The Excelsior Solutions Difference Expert pharmacy benefit management

The Excelsior Solutions Difference Expert pharmacy benefit management

The Excelsior Solutions Difference Expert pharmacy benefit management (PBM) consulting team Specialize in working with self-funded employers, health plans, TPAs and other payers to: In-house pharmacists, PBM and Medicare Part D experts Former C-level PBM executives averaging 20+ years industry experience each Manage 18 million+ pharmacy lives Provide unbiased, impartial, expert advice Recommend solutions rather than products Acquired by Lockton in 2012 Optimize PBM arrangements Leverage improved vendor relationships Identify additional opportunities for cost savings Develop strategies in a dynamic marketplace Provide full disclosure on all compensation 1 Excelsior Pharmacy Analytics CONTRACT REVIEWS DIAGNOSTIC STUDIES Establish clear contractual definitions

Pricing benchmarks Disease analysis Structure dollar-fordollar performance guarantees Drug mix analysis and interchange opportunities Secure objective audit procedures Contract review Project employer savings if PBMs were shopped today Define clear algorithms for guarantee and penalty calculations Brand vs. generic classification Narcotic abuse INDEPENDENT AUDITS PBM MARKETING AND RENEWALS Independent annual auditing of contractual guarantees Objective approach with transparency and no carrier/PBMspecific incentives

Based on all information affecting employer cost (discounts, dispensing fees, rebates, admin fees, brand vs. generic classification, formulary lists, drug mix management) Rigorous financial valuation of all proposals Clinical program evaluation Winning PBM must submit to certain contract provisions, guarantees, and annual independent audits Employers receive penalty check if guarantees were not met Ensure members are not being overcharged 2 Creating Better Economics Full Market Evaluation Assess current contract > Renegotiate Moving into years 4 and 5 with Premera RFP that includes top PBMs > Leverage health plan pricing Transparent contract > Insure terms and conditions drive most favorable results for client Allow collectives to participate Trend Management RX Mart: Data Analytics

Excelsiors proprietary data solution Holds PBM accountable to contract Provides in depth utilization review Drill down capabilities for each client's specific needs Clinical Oversight Pharmacist review of data to determine most effective PBM programs, i.e. Step Therapy, QL, PA Narrow network evaluation Specialty Rx consulting Execution Ongoing Account Management Implementation oversight Quarterly review meetings Plan design benchmarking and consulting Insuring PBM delivers on operational and service commitments 3 RxMart Reporting Holding your PBM accountable How is your PBM performing? 4 Pharmacy Analytics YOUR MOST HIGHLY UTILIZED HEALTHCARE BENEFIT: PRESCRIPTION DRUGS Detailed Claims Analysis Formulary Management Financial Guarantees Specialty-Drug Management Contract Optimization Medication Adherence Improvement Plan Design Strategies Network and Channel Optimization Contract Reviews Diagnosti c Studies PBM Procuremen t and Renewals Independent Pricing Audits

Specialty Drug Strategy BILLIONS Are Wasted on drug choices 5 The Financial Significance of Specialty Pharmacy 1% of members = 2530% of pharmacy spend 100% 90% 30% 80% 53% of specialty paid under medical benefit, managing cost requires site of care Medical Specialty6Costs strategies 1% 70% 99% 60% 70% 50% 40% 30% 20% Perce ntage of Drug Spen d 10% 0% Percentage of Membership Affecting Drug Spend Specialty Traditional 13.00 9.00% % 35.00 %

43.00 % Other Hospital Outpatient Physician Office Home Health Why Integrate the Specialty Medical and Pharmacy Strategies? Hemophilia patients annual cost: $850K; effective patient care saves 62% of overall care cost5 Biosimilar appropriateness; 26% savings on $11B drug category 4 Ensuring adherence monitoring, $200B annual US cost from drug misuse 2 Lab verification; 1 Rx to 1 of the only 96% of Cystic Fibrosis patients not qualified for drug costs $300,000/yr3 6 Specialty Drug Financial Impact Modeling Tool v1.0 What It Is: Analyzes a clients potential financial exposure to key specialty/high cost drug categories Targets key drugs in the pipeline, recently released drugs, specialty drugs, high cost diseases, and expanded indications for existing therapies The tool was developed with FDA guidelines and is piloted with the following disease states: Hepatitis C High cholesterol PCSK9 Multiple Sclerosis Cystic Fibrosis Idiopathic Pulmonary Fibrosis

Uses medical and Rx data from InfoLock along with population disease rates Model will continue to be refined with new drugs, disease states, & clinical data Model shows minimum costs not inclusive of physician drug administration fees What It Is Not: Predictive tool for a clients TOTAL specialty spend 7 Potential Additional 2016 Rx Costs UNI VERSI TY OF ALASKA ----- I mpact on 2016 Budget Multiple Sclerosis: I ndividuals with one or more paid claims in the reporting period with I CD 9 code 340. Cystic Fibrosis: I ndividuals with paid claims for one inpatient visit or two outpatient visits with a diagnosis of Cystic Fibrosis. Number below is 28% of CF patients, minus those taking Kalydeco Total 24 28 1 8543 $12,000 $85,000 $40,000 $300,000 50% 15% 20% 15%

100% $48,000 $363,600 $408,000 $168,000 $300,000 $1,239,600 $145 Idiopathic Pulmonary Fibrosis (narrow definition) : I ndividuals with one or more paid claims in the reporting period with I CD 9 code 516.3. PCSK9 Inhibitors: Unique Members with Elevated LDL-C despite being on statins or can't tolerate. Hepatitis C: I ndividuals with one or more paid claims in the reporting period with I CD 9 codes 070.41, 070.44, 070.51, 070.54, 070.70 or 070.71. Potential Members 1 202 Treatment $96,000 Percent in 2016 Budget Impact Paid Claims PMPY New Drug Introductions

$6 $43 $48 $20 $35 Esbriet or Ofev, both approved 10/2014 Praluent (alirocumab) - 7/24/2015, Reptha (evolocumab) 8/27/2015 I ncludes Sovaldi, Harvoni, Viekira Pak & drugs that must be taken with them Zinbryta (daclizumab) 6/2015 Orkambi - 7/5/2015 8 Savings Insight Based upon the limited data available in the claims experience, it creates a challenge to provide a full assessment of the savings affiliated with the current arrangement To project the estimated savings weve leveraged the average per script savings achieved over Locktons book of business in 2014 Total annualized savings opportunity: $200,000 to $350,000 Renogiate AWP discounts, Rebates, Dispensing Fees Lockton Companies, Proprietary and Confidential Implement

best-in-class contract Potential Annualized savings: $200k $350k 9 Lockton Pharmacy Analytics Locktons Pharmacy Member Cost Share Strategies Analytics practice supports Detailed Claims Analysis plan sponsors in assessing the current and future cost drivers of their pharmacy Specialty Drug Spend Mitigation PBM Marketing benefit plan and deploying strategies to enhance value and mitigate spending. Our experienced consultants will provide plan sponsors Clinical Savings Analysis Prospective Cost Modeling guidance on how to address immediate needs and opportunities while also positioning the plan to Formulary Management Contract Optimization successfully manage future challenges. 10

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