who use the pharmacy are the same.
The average pharmacy patient is 56 years old and is taking five medications.
Close to 50% of the patients are on Medicare and/or Medicaid. The
pharmacy does not fill acute prescriptions-all of its patients are on long
term maintenance prescription regimens. In addition, CZ Services provides
pharmacy care for participants in federal PACE programs serving elder
populations, with the average patient taking eleven medications.
• The pharmacy provides three services that are unique to CZ Services. First,
when a new patient comes to the pharmacy, the pharmacy syncs their
medications so that they are all on the same refill cycle. Rather than getting
various medications throughout the month, the patient gets all of her meds
for the month on the same day. Second, the medications are packaged in pre-
sorted pill packets. Rather than receiving an assortment of vials that the
patient must sort herself, she receives pre-mixed packets with designated
times they are to be taken. Third, the medication schedule is reflected in the
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 5 of 21 PageID #: 80
BSF
Mr. Adam Fuemmeler
March 6, 2018
Page 4
patient's app, which reminds the user when to take her meds and tracks
adherence. The pharmacy's experience from talking to customers and
receiving customer feedback is that adherence dramatically increases for
patients using this system. (Customer testimonials are attached as Exhibit
D.) If ESI terminates CZ Services' contract, all patients with ESI as their PBM
will lose these benefits.
We propose, again, that the most fruitful way to resolve this dispute is to
meet so that we can answer any further questions you have. CZ Services' business
model is unique. Rather than responding to document requests and written
questions, the easiest path would be for us to have an in person discussion. You
have accommodated other pharmacies with unique models, like PillPack, and we ask
for the same consideration.
CZ Services genuinely hopes that ESI will come to the table and have a good
faith conversation. That being said, CZ Services reserves its rights to seek judicial
relief and share its complaint with regulatory agencies such as FTC and DOJ, notify
CMS on behalf of the affected Medicare and Medicaid patients, and notify Carezone's
three million users of the situation.
Sincerely,
Exhibit A
California Board of Pharmacy Inspection Reports
-· --- -·--.. .,. -----··· - -··- ·- · - - - · - ·- ·--·-·- - - · ·-· · · · · .-·.· .- ·- · -----··· ··
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 7 of 21 PageID #: 82
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alifornia State Board of Pharmacy sus1NEss, coNsUMERSERvic~s AND Hous1NG AGENCY
25 N. Market Blvd, Suite N219 Sacramento, CA 95834 DEPARTMEN'fOF CONSUMER AFFAIRS
one (916) 574-7900 GOVERNOR EDMUND G. BROWN JR
ax (916) 574-8618
w .pharmacy.ca.gov
INSPECTION REPORT
.Phannacy -~- ----- Hospital Phannacy Clinic Exempt Hospital _ Wholesaler , Hypodermic __
Phone: {8.±4l792:.2-119
Address: 8§0 tIA.R!3_0V_R_WAX.~Ql.JTH, STh_t::______ ___ _ City: _fil_G.f:Hv1QNJ.) . .. _ __ _ . _ Zip: _94_8.Q~- _
Ownership: CQfil>QMI!QN .
Pennit #: .P.~_5.J55t_ _ ___ Pennit Exp: DEA#: fC.5f_Q.2.5-~L - DEA Exp: 8/3.l!;ZQJ~ .
Date of Self Assessment Fonn: P~lfQJ~ _ Other Permit#: NfA. Date of DEA Inventory:
Hours M-F: ~11!.~.Q...lll. ______ •.. Hours Saturday .9AM.:2;J.!H~M.... Hours Sundlj!.y: __9A.M~2_;?._Qe_l'y1
JOANNAJRAO
------···"''"" -- ·-·-·-·····--- ..----- -. ··· - - - _Rf.H7H92. __ ___ _ ASHLEE_CDRBIN______ ______ ...CL.ERK... ___ _
HOLLY C KRAUSS
·~·- -·- -··-·----·-------·----·-· ._, ___ - J.~J>.I:I?.2,Jl_Q2,_ BEISY.GARCES.......... ----- ------·· .CLERK. .. . . _ ___
LEANNE M SNYDER
-----~ - -----····- · · -·-··- · ··- - ·-· -··- ··· -- .. -· ..·--·-·--
.. IQ'l:.I~_f.f!iL________ _ .B.RADL.E.YR S.TAEE.ORD...__ .TCH137220 ...
AKRAM_~- ~~Q![~_LI!-_______ J~PHl2,.5-<?!L. _____ _
.BR.ANDO.N.B.ODK____ ____ ---· .CLERK . __
NINA J CASTLE
-----····· ---·--·--··-·------·····-----------·· ·-···· -- - --- - .. Rf.J:I.4.~~----·---· · · CANDlCRJINSLEY.. .. _. _ ___ __ .CLERK..
RUNFEN YUAN
·· - - - ---·-----·- -·-••A•-··oO • ---··-· •o ••o• •••-•••••-•-•'" ••
..ll..PtIJi9.Q8_l ______
JEREMY D GERSPACHER __RPH?Q7J.4 _________ _ .CARL.O..CAMEO.S ------·-····--·--- _CLERK... __ . ..
- - - --- -~ -· -~------ ..-·- •·· ----- . .... - .CHAN.EL.HlLL_____ _ _ ----·-- .CLERK..___._______
TIENSLIE . ·· .. .. . -~~H64 70.~-------- · .
--- ---·-·~----
CHARLENE.MCWJLLIAMS ______ .CLERK _ . _
D.ANI.EL..A_CQRD.ERQ..MAN.S.Q._ ..I.CH129575... ___ _
DANIEL CORDERO..____ _______ . CI .ERK
D.ElO.HNA.SlMS._ ___ ___ CLERK. _ ______ _
.ERICAELIZO.ND.0 .. .....-------·--· --- _fLERK__________ ·-
ERMILYNB..SARAUS.tL.___ ... ....... TCH72Wl ____ _
ER.ANZ II !NOTS --- - -- --- - ---· _CL.ERK, __ ··--·----
_GAETAN P.MARIAN.0________ __ ___ _T.CH74112 ________ _
.GARREII..NEY...I.S_.J>ERRI.EN_____ .I.CH63.7.0.1 ___.__.__.....
.GERWIN.LSANCHEZ. ___________ _TCHl 060.69__ ___ _
HORTBNSE.RAND.OLP.H.. ___ ··-·-- . ..CLERK .. ... _
H.YEMLKIM___ .. _ ... _________ . .CLERK. _ ____ _
lANELl,E ROBl,ES______________ _ Cl.ERK
.JANETIR.KRULICK.. -· _ ______ __ __ ..cLERK - -- ·- · . - -··
.lONA.IHAN.RAMI._. _____ ,___ __CLERK._ . -··--- -··
California State Board of Pharmacy BUSINESS, CONSUMER SERVICES AND HOUSING AGENC,; i
1625 N. Market Blvd, Suite N2t9 Sacramento, CA 95834 DEPARTMENT OF CONSUMER AFFAIR::·
Phone(9i6)574-7900 GOVERt-!OR EDMUND G. BROWN JH
Fax (916) 574-8618
.pharmacy.ca.gov
INSPECTION REPORT
KEONI.VALDEZ.. _CLERK.
LAIIl'!IAC.HO.WARD. .. . .TCH115.22L .
MA...D.EXY.P-13.0MBAY..._._____ __ .I.CH622 I 3
.MAR..ClJ.S..SIANLEY__________________ .CLERK............ .
.MA.RlACRISI.INA B PAGADIJ ICH4.8ill......... _. __
MARKESHAB.RQWN. ___ _ ...... ..... . .CLERK . .
MARLON Q BAUTISTA ..ICHl 3.0230... _______
MATIH.EW...GONZAI.EZ _______ __ .CLERK______ ___
MENA RMORKOS........ T.CHU3259.. ..
MERO.N.AKALI J --·------- - ·-- - - _CLERK_ _________
.MIRNA..CHA.VVARIA ---- ----- - - . _CLERK ---------·
NATHAN..ESPlRITU ........ _ .CLERK.. ..• - ..
.EAIIE.N.CE.FRA.ZlER. ______ _...... ...CLERK.. _.____ _....
RA.CHEL.KRISNQ.WJCH__ _ _ _ .CI.ERK __
RASHAYLA..RBROO.KS__________.. ..ICH63213_______ ,,
ROMMEL.AV.ILLA.CORIA..______ .TCRL4i85!L______ ."'
.R.0.sAlJE MALAN _·-----~~-----#·-· _CTERK ··K-·¥ ~-- -··---· ·_~ ,.
SAMANIHAJMCGOW.AN. .TCH1Q7..52 ......... ....
SARA.CJ.ROMAS..__ .. __________ _ .ICH29552.... _ .. _
SARA ROSSL ____ ___ ____________ -; CJ .ERK_ ___ ________
SARA.THOMAS......_____ .. ....... .. _..___"·: CLERK .... ..... ·---
.S.IllAR.T..LE.E................... . ......................____: . .CLERK....·-... .. -
THOMAS.M..GRAHAM.. _____i .ICH21!.05..8. ....
IRACY.S.TRIBl.ING ---· - Cl.ERK . .. ............ .
VERNIE S Y..QNG_TIM _______ __ ___ _, .TCH82.491._.
YICTORIA LYON.. .. _CI.ERK ------ ---
_T.CH&3.0.l2____ -
Reference Code
California State Board of Pharmacy eus1NEss, coNsuMER sERvtces AND Hous1NG AGENCY
D
625 N. Market Blvd, Suite N219 Sacramento, CA 95834 DEPARTMENT OF CONSUMER AFFAIR~
Phone (916) 574-7900 GOVERNOR EDMUND G. BROWN JR
Fax (916) 574-8618
IWW.pharmacy.ca.gov
INSPECTION REPORT
Inspector Remarks:
Follow-up Inspection
The following were reviewed: name badges on employees, cleanliness, self-assessment, biennial controlled inventory, automated
dispensing machines, stock bottles on shelves, returned to stock medications, packaging procedures, CURES submissions, cooling
system in pharmacy
Licensee Remarks:
I have reviewed, discussed,understand and received a copy of this form. Phannacist (sign) _ _ ·1 ~=--'\.""/'-
. 24-== . ,:. ._'---,~'1----
-.------
Pharmacist (print) _ _ __.t)"--~:+·-1._ _ . --'L=-'-~_;_;·~<-....~--
Owner(sign) _ _ _ __ _ __ __ __
Owner(print)
Additional infonnation (for example - corrective plan of action, Quality Assurance outcomes, factors in mitigation, etc.) you want to
submit for consideration may be sent on the attached fonn to my attention at the above address no later than 14 calendar days from the
date above. Please include a copy of this f<mn with any infonnation that you submit.
Within 14 calendar days from the above date, please submit to me at the above address the following:
Page 3 of 3 121566991
171-3 (10/02) PHY52558
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 10 of 21 PageID #: 85
· alifornia State Board of Pharmacy BUSINESS, CONSUMER SERVIC~S ANO HOUSING AGENCY
1625 N. Market Blvd, Suite N219 Sacramento, CA 95834 DEPARTMENT OF CONSUMER AFFAIRS
Phone (916) 574-7900 GOVERNOR EDMUND G. BROWN JR.
Fax (916) 574-8618
.pharmacy.ca.gov
' ..
INSPECTION REPORT
Inspector Remarks:
Follow-up Inspection
The following were reviewed: name badges on employees, cleanliness, self-assessment, biennial controlled inventory, automated
dispensing machines, stock bottles on shelves, returned to stock medications, packaging procedures, CURES submissions, cooling
system in pharmacy
rh/-1_./?i:se...,
»
; • ~ ::; - -· r'-"'~ 1 ,. ..
irV Y?.9 1.L!S ~ c L.e 7-~S n rt--u- c::L;r->r-/. h Fl·r/ , ~
Licensee Remarks: , ,. . , , ,.;-.,. .
pl/ q·~ _v.r. ~ ~ I iq:~rc..·, c -v /f-::l.~' ( ,{.,/
,._J-~..-r7 i-7; h..1,,.., h..~;.. . I I 14... /i c· a , (' t2 , q 11/
I have reviewed, discussed, understand-and ~eceived a copy of'tfiis fonn .
Additional information (for example· corrective plan of action, Quality Assurance outcomes, factors in mitigation, etc.) you want to
submit for consideration may be sent on the attached fonn to my attention at the above address no later than 14 calendar days from the
date above. Please include a copy of this form with any information that you submit.
Within ·14 calendar days from the above date, please submit to me at the above address the following:
ali.fornia State Board of Pharmacy BUSINESS . CONSUMER SERVICES AND HOUSING AGENCY
a
625 N. Market Blvd, Suite N219 Sacramento, CA 95834 DEPARTMENT OF CONSU MER AFFAIRS
hone (916) 574-7900 GOVERNOR EDMUND G. BROWN JR
ax (916) 574-8618
W'Yt'.pharmacy.ca.gov
INSPECTION REPORT
Phannacy X Hospital Phannacy Clinic Exempt Hospital Wholesaler Hypodermic
Date of Self Assessment Fonn: I 1/ 112016 Other Pennit #: NIA . Date of DEA .Inventory: 10/13/2016
alifornia State Board of Pharmacy BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY
1625 N. Market Blvd, Suite N219 Sacramento, CA 95834 DEPARTMENT OF CONSUMER AFFAIRS
Phone(916)574-7900 GOVERNOR EDMUND G. BROWN JR
Fax{916) 574-8618
v.pharmacy.ca.gov
INSPECTION REPORT
NATHAN ESPIRITU CLERK
PATIENCE FRAZIER CLERK
RASHAYLA RBROOKS TCH63233
ROMMEL.A VILLACORTA TCH l45850
ROSALIE MALAN CLERK
SAMANTHA JMCGOWAN TCH.70752
SARAC THOMAS TCH29552
SARA ROSSI CLERK
STUART LEE CLERK
THOMASM GRAHAM TCH98058
TRACY STRIBLING CLERK
' ERNlE S YONG TIM TCH82497
VJCfORIALY ON CLERK
VICTORIANA MARTINEZ TCll830l 9
Refcn:nce C'oJe
alifornia State Board of Pharmacy BUSINESS, CONSUMER SERVICES ANO HOUSING AGENCY
625 N . Market Blvd, Suite N219 Sacramento, CA 95834 DEPARTMENT OF CONSUMER AFFAIRS
Phone (916} 574-7900 GOVERNOR EDMUND G. BROWN JR
ax (916) 574 -8618
.pharmacy.ca.gov
INSPECTION REPORT
Inspector Remarks;
Description of the pharmacy:
Independent pharmacy - CA Service Inc. dba Carezone Pharmacy, servicing patients using the Carezone APP.
Data processing and PV1 in front offices, dispensing and PV2 in warehouse with overflow data entry
Dispensing approximately 1100 Rx's daily.
No compounding, no Cfl medications, only C3-5 controlled substances .
FOLLOW UP ITEMS:
... Email or Fax within 14 days
scott.huhn@dca.ca.gov
Fax to 707-836-1001
Phone: 707-239-2940
Lic<.~nsee Remarks:
[J
allfornia State Board of Pharmacy BUSINESS, CONSU MER SERVICES AND HOUSING AGENCY
625 N. Market Blvd, Suite N219 Sacramento, CA 95834 DEPARTMENT OF CONSUMER AFFA IRS
hone(916} 574-7900 GOVERNOR EDMUND G. BROWN JR
ax (916) 574-86 18
.vw.pharmacy.ca.gov
INSPECTION REPORT
I have reviewed, discussed,understand and received a copy of this fonn . (. )
Pharmacist sign _ _- ~l L--:t·J +- ...___..
.:..LZ::~ ·
Additional lnfonnation (for example - corrective plan of action, Quality Assurance outcomes, factors in mitigation, etc.} you want to
submit for consideration may be sent on the attached fonn to my attent ion at the above address no later than 14 calendar days from the
date above. Please include a copy of this fonn with any in fonnation that you submit.
Within 14 calendar days from the above date, please submit to me at the above address the following:
Exhibit B
App Consent
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 16 of 21 PageID #: 91
Exhibit C
Call Transcript
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 18 of 21 PageID #: 93
CZ: Best contact phone number is the one we're talking on?
P: Yes
P: [redacted]
P: Female
CZ: And then I have to ask this of all female pharmacy patients, are you currently pregnant?
CZ : And then it looks like you listed here an allergy to latex. Is there any else you wanted listed
for the pharmacy?
P: No
CZ: K. And then I have one medical condition listed here, rheumatoid arthritis. Is there
anything else you would want the pharmacy to be aware of medical condition wise?
P: No.
CZ : K. And then special instructions for the pharmacy if you end up getting set up for your
prescription. Is there anything that you'd want them to have special instructions for like
prescription bottles . Do you like easy off caps on prescription bottles?
P: Yes.
CZ: K. I do too. Alright. Ok, now I'm going to read you six different statements. At the end of
each statement you just need to say if you agree or not. This is going to pertain to using
Ca rezone Pharmacy if we end up getting you set up and having your prescriptions filled by
them, ok?
P: Ok.
CA: So, user agrees to the following: I have valid prescriptions for my medications, some of
which may be controlled substances.
P: Yes.
CZ: I direct Ca rezone to request and maintain information necessary to fill my prescriptions.
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 19 of 21 PageID #: 94
P: Yes.
CZ: I consent to email communication and acknowledge not all email systems are secure.
P: Yes.
P:Yes
CZ: I request that my medications be delivered in pill packets, which are not child safe.
P: Yes.
CZ: And I appoint Ca rezone to pick up and deliver medicines including controlled substances to
me via a delivery company.
P: All right.
CZ: Ok, perfect, I'm just going to go ahead and enter your insurance information into the
pharmacy system really quickly, I'll have them test it and hopefully I'll have an answer back for
you shortly. Hopefully that will be by the end of today.
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 20 of 21 PageID #: 95
Exhibit D
Customer Testimonials
Case: 4:18-cv-01005 Doc. #: 1-12 Filed: 06/20/18 Page: 21 of 21 PageID #: 96
"I have to keep track of my medications {30 scripts lltimes a day), my fiancee's (1 time a day)
and my mother in law to be twenty medications three times a day. This app has saved us from
medication nightmares!! None of us take medication at the same time! I also love now that my
mother in law to be is getting her scripts through ca rezone so all of her medications are now
prepackaged in order of the times she takes them. What a time saver!! Cannot express how
much this has helped us. Every doctor appointment and every hospitalization the fact that our
medications are all in one place with all the dosage information is great! W
"I am so happy that I have found Care Zone. I no longer forget to take my medication thanks to
Care Zone and the app on my phone ."
"I love Care Zone!!! Everyone, I mean EVERYONE goes above and beyond!! I first started using
Care Zone shortly after I got out of the hospital. I came home counting the meds I already had,
18 medications. I was so overwhelmed and nervous I did not have the confidence to take all the
prescriptions at the right time or did I forget any. The prepackaged offer took all my stress away
from that. Thanks so much for all the time and effort you put in for just me. I don't know how
you do it!"
"I love the CareZone app, I just love you guys. I love the packets, I love not having to go to the
drug store. Even though it's only a few steps away, I have glaucoma so this is much better for
me."
PT wanted to let us know that she really enjoys that her meds are sent in strips b/c she does
not forget when to take them .... NO GUESSING for her she said!
"I'm working on my PhD, I have two kids, and a few different medical problems. CareZone has
made my life so much easier, and I actually _remember_ to take my medications now! Thank
you so much for everything that you do, and please share this feedback with your colleagues!"
"Your services are such a vital resource for people like me, who live in a rural area and can't
always drive 30 minutes to the pharmacy. Not to mention the incredible customer service is
something that is so rare these days. Thanks for helping so many people."