Court voids L.A. County/Ramsell no-bid drug contract

In News by AHF

For the second time in a year, L.A. Superior Court invalidates a no-bid, single-source contract for pharmacy benefits management services—a $75 million annual contract arrangement between the County of Los Angeles and Ramsell Public Rx LLC, a private party, which was pushed through for County approval in just one day
LOS ANGELES (June 5, 2013)⎯For the second time in one year, a California Superior Court judge has directed issuance of a writ of mandate voiding a no bid, single-source contract between the County Los Angeles and Ramsell Public Rx LLC, a private company that provides pharmacy benefits management services. Last year, AIDS Healthcare Foundation (AHF) sued the County to block implementation of the contract, asserting that County Department of Health Services officials engaged in a non-competitive bidding process that was procedurally and substantively flawed and, therefore, legally invalid under applicable law governing the award of County contracts to private entities.

In February 2012, the Los Angeles County Department of Health Services recommended in writing that the Board of Supervisors delegate to the Department of Health Services the authority to award the pharmacy administrator service contract on a single-source, non-competitive basis to Ramsell, a private company that provides pharmacy benefits management services—a $75 million annual contract arrangement between the County and a private party which was pushed through for County approval in just one day.

In April 2012, AHF sued the County, Board, DHS, and the individual Board Supervisors, arguing that their award of the contract to Ramsell extended from a non-competitive bidding process that was procedurally and substantively flawed and, therefore, legally invalid. On June 6, 2012—just over one year ago—the Superior Court of Los Angeles County agreed, issuing a ruling that the County had abused its discretion. The court granted AHF’s request for writ of mandate, compelling the County to void the contract with Ramsell and comply with the law in any further contracting for pharmacy administrator services.

Nine days later and despite the court ruling invalidating the initial Ramsell contract, County officials awarded a second “new” and allegedly “temporary” contract to Ramsell, pending the issuance of a Request for Proposals (RFP). That second contract was then challenged by AHF and was voided today by the Superior Court of Los Angeles County. Despite assurances that it would send out an RFP in the Fall of 2012, the County failed to issue the RFP related to these services until March 28, 2013.

“That Los Angeles County officials are once again being held accountable and told ‘no’ by the court over their improper and illegal awarding of a sweetheart, single-source, no bid contract to Ramsell restores our faith in the system of fair play,” said Michael Weinstein, AIDS Healthcare Foundation President. “However, the County’s ongoing failure to follow statutory guidelines in administering County business and allocating contracts legally remains a grave concern. Our hope now is that the County will actually heed the judge’s ruling and follow the law.”

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