Plaintiffs allege that EHS failed to comply with contractual terms for the updating of the average wholesale price (“AWP”) used to calculate reimbursement for brand drugs that pharmacies dispensed to members of prescription benefit plans administered by EHS. Plaintiffs sought as damages the reimbursement difference that would have resulted had EHS updated AWP in the manner that Plaintiffs alleged was required during the relevant time period. EHS contends that it complied with all contractual requirements and denies that any pharmacies are entitled to recover any damages. Despite their differences, plaintiffs and EHS have entered into a Settlement Agreement to compromise the claims that plaintiffs have asserted against EHS.

According to records maintained by EHS, your pharmacy or pharmacy chain was a party to a contract with EHS covering the dispensing of prescription drugs to individuals covered by EHS prescription benefit plans. This notice concerns the settlement of a class action lawsuit that challenges the manner in which EHS calculated the reimbursement amounts paid to its network pharmacies for brand name drugs. The case has been settled, and the Court has ordered that you be sent this Notice, because you have a right to know your options before the Court decides whether to approve the settlement. This Notice explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.

The parties believe you are a member of the Class based upon the records of EHS, and that you have not excluded your pharmacy from this class action. The federal court has certified a class described as follows:

All pharmacies and/or other similar entities, who entered into a contract which provided for reimbursement of prescriptions according to a formula which included the Average Wholesale Price (“AWP”) with Defendant and/or its predecessors in interest, their successors in interest, and/or their subsidiaries and/or their related entities from February 14, 1999 to October 23, 2003, inclusive.

Yes. Individual P.S.A.O. member pharmacies may return Claim Verification Forms like all other pharmacies. Class Members that are entitled to receive cash payments under the settlement will receive claim forms for all claims resulting in a reimbursement difference, whether the pharmacy submitted the claim directly to EHS or pursuant to a contract between EHS and a P.S.A.O. in which the pharmacy was a member, and all cash payments due to pharmacies under this settlement will be made directly to such pharmacies.

If you received more than one Notice, you may be entitled to more than one cash distribution. “Reimbursement differences” in this case were done by pharmacy identification number and/or chain number. If you dealt with EHS as an independent pharmacy for several years, but later joined a P.S.A.O., you may receive two Notices.

You should check each Notice carefully, because each Notice should contain a Claim Verification Form that must be returned to receive benefits. You are entitled to return each Claim Verification Form you receive, and each will result in a separate cash distribution.

Yes. The settlement was worked out in formal and informal mediation proceedings after nearly four years of litigation. For complex reasons pertaining to the actual law governing both the contract claim and the procedures surrounding class actions, both Class Representatives and their attorneys believe this is the best settlement available, and that it is preferable to the expense, duration and uncertainty that a trial and any subsequent appeals present which would further delay the recovery, if any, to pharmacies.

If you have received a Claim Verification Form and are entitled to a cash distribution under the settlement, you must fill out and return the enclosed Claim Verification Form on or before August 31, 2009. Be sure to include your correct current address where indicated. If there are no unexpected delays, checks will be mailed within ninety days after the Fairness Hearing.

If you do nothing, you will receive no settlement check, because settlement checks will only be sent to pharmacies that return a Claim Verification Form. But, your claims against EHS will nonetheless be released.

The Court has appointed the law firms of McCallum, Methvin & Terrell, P.C. and Farris, Riley & Pitt, LLC, both of Birmingham, Alabama, to represent you and other Class Members. Together, the lawyers are called Class Counsel. If you want to be represented by your own separate lawyer, you may hire one at your own expense, but you do not need to do so.

You have the right to object to the settlement. You must do this in writing, as long as you do it by August 31, 2009. If you object and the settlement is nonetheless approved, you will still receive any payment you are otherwise entitled to. If your objection is sustained by the Court, and the entire settlement is set aside, then the litigation will go forward as though no settlement had been reached. For instructions concerning objections, see question 14, on the notice. You do not have the right to opt out of the class that has been certified in this case.

If you do nothing, you will receive no settlement check, because settlement checks will only be sent to pharmacies that return a Claim Verification Form. But, your claims against EHS will nonetheless be released.

Address and name changes must be made directly on the claim form. We cannot change the address or update your name over the phone.