1 Expert pharmacy benefit management (PBM) consulting team In-house pharmacists, PBM and Medicare Part D experts Former C-level PBM executives averaging.

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Expert pharmacy benefit management (PBM) consulting team 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

Specialize in working with self-funded employers, health plans, TPAs and other payers to: 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

The Excelsior Solutions Difference

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Excelsior Pharmacy Analytics

Independent annual auditing of contractual guarantees

Based on all information affecting employer cost (discounts, dispensing fees, rebates, admin fees, brand vs. generic classification, formulary lists, drug mix management)

Employers receive penalty check if guarantees were not met

Ensure members are not being overcharged

INDEPENDENTAUDITS

Objective approach with transparency and no carrier/PBM-specific incentives

Rigorous financial valuation of all proposals

Clinical program evaluation

Winning PBM must submit to certain contract provisions, guarantees, and annual independent audits

PBM MARKETING AND RENEWALS

CONTRACTREVIEWS

Establish clear contractual definitions

Structure dollar-for-dollar performance guarantees

Secure objective audit procedures

Define clear algorithms for guarantee and penalty calculations

Pricing benchmarks

Disease analysis

Drug mix analysis and interchange opportunities

Contract review

Project employer savings if PBMs were shopped today

Brand vs. generic classification

Narcotic abuse

DIAGNOSTICSTUDIES

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Full Service Pharmacy Consulting

Creating Better Economics Full Market Evaluation

Assess current contract > Renegotiate – Moving into years 4 and 5 with Premera RFP that includes top PBM’s > 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

Excelsior’s 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

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RxMart Reporting – Holding your PBM accountable

How is your PBM performing?

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Pharmacy Analytics

YOUR MOST HIGHLY UTILIZED HEALTHCARE BENEFIT: PRESCRIPTION DRUGS

BILLIONSAre Wasted on drug choices

Contract Reviews

Diagnostic Studies

PBM Procuremen

t and Renewals

Independent Pricing Audits

Specialty Drug

Strategy

Detailed Claims Analysis Formulary Management

Financial Guarantees Specialty-Drug Management

Contract Optimization Medication Adherence Improvement

Plan Design Strategies Network and Channel Optimization

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1% of members = 25–30% of pharmacy spend

The Financial Significance of Specialty Pharmacy

53% of specialty paid under medical benefit,

managing cost requires site of care strategies6 9%

43%35%

13% Medical Specialty Costs

Other

Hospital Outpa-tient

Physician Office

Home Health

Hemophilia patient’s annual cost: $850K; effective patient care saves 62% of overall care cost5

Biosimilar appropriateness; 26% savings on $11B drug category4

Ensuring adherence monitoring, $200B annual US cost from drug misuse2

Lab verification; 1 Rx to 1 of the only 96% of Cystic Fibrosis patients not qualified for drug costs $300,000/yr3

Why Integrate the Specialty Medical and Pharmacy Strategies?Percentage of Membership Affecting Drug Spend

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

SpecialtyTraditional

99%

Percentage of Drug Spend

70%

30% 1%

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What It Is: Analyzes a client’s 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 client’s TOTAL specialty spend

Specialty Drug Financial Impact Modeling Tool v1.0

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Potential Additional 2016 Rx Costs

Paid Claims

Idiopathic Pulmonary

Fibrosis (narrow definition):

Individuals with one or more paid claims

in the reporting period with ICD 9

code 516.3.

PCSK9 Inhibitors: Unique Members

with Elevated LDL-C despite being on statins or can't

tolerate.

Hepatitis C: Individuals with one or more paid claims in the reporting

period with ICD 9 codes 070.41, 070.44, 070.51,

070.54, 070.70 or 070.71.

Multiple Sclerosis:

Individuals with one or more paid claims

in the reporting period with ICD 9

code 340.

Cystic Fibrosis: Individuals 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

Potential Members 1 202 24 28 1 8543

Treatment $96,000 $12,000 $85,000 $40,000 $300,000

Percent in 2016 50% 15% 20% 15% 100%

Budget Impact $48,000 $363,600 $408,000 $168,000 $300,000 $1,239,600

PMPY $6 $43 $48 $20 $35 $145

New Drug Introductions

Esbriet or Ofev, both approved

10/2014

Praluent (alirocumab) - 7/24/2015, Reptha

(evolocumab) - 8/27/2015

Includes Sovaldi, Harvoni, Viekira Pak & drugs that must be

taken with them

Zinbryta (daclizumab) 6/2015

Orkambi - 7/5/2015

UNIVERSITY OF ALASKA ----- Impact on 2016 Budget

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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 we’ve leveraged the average per script savings achieved over Lockton’s book of business in 2014

Total annualized savings opportunity: $200,000 to $350,000 Renogiate AWP discounts, Rebates,

Dispensing Fees Implement best-in-class contract

language Quarterly Audit provision with full

reconciliation annually

Lockton Companies, Proprietary and Confidential

Potential Annualized savings: $200k -

$350k

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Lockton Pharmacy Analytics

Specialty DrugSpend Mitigation

PBM Marketing

ClinicalSavingsAnalysis

ProspectiveCost Modeling

FormularyManagement

ContractOptimization

Member CostShare Strategies

Detailed ClaimsAnalysis

Lockton’s Pharmacy

Analytics practice supports

plan sponsors in assessing

the current and future cost

drivers of their pharmacy

benefit plan and deploying

strategies to enhance value

and mitigate spending.

Our experienced consultants

will provide plan sponsors

guidance on how to address

immediate needs and

opportunities while also

positioning the plan to

successfully manage future

challenges.