MASI – September 28, 2017 Presenters: John Addelman, Chief Sales Officer – ProCare Rx Danny Toth, CEO – Timber Ridge Consultants

Traditional Spread Model v Pass-Through Model PBM earns fees through spread in traditional model Difference between what is paid to pharmacy and what is billed PBM pays pharmacy $100.00 and bills client $113.00 NO Administration Fee charged to client Client pays $113.00 total; PBM profit is $13.00 PBM earns administration fee in pass-through model PBM pays pharmacy $100.00 and bills client $100.00 $4.00 Administration Fee charged to client Client pays $100 for the claim plus a transparent $4.00 admin. fee

AWP discounts Average Wholesale Price (AWP) AWP discounts have become meaningless in traditional spread models Game of Definitions: brands, high-priced generics, single source generics, etc. PBM guarantees a brand discount rate of AWP minus 18% PBM guarantees a generic discount rate of AWP minus 84% Pass-Through PBMs guarantee to pass through their true discounts!

AWP Discounts Brand Single Source Generics High Priced Generics Low Priced Generics AWP – 16.5% AWP – 30% AWP – 60% AWP – 84%

What Happens Brand Single Source Generics High Priced Generics Low Priced Generics AWP – 16.5% AWP – 30% AWP - 60% AWP – 84% AWP-18.5% Middle 2 pushed left Spread models push left AWP-16.5% Middle 2 pushed right Pass-through follow RFP directions even though 4 distinct columns AWP – 74% The Spreadsheet Game

Payers Problem Traditional Spread PBMs look better on paper i.e. the spreadsheet What happens if you put your worst priced generics into the brand bucket? Including single source generics, multi-source brands, and certain high priced generics into brand bucket artificially improves brand discount rate Moving these same drugs into the brand discount bucket also artificially inflates the generic discount rate After hundreds of repricings it is very clear Payers consistently pay more by using the spread model

The Spreadsheet Brand AWP – 18.5% Generic AWP – 81% Spread Model Pass-Through Model Brand AWP – 18.5% Generic AWP – 81% Dispensing Fee - $0.50 Admin Fee - $0.00 Broker Fee - $0.00 Brand AWP – 16.5% Generic AWP – 78% Dispensing Fee - $1.40 Admin Fee - $2.75 Broker Fee - $0.75

How Do We Know It’s your data Simply request your claims file NDC Pharmacy ID Fill Date Quantity Days Supply Ingredient Cost Rx # Dispensing Fee

Actual Repricing Data Same Drug, Same Pharmacy, Same Day Savings of $9 Actual Repricing Data Same Drug, Same Pharmacy, Same Day Savings of $9.32/claim or $227,244 ProCare Rx Spread Model Net Rx Claims – 24,368 Ingredient Cost - $2,992,448 Spread of $324,716 $324,716/24,368 = $13.32 PBM makes $13.32/claim Total Payment - $2,992,448 Net Rx Claims – 24,368 Ingredient Cost - $2,667,732 Pass-Through $2,667,732 Administration fee - $4.00 24,368 x $4.00 = $97,472 Total Payment - $2,765,204

The Time is Right Now You have options It’s not what the PBM pays the pharmacy for drugs It’s what you pay the PBM for those drugs We have seen this scenario play out hundreds of times Stop overpaying for medications

Thank You! John Addelman – CSO ProCare Rx jaddelman@procarerx.com Cell – (813) 220-3904

The Great Reveal Demystifying Rx Costs How to Regain Control of your Plan Costs April 30, 2017

Four Buckets of Savings Transparent PBM Preferred vs. Non-Preferred Elimination of Spreads using totally transparent PBM Data analysis reveals spread per prescription Eliminate the spread with current PBM, or work with a PBM without a spread Audit and determine your provider outliers and structure Preferred and Non-Preferred Pharmacy Provider Networks Tier change in pricing eliminates the discrepancy Does not eliminate these retailers from network

Four Buckets of Savings Specialty Drug Savings Preferred vs. Non-Preferred Assure that specialty drugs are not introduced if not necessary. Find Innovative ways to reduce the Plan cost for this class of drugs. Finds therapeutic drugs with same medical and therapeutic results, with substantially lower price.

PBM SPREAD AGGREGATE REPORT DRUG NAME STRENGTH RX QTY TOTAL $ ALLOWED BY THE PBM FOR RX PATIENT PAID FOR RX AMT. PBM PAID PHARMACY FOR RX AMT. PBM BILLED THE PLAN FOR RX AMT PBM OVERBILLED (SPREAD) Acyclovir 800mg 35 $12.25 $10.00 $2.25 $17.97 $15.72 Amlodipine/Benaz 5-20mg 90 $59.38 $5.00 $54.38 $139.38 $85.00 Anastrozole 1mg 30 $7.64 $- $128.97 Atorvastatin 40mg $12.36 $2.36 $46.14 $43.78 Buproprion XL 300mg $18.55 $8.55 $113.01 $104.46

Generic ingredient(s) Generic/OTC Alternative/30 Days BRAND NAME DRUGS NOT COVERED BY PLAN 2105 Brand Name Generic ingredient(s) Used For Brand Cost/ 30 days Generic/OTC Alternative/30 Days Duexis tablet 26.6mg/800mg famotidine/ibuprofen Arthritis pain $1,400.00 $18.00 Vimovo tablet 20mg/375mg or 20mg/500mg esomeprazole/naproxen $50.00 Arestin microsphere 1mg minocycline Periodontitis $1,800.00 $25.00 Conzip ER capsule 100mg, 200mg or 300mg tramadol Moderate/severe pain $350.00 $170.00 Zipsor capsule 25mg diclofenac Mild/moderate pain $650.00 $35.00 Fexmid tablet 7.5mg cyclobenzaprine Muscle spasm $410.00 $15.00 Amrix ER capsule 15mg or 30mg Muscle Spasm $775.00 Lorzone tablet 375mg or 750mg chlorzoxazone Muscle pain $520.00 $22.00

COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

COMPARISON 6 Rx claims (20mg/30 quantity) with 3 different NDC-11 codes. Filled at one independent and three chains. Incumbent PBM had 5 different prices Timber Ridge had 1. Incumbent average price was $40.75 and Timber Ridge was $3.60 90% savings ($37.15 per Rx)

COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

The Choice is Yours Contact danny a. toth, r.ph. to review your pharmacy claims and plan design 706.402.1065 danny@trconsultants.net