1. Specialty Pharmacy: Today’s Prescription for a Better Tomorrow Steve Miller, MD Chief Medical Officer

2.  2007 Express Scripts, Inc. All Rights Reserved. 2 What Are Specialty Medications? Injectable or non-injectable; Frequent dosing adjustments, or Intensive clinical monitoring, or Intensive patient training, or Limited or exclusive distribution, specialized handling or specialized administration, or Cost in excess of $500 for a 30- day supply

3.  2007 Express Scripts, Inc. All Rights Reserved. 3 Anemia Cancer Growth Deficiency Hemophilia Hepatitis Infertility Multiple Sclerosis Pulmonary HTN Rheumatoid Arthritis Many others Know Your Specialty Patients

4.  2007 Express Scripts, Inc. All Rights Reserved. 4 Specialty Growth Continues to Outpace Traditional Drug Market Source: Express Scripts analysis of IMS data.

5.  2007 Express Scripts, Inc. All Rights Reserved. 5 Relatively Few People Use Specialty Drugs Prevalence Well Acute condition Low-grade chronic Chronic conditions and/or procedures Rare Diseases, Acute Complex, Multiple co- morbidities Medical Care 41:1153, 2003

6.  2007 Express Scripts, Inc. All Rights Reserved. 6 Each Specialty Patient Has Large Annual Costs Annual Cost / pt Well Acute condition Low-grade chronic Chronic conditions and/or procedures Rare Diseases, Acute Complex, Multiple co- morbidities Medical Care 41:1153, 2003

7.  2007 Express Scripts, Inc. All Rights Reserved. 7 Specialty Patients Remain With Their Health Plans Continuous eligibility from July 2003 through June 2006 Members utilizing their Rx benefit for MS or RA vs. non-utilizers of Rx benefit GIC data Health Plan Retention Rate

8.  2007 Express Scripts, Inc. All Rights Reserved. 8 Overall Specialty Trend: 21% $60.02 $72.58 PMPY

9.  2007 Express Scripts, Inc. All Rights Reserved. 9 New Drugs Have A Growing Impact in Specialty Trend Contribution to Trend

10.  2007 Express Scripts, Inc. All Rights Reserved. 10 Top Six Specialty Therapy Classes 2005:2006 PMPY + 22.8% - 8.3% + 4.0% + 39.5% + 19.0% + 22.7% PMPY

11.  2007 Express Scripts, Inc. All Rights Reserved. 11 Top Six Specialty Therapy Classes 2005:2006 PMPY + 22.8% - 8.3% + 4.0% + 39.5% + 19.0% + 22.7% PMPY

12.  2007 Express Scripts, Inc. All Rights Reserved. 12 A Common Disease Pathway New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #1: Inflammatory Conditions Units / Rx

13.  2007 Express Scripts, Inc. All Rights Reserved. 13 A Common Disease Pathway New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #1: Inflammatory Conditions Units / Rx Fast Facts Cost PMPY$19.04 Avg Cost/Rx$1479 Rx/User/Yr8.3 Class Trend22.7%

14.  2007 Express Scripts, Inc. All Rights Reserved. 14 Price Increases Drove MS New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #2: Multiple Sclerosis Units / Rx

15.  2007 Express Scripts, Inc. All Rights Reserved. 15 Price Increases Drove MS New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #2: Multiple Sclerosis Units / Rx Fast Facts Cost PMPY$13.60 Avg Cost/Rx$1470 Rx/User/Yr9.65 Class Trend19.0%

16.  2007 Express Scripts, Inc. All Rights Reserved. 16 Cancer Pipeline Starts to Mature New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #3: Cancer Units / Rx

17.  2007 Express Scripts, Inc. All Rights Reserved. 17 Cancer Pipeline Starts to Mature New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #3: Cancer Units / Rx Fast Facts Cost PMPY$10.44 Avg Cost/Rx$1593 Rx/User/Yr3.92 Class Trend39.5%

18.  2007 Express Scripts, Inc. All Rights Reserved. 18 Cautious Use in More Patients New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #4: Blood Cell Deficiencies Units / Rx

19.  2007 Express Scripts, Inc. All Rights Reserved. 19 Cautious Use in More Patients New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #4: Blood Cell Deficiencies Units / Rx Fast Facts Cost PMPY$5.01 Avg Cost/Rx$1683 Rx/User/Yr4.54 Class Trend4.0%

20.  2007 Express Scripts, Inc. All Rights Reserved. 20 Cautious Use in More Patients Therapy Class #4: Blood Cell Deficiencies

21.  2007 Express Scripts, Inc. All Rights Reserved. 21 More Use and Higher Doses New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #5: Growth Deficiencies Units / Rx

22.  2007 Express Scripts, Inc. All Rights Reserved. 22 More Use and Higher Doses New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #5: Growth Deficiencies Units / Rx Fast Facts Cost PMPY$4.59 Avg Cost/Rx$2552 Rx/User/Yr8.47 Class Trend22.8%

23.  2007 Express Scripts, Inc. All Rights Reserved. 23 Growth Hormone Use Is Rapidly Moving Into Older Patients GH users above age 20

24.  2007 Express Scripts, Inc. All Rights Reserved. 24 Generic Drugs Impact Specialty New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #6: Hepatitis C Units / Rx

25.  2007 Express Scripts, Inc. All Rights Reserved. 25 Generic Drugs Impact Specialty New Drugs Intensity Prevalence Therapeutic Mix Brand / Generic Mix Price Therapy Class #6: Hepatitis C Units / Rx Fast Facts Cost PMPY$3.45 Avg Cost/Rx$1133 Rx/User/Yr10.17 Class Trend-8.3%

26.  2007 Express Scripts, Inc. All Rights Reserved. 26 What Have We Learned? Where Do We Go? Specialty drugs are an increasingly large part of the pharmacy spend Few patients are impacted today Programs can have a significant financial impact with little patient disruption Generic drugs can make a difference… even in specialty

27.  2007 Express Scripts, Inc. All Rights Reserved. 27 Biopharmaceutical Pipeline Continues To Grow Source: PhRMA, International Federation of Pharmaceutical Wholesalers & Biotech Industry Organization

28.  2007 Express Scripts, Inc. All Rights Reserved. 28 Most of the Specialty Pipeline Is for Common Illnesses Number of Drugs

29.  2007 Express Scripts, Inc. All Rights Reserved. 29 New Indications Are Expanding Utilization

30.  2007 Express Scripts, Inc. All Rights Reserved. 30 New Indications Are Expanding Utilization

31.  2007 Express Scripts, Inc. All Rights Reserved. 31 The Routes of Administration Are Growing More Complex (Route unknown) ESI Pipeline Tracking database, Phase 2 or later

32.  2007 Express Scripts, Inc. All Rights Reserved. 32 What Do You Want?

33.  2007 Express Scripts, Inc. All Rights Reserved. 33 What Do You Want? Improved clinical outcomes Improved compliance Improved patient satisfaction Increased reliability of distribution channel Decreased acquisition costs Consultation on benefit design

34.  2007 Express Scripts, Inc. All Rights Reserved. 34 Superb Care Makes a Difference Rheumatoid Arthritis Data CuraScriptRetail 42% 33% Self-Management

35.  2007 Express Scripts, Inc. All Rights Reserved. 35 CuraScript Patients Are More Adherent With Therapy

36.  2007 Express Scripts, Inc. All Rights Reserved. 36 Natural History of HCV Infection High Level of Individual Variation Reprinted with permission from Lauer GM, et al. N Engl JMed. 2001; 345:41-52. Copyright © 2001 Massachusetts Medical Society. All rights reserved.Normalliver Acute infection Chronic infection develops in 80% Chronic hepatitis Cirrhosis develops in 20% Risk of carcinoma, 1-4% per year ~20 years Alcohol use, co-infection ~30 years Female sex, younger age at infection

37.  2007 Express Scripts, Inc. All Rights Reserved. 37 Hepatitis C Impact On the Health System Today Example: Liver Transplantation 1,000 per year in US $300,000-$900,000 each Annual spend for HCV transplants in US is over $500,000,000

38.  2007 Express Scripts, Inc. All Rights Reserved. 38 Future Burden of HCV $830 Billion between 2010-2019 190,000 additional deaths

39.  2007 Express Scripts, Inc. All Rights Reserved. 39 Compliance Is Critical To Clearing Hepatitis Virus % of Patients with Sustained Viral Response 10% 75% Hepatitis C Type 1

40.  2007 Express Scripts, Inc. All Rights Reserved. 40 Value of Specialty Pharmacy More convenient Higher satisfaction Better educated More compliant Greater savings Safer

41.  2007 Express Scripts, Inc. All Rights Reserved. 41 Optimal Recommendations Comprehensive Communications for all programs Clinical Programs Prior AuthorizationPrior Authorization Drug Quantity ManagementDrug Quantity Management Co-Payments $25 more for non-formulary$25 more for non-formulary $30 more for Retail$30 more for Retail CuraScript Exclusive CuraScript for all fills Courtesy fills for “stats” only CuraScript Exclusive CuraScript for all fills Courtesy fills for “stats” only

42.  2007 Express Scripts, Inc. All Rights Reserved. 42 Specialty Growth Continues to Outpace Traditional Drug Market Source: Express Scripts analysis of IMS data.

43.  2007 Express Scripts, Inc. All Rights Reserved. 43 Access to Lifesaving Medications Act Introduced in 2007 Bicameral, bipartisan Express Scripts supporting with research and analysis

44.  2007 Express Scripts, Inc. All Rights Reserved. 44 ESI Estimate of Biogeneric Savings Opportunity Studied four classes of medications Very conservative assumptions Disease CategoryDrug Group Patent Expiration Multiple SclerosisInterferons2003/2007 AnemiaErythropoietin2004 Growth FailureGrowth Hormone2003 DiabetesInsulin2004

45.  2007 Express Scripts, Inc. All Rights Reserved. 45 $3.5 Billion Savings In 1 st Year Alone $ Millions

46.  2007 Express Scripts, Inc. All Rights Reserved. 46 In the first ten years: $71 Billion Savings $Billions Inflation and prevalence driving trend in this model

47.  2007 Express Scripts, Inc. All Rights Reserved. 47 Annual Sales $ Billion Biologic Drugs Losing Patent Protection $11 $11.2 $11.4 $11.7 $12.1 $15.6 $20.1 $29.8 $33.5 $35.4 $37.5 Residual New 20072008200920102011201220132014201520162017

48.  2007 Express Scripts, Inc. All Rights Reserved. 48 Contact Your Elected Officials

49.  2007 Express Scripts, Inc. All Rights Reserved. 49 Contact Your Elected Officials www.therightprescription.org

50.  2007 Express Scripts, Inc. All Rights Reserved. 50 Contact Your Elected Officials

51.  2007 Express Scripts, Inc. All Rights Reserved. 51 Contact Your Elected Officials

52.  2007 Express Scripts, Inc. All Rights Reserved. 52 It’s Easy. Just visit the ESI Outcomes Website: http://www.express-scripts.com/ ourcompany/ news/ outcomesconference Follow the link to: http://www.therightprescription.org

53.  2007 Express Scripts, Inc. All Rights Reserved. 53 Conclusions Specialty spend is increasing It is just not about covering the medication but assuring appropriate use –Right drug, dose, route and care There is much you can do now –Put in plan designs that support goals –Support biogeneric legislation