Changing Specialty Distribution to Clinical Management Models Jonathan Gavras, MD, FCCP Senior Vice President, Chief Medical Officer Prime Therapeutics

Disclosure Declaration Dr. Gavras does not have a vested interest in or affiliation with a corporate organization offering financial support or grant monies for this CE activity. Dr. Gavras does not have an affiliation with an organization that has a specific interest in the therapeutic areas under discussion.

Why need to change the playing field? Increasing pressure to demonstrate value and address costs Markets reaching tolerance threshold Provider based reimbursement driving need for integrated solutions Provider systems looking to manage total medical costs Will find ways to keep revenue and spend within “their house” Value-based reimbursement models progressing Traditionally medical costs focused Pharmacy costs usually excluded Consumerism continues to drive the industry Individual market remains major part of health care spend despite “whatever” legislation is present Need to keep it simple: Members understand costs and experience… not reimbursement and procurement methodologies

Total Drug Cost of Rx and Medical Source: Prime Therapeutics full service book of business

Specialty Will Soon be 50% of all Costs Source: Prime Therapeutics commercial BoB 14 million lives integrated medical and Rx data

Managing pharmacy from an integrated approach Effectively managing costs requires new strategies that consider the entire care spectrum. These costs bridge both medical and specialty and include emerging technology* 4% of our members drive over half of total medical costs TOTAL COST of CARE - $400 PMPM Total Drug Spend - $130 PMPM (32% of Total Costs) 1% of our members drive over 60% of total drug costs Traditional Rx - $70 PMPM (54% of Total Drug Costs) Specialty Rx $31 PMPM (24% of Total Drug) We are a clinical company that is using data to surface the most important information to you. We help you focus your efforts and dollars where it matters most. And, because we follow the trends and your market so closely, we are always developing and bringing you new approaches that work - tailored just for you. Of those 1% of members, over 85% are on a specialty medication. Medical Rx $29 PMPM (22% of Total Drug) *Prime medical benchmark report, data on file

Prime Integrated Pharmacist Program Opportunity Identification Therapeutic Opportunities GuidedHealth® Limited Use CRE & CMM Reporting Client Reports Other Cost of Care Aggregator Future Referrals via Case Mgrs & Team Mtg Channel Opportunities (AllianceRx Walgreens Prime, Walgreens, Site of Care) Cost of Care (formulary compliance, generics, high cost drugs, duplicative therapy, opioid) Clinical Quality (adherence, gaps, safety, readmits, ER ) Path Two Intervention Platform /Workflow Strategic Pharmacist Intervention Reporting: Quarterly Savings & Outcomes Path One Data File to Plan

Value Based Contracting Current Prime Programs: Leverages our integrated model Proves the value of selected medicine(s) when taken appropriately Need to better align payers, members and doctors to achieve desired health outcomes Contracts in place 2018 pipeline Condition Criteria Diabetes Monitors frequency of lab testing Multiple sclerosis Total cost of care evaluation Hepatitis C Evaluation of cure rates Cholesterol Adherence Condition Criteria Diabetes Adherence component, long-term outcomes Autoimmune Indication-based contracting Respiratory Persistency & compliance Cholesterol PMPM guarantee

Goals of Prime CareCentered contracting model Must impact overall health care outcomes Cannot be focused entirely upon: Adherence Clinical efficacy Must expand focus to: Drive affordability Lead to better overall clinical outcomes Improve member access to care and experience with the health care system Population Health Experience of Care Per Capita Cost Triple Aim

Florida Blue value-based oncology programs Measures that have evolved to ensure members get the most effective care with the best outcome Drug Replacement (‘08) Provider Administered Drug Program (‘09) Evaluated Pathways (‘10) Bundled Prostatectomy (‘11) Designed with Baptist Health South Florida Leveraged model to launch program with Moffitt (2013) Evolved program design Continuing to evolve program designs Multiple oncology management programs First oncology value-based (VB) reimbursement program (2011) Launched largest commercial VB program in Florida with Florida cancer specialists (2016) Drug costs and trend accounts for over 40% of the spend Oncology drug costs not cited as a significant driver of savings at this time Savings achieved largely through reduction in inpatient and ER utilization

Prime model Demonstrate value to members, payers and providers Future Prime efforts more focused on partnering with collective combination of integrated delivery systems, payers and pharmaceutical industry to drive more comprehensive outcome improvements. Will include: Development of comprehensive clinical programs to: Improve proper use of drug(s) Manage high cost and complex cases Defined (and measurable) clinical, utilization, quality and cost endpoints Rigorous analytic and financial review Utilize similar tools that support medical value based reimbursement models Value based design with shared cost risk among participants