Ed Feaver Prescription Solutions President & CEO.…a health and consumer services company making people’s lives better Pharmacy Management: Prescription.

Ed FeaverPrescription Solutions

President & CEO

.…a health and consumer services company making people’s lives better

Pharmacy Management:Prescription Solutions

2

Historical Perspective

• PacifiCare-centric PBM which provided fully integrated services to PacifiCare and unaffiliated external accounts

• Minimal focus on external growth

• Exceptionally tight formulary management capability which supports aggressive cost management, purchasing and rebate strategy

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More than a PBM

• A pharmacy and medical management company

– Making the connection between pharmacy benefits and medical utilization

– Focused on providing the best clinical outcome at the lowest possible cost

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Vision/Goal

• The vision is to be nationally recognized as one of the top five Pharmacy and Medical Management companies (Pharmaceutical Services Company) by 2006.

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Key Statistics FY2001

• Claims– 65M claims processed

– 50M claims paid

– 4.2M mail service claims

• Call Centers– 15,000 calls/day

– 750,000 Prior Authorization requests

• Contracting– $1.9B of annual drug purchases

– $230M of annual rebates

– 54,000 pharmacies in network

• 750 employees

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1997 1998 1999 2000 2001 2002

340.5

371.3

195.9

124.1

260.2

394.1

47.861.850.9

34.928.511.1

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$50

$100

$150

$200

$250

$300

$350

$400

$450

Total Revenue

EBITDA

Financial Highlights

(est.)

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Product Strategy

• Focused around market segment– Product efforts targeted by segment

• Managed Care Organizations / Health Plans• Employers • Taft-Hartley / Union Trust Funds• Government• Consumers• Pharmaceutical Manufacturers• Non-profit Organizations

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Select Products by Market Segment

Products

MCO /HealthPlans

Employers Taft-HartleyUnionTrustFunds

Government Consumers PharmaManufacturers

Specialty Pharmacy

(Injectable Program)

Real-time Audit

Predictive Model

Care Management

Discount Drug Program

501(c)(3)

Foundation for Accountability inHealth Care Services andDecision Making

Point-of-CareClinical Tool

Real World ProspectiveStudies

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Sales Strategy

• Segment Strategies – MCOs

• Competitive on transaction-based commodity services then identify vertical sales opportunities once clients are on board

– Employers/TPAs• Leverage relationships with consulting practice leaders

• Joint Venture Opportunities• Evolution from PacifiCare-Centric

– Network Enhancement Strategy– Formulary and Rebate Strategy– Pricing Strategy

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Membership Projections

Year Lives Implemented

Base 350,000 2001 780,000 2002 1,600,000 2003 2,400,000 2004 3,000,000 TOTAL 8,130,000

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PHS Non-PHS

72%

28%

PHS Non-PHS

2001 Client Mix: PHS v. Non-PHS

2004 Client Mix: PHS v. Non-PHS

25%

75%

Client Mix Change

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Pharmacy and Medical Management