1. Solution in Drug Plan Management 2011 September 8, 2011 Basil Rowe Vice President, Total Rewards and Shared Services Shoppers Drug Mart bbrowe@shoppersdrugmart.ca

2. More Ways To Care, More Ways to Benefit SDM implemented in January 2011 a new leading edge benefits plan Formulary SolutionsChronic Care SolutionsWellness Solutions Plan Spending -14.7% Enrolment in mentored and self-help programs 20% Participation in Diabetes Management Program 40%

3. The Case for Change SDM average amount per claim was above benchmark for its corporate plan and below benchmark for its retail plans. Benchmark SDM Corporate Plan SDM Retail Plans Year 2009 SDM wanted to group all SDM employees under one best-in-class plan There was a desire to leverage organizational capabilities to offer value-added services Benefit plans were inconsistent and inequitable across employee groups

4. One Employer’s Reality 2010 Review Learnings Central office employees’ plan design was not optimized Increased genericization and a decrease in generic drug prices would only provide temporary savings Change was required 2009(A)2010(F)2011(F)2012(F)2013(F) Corporate Trajectory prior to provincial reforms 2012-13 Growth: 7% Impact of legislative changes and genericization of blockbuster drugs 2012-13 Growth: 7%

5. Our Path To Success Defining SolutionImplementing MonitoringCommunicating

6. Objectives and Opportunities Objectives What are my goals? Opportunities What are my cost drivers? Improve the health of our employees and their families Reduce the cost risk to the organization Engage, empower and share accountability for better health Integrate our benefit offering Chronic Conditions & Rare Diseases Open Formulary & Specialty Drugs Lack of Coordination of Benefits Drugs & Short and Long-Term Disability Defining Solution

7. From Ideas to Solutions – Previous Plan Defining Solution Manage Risks Open Formulary Lower Cost Alternative (LCA) Utilization management Change Behaviours EAP Manage Future Costs

8. From Ideas to Solutions – Current Solutions Defining Solution Formulary Solutions Custom formulary managed in-house Tiered copay Generic leadership Utilization management Wellness Solutions Health risk assessment Mentored and self-help programs Mental health & stress triage and referral to EAP Personal wellness account & incentives Chronic Care Solutions Diabetes Rheumatoid arthritis Multiple sclerosis Cancer

9. Balancing the Experience of Members and Employer Implementing Pharmacy Expertise Generic Leadership P&T Committee L & D Incubator Pharmacy Training Grand- Fathering Consistent Experience 1-800 Number Drug Lookup Tool Human Resources Perspective

10. Engaging Members at Home, at Pharmacy, at Work Customized Branding Branded Drug Card Launch Video Town Halls Newsletters In-Store Handouts Drug Lookup Tool Wellness Contest Screensavers Targeted Mailings Plan Documentation Communicating

11. Engaging Members at Home, at Pharmacy, at Work Communicating CUSTOMIZED BRANDING SCREEN SAVER BRANDED DRUG CARD BENEFITS AT A GLANCE WELLNESS CONTEST NEWSLETTER DRUG LOOK UP TOOL KIT POSTERS

12. Focusing on Outcomes for Future Improvements Our goal is to have an integrated view of our benefits investments and to be proactive in improving our plan Sample Scorecard Trend Benefit Design Average amount paid per employee Average amount paid per claim Average number of claim per employee YOY growth in average $ per employee COB % of total eligible amount % of 90 Day fill for Maintenance Drugs Savings from Tiered Co-Insurance Formulary Savings from Managed Formulary Generic Penetration OTC % of total amount paid SRx % of total amount paid Other In-Network Usage Monitoring Member Experience Survey 45% of employees participated in the post- enrolment survey Drug / Prescription Coverage ranks as #1 in importance 88% of employees find that the plan is more sustainable for the company in the long term Employees found communication effective – but needed more information on how to make better use of their benefit choices

13. From LCA to Generic Leadership Defining SolutionImplementing MonitoringCommunicating  In-store handouts  Direct mailing  Newsletter  Drug Lookup Tool  Grandfathering of members on non-preferred drugs  Best in class generic dispensing at pharmacy  Increase price differential through tiers  Lower reimbursement for unique drugs with generic in therapeutic class  Monthly reporting on generic penetration and efficiency  Opportunity report  Results: +8% in generic penetration

14. More Ways To Care, More Ways to Benefit Plan Spending Generic Penetration Enrolment in mentored and self-help programs Participation in Diabetes Management Program -14.7% +8% 20% 40% Our 6-Month Results Medication Review & Retroactive DUR Expanded Specialty Disease Management Step Therapy Our FutureOur People

15. Lessons Learned Focus on Members Experience Change Management Engagement Integrated Information Monitor Results Opportunity Analysis Experience Survey Scorecard Access Pharmacy Expertise Health Care Knowledge In-Store Feasibility Industry Dynamics