1. Connecticut Pharmaceutical Forum: Access, Affordability, and Better Health Tara C. F. Ryan May 17, 2016

2. 9 Out of Every 10 US Prescriptions Are Filled With Generics *Generic share includes generics and branded generics. “Other” category from IMS National Prescription Audit™ not included in calculation. 2

3. Prescription Medicine Spending Growth: 2008-2024 * After spiking at 12.2% in 2014, government actuaries project prescription drug spending growth to moderate over the next few years to 5-7% through 2024, back in line with overall health care spending growth. 66 Source: Centers for Medicare & Medicaid Services (CMS) 1 *Total retail sales including brand medicines and generics 2014 saw a record 41 medicines approved by the FDA – including a number of transformative medicines for many debilitating diseases – as well as 15.7 million Americans gaining coverage through the ACA.

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5. Average Net Brand Price Growth Is Lower than List Price Growth as a Result of Increased Rebates 5 Commonly reported “list” or “invoice” prices overstate what payers ultimately pay for medicines

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7. Growth in Retail Prescription Medicine Prices Has Been in Line With Other Health Care Prices All Medical Costs Hospital and Related Services Consumer Price Index- Urban, All Items Consumer Price Index (2005 = 100) Prescription Medicines Updated-SJP PhRMA analysis based on US Bureau of Labor Statistics. Consumer price index—all urban consumers, history table. http://bls.gov/cpi/#tables Accessed March 2015. http://bls.gov/cpi/#tables 7 Medicaid price capped at CPI

8. How the Medicaid Drug Rebate Works FOR BRAND DRUGS IN CONNECTICUT To ensure coverage of prescription medicines for Medicaid enrollees, under Federal law the Medicaid Drug Rebate Program requires pharmaceutical manufacturers to provide rebates in exchange for Medicaid coverage of their drugs. Basic Rebate Consumer Price Index Rebate “Supplemental” Rebate 2014 Rebates (Brand Only) The Greater of: Best Price (Difference between AMP & Best Price) OR Minimum Rebate (23.1% of AMP) Paid if the price increases by more than CPI: Paid cumulatively to protect states from price increases higher than inflation Negotiated by manufacturers for enhanced access for patients through preferred drug lists $25.7 Million $388 Million AMP – Average Manufacturer Price Best Price – Lowest price drug sold to any non-government purchaser excluding certain sales (VA, Part D and 340B)

9. Adherence to Medicines Lowers Total Health Spending for Chronically Ill Patients “Pharmaceuticals have the effect of improving or maintaining an individual’s health...adhering to a drug regimen for a chronic condition such as diabetes or high blood pressure may prevent complications… taking the medication may also avert hospital admissions and thus reduce the use of medical services.” -Congressional Budget Office Difference in Annual Spending of Adherent Patients vs. Non-adherent Patients Roebuck MC, Liberman JN, Gemmill-Toyama M, et al. Medication adherence leads to lower health care use and costs despite increased drug spending. Health Affairs. 2011;30(1):91-99. 9 The U.S. health care system could save $213 billion annually if medicines were used properly*

11. New Data Shows That Medicines Are Not the Primary Driver of Premium Increases 11