2006 Drug Trend Julayna Meyer, R.Ph, MBA Vice President Trend Management

 2007 Express Scripts, Inc. All Rights Reserved Drug Trend I.Overall trend and spend II.Future Drug Trend Projections III.Key Therapy Classes IV.The Results of Active Management V.Ongoing opportunities to maximize the benefit

 2007 Express Scripts, Inc. All Rights Reserved Top DTC Advertised Classes $100 Million $200 Million $300 Million $400 Million $500 Million Source: JP Morgan March 19, 2007 Prescription Pad $179 Erectile Dysfunction $498 Hypnotics $446 Cholesterol $357 Asthma $221 Osteoporosis Hypnotics trend: 36.9%

 2007 Express Scripts, Inc. All Rights Reserved. 4 What Do We Mean By “Drug Trend”? We report total ingredient cost year over year –Plan design decisions determine cost-sharing We report Express Scripts commercial book of business –Plan specific results available through your Account Management team We track specialty separately More detailed information can be found in our Drug Trend Report

 2007 Express Scripts, Inc. All Rights Reserved. 5 Component 2001:022002:032003:042004:052005:06 Price Units per Rx Brand/Generic Mix Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003 Price: The difference in average price per unit of common drugs compared to previous year. Typical drivers include market dynamics and competition.

 2007 Express Scripts, Inc. All Rights Reserved. 6 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx Brand/Generic Mix Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 7 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx Brand/Generic Mix Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 8 Brand Drug Prices Up Generic Drug Prices Down Brand Prices Up 6.9% Brand Price Leaders: Hypnotics up 13.8%Hypnotics up 13.8% Stimulants/obesity up 10.5%Stimulants/obesity up 10.5%

 2007 Express Scripts, Inc. All Rights Reserved. 9 Brand Drug Prices Up Generic Drug Prices Down Brand Prices Up 6.9%

 2007 Express Scripts, Inc. All Rights Reserved. 10 Brand Drug Prices Up Generic Drug Prices Down Brand Prices Up 6.9% Generic Prices Down 5.7%

 2007 Express Scripts, Inc. All Rights Reserved. 11 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 12 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003 Brand/Generic Mix: Reflects the cost impact of increased generic use. Typical drivers: new generics and maturation of the therapy class

 2007 Express Scripts, Inc. All Rights Reserved. 13 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 14 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 15 Top Brand/Generic Mix Changes RankTherapy Class Key Generic Introduction Therapy Class Impact 1AntihistaminesAllegra ® (2005)-11.8% 2NSAIDsMobic ® (2006)-10.7% 3DecongestantsFlonase ® (2006)-10.5% 4Narcotic Analgesics OxyContin ® (2005) Duragesic ® (2005) Actiq ® (2006) -9.1% 5Misc. HematologicsPlavix ® (2006)-8.3% 6Antihyperlipidemics Pravachol ® (2006) Zocor ® (2006) -5.6% 7AntidepressantsZoloft ® (2006)-2.5% Ranked by Percent Change

 2007 Express Scripts, Inc. All Rights Reserved. 16 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003 Therapeutic Mix: Changes in the cost per Rx due to use of more or less expensive drugs and drug strengths. Typical drivers include new products replacing old products.

 2007 Express Scripts, Inc. All Rights Reserved. 17 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 18 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 19 Top Therapeutic Mix Changes Anticonvulsants Lyrica ® Lyrica ® 6.9% Antivirals Atripla ® Atripla ® 4.3% Beta Blockers Coreg CR TM, Toprol XL ® Coreg CR TM, Toprol XL ® 3.3% Dermatologics Elidel ® Elidel ® -2.4% Protopic ® Protopic ® NSAIDs COX-IIs COX-IIs -4.6% Ranked by Percent Change

 2007 Express Scripts, Inc. All Rights Reserved. 20 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 21 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization 6.3%6.8%2.9%4.0%2.2% =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 22 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization 6.3%6.8%2.9%4.0%2.2% =Common Drugs +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 23 Utilization Prevalence Proportion of members utilizing drugs Impacted by diagnosis and therapy plan 2006 Prevalence Trend: 1% Intensity Number of Rxs filled among utilizers Impacted by length of therapy 2006 Intensity Trend: 1.2%

 2007 Express Scripts, Inc. All Rights Reserved. 24 Lowest Utilization Increase in 5 Years % Change in Utilization

 2007 Express Scripts, Inc. All Rights Reserved. 25 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization 6.3%6.8%2.9%4.0%2.2% =Common Drugs 17.5%14.0%10.4%7.5%5.8% +New Drugs Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 26 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization 6.3%6.8%2.9%4.0%2.2% =Common Drugs 17.5%14.0%10.4%7.5%5.8% +New Drugs 1.0%0.5%0.3%0.4%0.2% Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 27 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization 6.3%6.8%2.9%4.0%2.2% =Common Drugs 17.5%14.0%10.4%7.5%5.8% +New Drugs 1.0%0.5%0.3%0.4%0.2% Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 28 ~Three-fold Drop in New Drugs Compared to 1996 Nature Reviews Drug Discovery 6, (February 2007)

 2007 Express Scripts, Inc. All Rights Reserved. 29 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization 6.3%6.8%2.9%4.0%2.2% =Common Drugs 17.5%14.0%10.4%7.5%5.8% +New Drugs 1.0%0.5%0.3%0.4%0.2% Overall Rx Trend Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2007 Express Scripts, Inc. All Rights Reserved. 30 Component 2001:022002:032003:042004:052005:06 Price 7.5%6.6%6.0%5.3%4.3% Units per Rx -0.1%0.3%0.2%0.1%0.4% Brand/Generic Mix -2.3%-2.6% -2.7%-2.9% Therapeutic Mix 5.3%2.6%3.7%0.8%1.7% =Cost per Rx 10.5%6.8%7.2%3.3%3.5% XUtilization 6.3%6.8%2.9%4.0%2.2% =Common Drugs 17.5%14.0%10.4%7.5%5.8% +New Drugs 1.0%0.5%0.3%0.4%0.2% Overall Rx Trend 18.5%14.5%10.6%7.9% 5.9% Components of Rx Cost Trend * * Excluding Specialty starting in 2003 ?

 2007 Express Scripts, Inc. All Rights Reserved. 31 Lowest Drug Trend In a Decade Express Scripts Internal Data, 2006 Note: Specialty tracked separately as of 2003 Drug Trend

 2007 Express Scripts, Inc. All Rights Reserved. 32 Lowest Drug Trend In a Decade Express Scripts Internal Data, 2006 Note: Specialty tracked separately as of % 60% 40% 20% 0% Generic Fill Rate Drug Trend

 2007 Express Scripts, Inc. All Rights Reserved. 33 Forecasted Single Digit Trends Through 2010 Projected non-specialty trends for ESI commercial plan sponsors actual, estimated 7.9%5.9%7.5%8.5%9.1%7.5%

 2007 Express Scripts, Inc. All Rights Reserved. 34 Brand Drugs Going Generic Soon More than $50 billion within the next five years Annual Sales $ Billion $11.2$10.2$8.6$12.8$8.5

 2007 Express Scripts, Inc. All Rights Reserved. 35 Brand Drugs Going Generic Soon More than $50 billion within the next five years Annual Sales $ Billion Zyrtec Wellbutrin XL Imitrex Ambien Norvasc Other Lamictal Risperdal Fosamax Effexor XR Advair* Other Valtrex Topamax Prevacid Other Cozaar Lipitor Other Levaquin Zyprexa Actos Protonix Other Toprol XL Adderall XR $11.2$10.2$8.6$12.8$8.5

 2007 Express Scripts, Inc. All Rights Reserved. 36 Top Five Therapy Classes Overall Total Ingredient Costs, 2005:2006 PMPY PMPY 3.6% 6.7% 7.1% 15.5% 11.6%

 2007 Express Scripts, Inc. All Rights Reserved. 37 0% 5% 10% 15% 20% 25% 30% Generic Antidepressant Market Share Gaps Jan 2001Jan 2002Jan 2003Jan 2004Jan 2005Jan 2006 citalopram actual paroxetine actual fluoxetine actual Without action, our SSRI generic use fell short by about 30% fluoxetine ideal paroxetine ideal citalopram ideal

 2007 Express Scripts, Inc. All Rights Reserved. 38 0% 5% 10% 15% 20% 25% 30% Generic Antidepressant Market Share Gaps Jan 2001Jan 2002Jan 2003Jan 2004Jan 2005Jan 2006 We didn’t want the same thing to happen in the biggest class -- Lipids citalopram actual paroxetine actual fluoxetine actual fluoxetine ideal paroxetine ideal citalopram ideal

2006 A Large Opportunity for Savings In the Statin Class

 2007 Express Scripts, Inc. All Rights Reserved. 40 Statin Market Shares Q Q Q Q % 60% 50% 40% 30% 20% 10% 0% Zocor Zocor gained market share prior to patent expiration

 2007 Express Scripts, Inc. All Rights Reserved. 41 Statin Market Shares Q Q Q Q % 60% 50% 40% 30% 20% 10% 0% Zocor Simvastatin Simvastatin continued on Zocor’s market growth curve

 2007 Express Scripts, Inc. All Rights Reserved. 42 Statin Market Shares Q Q Q Q % 60% 50% 40% 30% 20% 10% 0% Zocor Simvastatin Generic HMGs Generic drugs now lead the statin market.

 2007 Express Scripts, Inc. All Rights Reserved. 43 Express Scripts Outperformed The Nation Q Q Q Q % 60% 50% 40% 30% 20% 10% 0% ESI Generic HMGs NMS Generic HMGs

 2007 Express Scripts, Inc. All Rights Reserved. 44 Statin Trend Without GenericsToday With GenericsToday

 2007 Express Scripts, Inc. All Rights Reserved. 45 Statin Trend Without GenericsToday With GenericsToday +2.0%

 2007 Express Scripts, Inc. All Rights Reserved. 46 Statin Trend Without GenericsToday With GenericsToday -1.1% +2.0%

 2007 Express Scripts, Inc. All Rights Reserved. 47 Therapy Class #1: Lipids Generic Drugs Drove Down Trend Class Trend: 3.6% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price -5.6%

 2007 Express Scripts, Inc. All Rights Reserved. 48 Therapy Class #1: Lipids Generic Drugs Drove Down Trend Class Trend: 3.6% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price -5.6%

 2007 Express Scripts, Inc. All Rights Reserved. 49 Tremendous Generic Opportunity Class Trend: 6.7% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #2: Gastrointestinals

 2007 Express Scripts, Inc. All Rights Reserved. 50 Tremendous Generic Opportunity Class Trend: 6.7% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #2: Gastrointestinals ?

 2007 Express Scripts, Inc. All Rights Reserved. 51 Step Therapy Can Drive PPI Savings $44 $63 38% 14%

 2007 Express Scripts, Inc. All Rights Reserved. 52 Prevalence Drove Antidepressants Class Trend: 7.1% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #3: Antidepressants

 2007 Express Scripts, Inc. All Rights Reserved. 53 Prevalence Drove Antidepressants Class Trend: 7.1% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #3: Antidepressants

 2007 Express Scripts, Inc. All Rights Reserved. 54 Trend Driven By Prevalence Class Trend: 15.5% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #4: Diabetes

 2007 Express Scripts, Inc. All Rights Reserved. 55 Trend Driven By Prevalence Class Trend: 15.5% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #4: Diabetes

 2007 Express Scripts, Inc. All Rights Reserved. 56 Price Drove Asthma Class Trend: 11.6% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #5: Asthma

 2007 Express Scripts, Inc. All Rights Reserved. 57 Price Drove Asthma Class Trend: 11.6% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #5: Asthma

 2007 Express Scripts, Inc. All Rights Reserved. 58 Hypnotics Are Growing Quickly Class Trend: 36.9% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #19: Hypnotics

 2007 Express Scripts, Inc. All Rights Reserved. 59 Hypnotics Are Growing Quickly Class Trend: 36.9% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #19: Hypnotics

 2007 Express Scripts, Inc. All Rights Reserved. 60 Hypnotics Are Growing Quickly Class Trend: 36.9% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #19: Hypnotics

 2007 Express Scripts, Inc. All Rights Reserved. 61 Hypnotics Are Growing Quickly Class Trend: 36.9% New Drugs Intensity Prevalence Therapeutic Mix Brand/Generic Mix Price Therapy Class #19: Hypnotics

 2007 Express Scripts, Inc. All Rights Reserved. 62

 2007 Express Scripts, Inc. All Rights Reserved. 63

 2007 Express Scripts, Inc. All Rights Reserved. 64 Hypnotics Need Your Focus % 70% 60% 50% 40% 30% 20% 10% 0% Ambien Ambien CR Lunesta Sonata Rozerem

 2007 Express Scripts, Inc. All Rights Reserved. 65 Adding Programs Drives Savings >2 new programs 1 new program No new programs ESI 2006 Non-Specialty Trend: 5.9%

 2007 Express Scripts, Inc. All Rights Reserved. 66 Adding Programs Drives Savings >2 new programs 1 new program No new programs

 2007 Express Scripts, Inc. All Rights Reserved. 67 Adding Programs Drives Savings >2 new programs 1 new program No new programs

 2007 Express Scripts, Inc. All Rights Reserved. 68 Adding Programs Drives Savings >2 new programs 1 new program No new programs

 2007 Express Scripts, Inc. All Rights Reserved Trend At An Encouraging 5.9% The more you manage, the lower your trend. Opportunities abound for managing out waste. –PPI class represents a significant opportunity –Don’t be asleep with Hypnotics spend