1. E-scripts Situational Analysis Curt Mull West Holtzclaw Eric McMath Cathy Hood Karen England Jeff Rund Kassonga Mwamba

2. Industry History and Analysis Industry revenues over $178 billion in 2004 * Industry revenues over $178 billion in 2004 * 5% ( 1.5 million/3.2 billion ) Rx filled incorrectly yearly 5% ( 1.5 million/3.2 billion ) Rx filled incorrectly yearly 44,000 to 98,000 annual deaths * 44,000 to 98,000 annual deaths * Main factor is excessive pharmacy workload Main factor is excessive pharmacy workload Label confusion, similar names, physician/patient/pharmacist miscommunication Label confusion, similar names, physician/patient/pharmacist miscommunication Average 17 prescriptions an hour ( 1 every 4 minutes) Average 17 prescriptions an hour ( 1 every 4 minutes) Slow to adopt EMR movement Slow to adopt EMR movement *-Fortune 500, industry Healthcare and pharmacy *-Fortune 500, industry Healthcare and pharmacy *Institutes of Health, 1999 *Institutes of Health, 1999

3. Market Situation 150,000 physicians currently using electronic prescription fulfillment 150,000 physicians currently using electronic prescription fulfillment Average of 28% of physicians feel current prescribing procedures cumbersome 1 Average of 28% of physicians feel current prescribing procedures cumbersome 1 Approx. $27 billion could be saved in fewer medication errors Approx. $27 billion could be saved in fewer medication errors Approx 75% of national pharmacies will be connected to an E-prescription network by the end of 2006 2 Approx 75% of national pharmacies will be connected to an E-prescription network by the end of 2006 2 One study showed an average saving of 0.75 to $3.20 per prescription 3 One study showed an average saving of 0.75 to $3.20 per prescription 3 Medicare Modernization Act mandates total EMR by 2014 Medicare Modernization Act mandates total EMR by 2014 1 Online Business Intelligence for the Biotech world, November 2004 1 Online Business Intelligence for the Biotech world, November 2004 2 CBS Marketwatch, May 2004 2 CBS Marketwatch, May 2004 3 Capgem, Ernest and Young, Feb 2000 3 Capgem, Ernest and Young, Feb 2000

4. Product Analysis Strengths Strengths Eliminates prescription error Eliminates prescription error Reduce workload of pharmacy Reduce workload of pharmacy Standard format Standard format Quick dispensing from pharmacy Quick dispensing from pharmacy Elimination of hand-writing errors Elimination of hand-writing errors Re-fill notification and automatic dispensing Re-fill notification and automatic dispensing Time management for pharmacy staff Time management for pharmacy staff Connects physicians-patients-HMO-pharmacy Connects physicians-patients-HMO-pharmacy

5. Product Analysis Weakness Weakness Slow adoption Slow adoption Costly to implement Costly to implement Initial ROI Initial ROI Connectivity to protected medical and insurance records Connectivity to protected medical and insurance records Software development Software development Security of records Security of records

6. Product Analysis Opportunities Opportunities Capitalize on EMR movement Capitalize on EMR movement Federal funding available to off-set initial start-up cost Federal funding available to off-set initial start-up cost Partner with pharmacies, pharmaceutical companies, medical practices Partner with pharmacies, pharmaceutical companies, medical practices Stream-line of dispensing process Stream-line of dispensing process Significant reductions in pharmacy workload, dispensing errors Significant reductions in pharmacy workload, dispensing errors Reduction in HMO/pharmacy cost Reduction in HMO/pharmacy cost Partnership with pharmaceutical companies to E-detail products Partnership with pharmaceutical companies to E-detail products

7. Product Analysis Threats Threats Cost of start-up Cost of start-up Implementation Implementation Support of system Support of system Single set of standards Single set of standards Outdated software Outdated software Privacy protection Privacy protection Secure system Secure system Government regulations Government regulations Medical/Pharmacy infrastructure Medical/Pharmacy infrastructure

8. Competitors Dept. of Health and Human resources Dept. of Health and Human resources All major PBM’s involved in development and implementation of e-prescriptions All major PBM’s involved in development and implementation of e-prescriptions Surescripts, Allscripts, DrFirst, Gold Standard, Medplus/Quest Diagnostics, ZixCorp all heavily involved with H&HS Surescripts, Allscripts, DrFirst, Gold Standard, Medplus/Quest Diagnostics, ZixCorp all heavily involved with H&HS Many do have links to proprietary PBM’s and pharmaceutical companies Many do have links to proprietary PBM’s and pharmaceutical companies

9. Environment Economical Economical Federal grants Federal grants Partnerships with HMO/Pharmaceutical companies Partnerships with HMO/Pharmaceutical companies Positive environment-EMR movement Positive environment-EMR movement Legal Legal State regulations State regulations Scheduled medications Scheduled medications Secure network Secure network Pharmacy Pharmacy Socio-culture Socio-culture Acceptance from medical and pharmacy community Acceptance from medical and pharmacy community Awareness and education of EMR and E-scripts Awareness and education of EMR and E-scripts Technical Technical Infrastructure of network Infrastructure of network Support of system Support of system Challenge of obsolete services Challenge of obsolete services Medical practice and pharmacy infrastructure Medical practice and pharmacy infrastructure