1. Pharmaceutical Company – Catamaran
Team: Tracy, Paul, Mike, Anne, Taryn, Carol

2. Background History
provides pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefits management industry in North America
electronic point-of-sale pharmacy claims management,
retail pharmacy network management,
mail and specialty pharmacy claims management,
Medicare Part D services,
benefit design consultation,
preferred drug management programs,
drug review and analysis,
consulting services,
data access, and reporting and information analysis

3. Background formerly known as SXC Health Solutions Corp
changed its name to Catamaran Corporation in July 2012
Catamaran Corporation was founded in 1993 and is headquartered in Schaumburg, Illinois
July 23, 2015, Catamaran Corporation operates as a subsidiary of OptumRx, Inc.
CEO: Mark A. Thierer

4. What's changing
We will not migrate any additional commercial pharmacy claims processing to RxClaim (Catamaran's claims processing system).
We will transition a limited number of clients currently on RxClaim to our existing claims processing platform.
We are continuing to work with Catamaran to transition home delivery pharmacy back-end fulfillment services for base medications; Cigna retains all aspects of our Specialty pharmacy business

5. What’s not changing?
1) Our commitment to own and operate our own integrated PBM
2) Our ongoing relationship with Catamaran
3) Catamaran continues to manage the majority of Cigna’s retail pharmacy network.
4) Our plan to transition back-end fulfillment services for base medications in support of our home delivery pharmacy; Cigna will continue to handle ALL aspects of our Specialty pharmacy business
5) Our relationship with Catamaran on behalf of our Government business, which was fully transitioned to their RxClaim claims processing platform on 1/1/15

6. 5 Leading PBMs - SWOT

7. Core Strategies Value proposition:
brings market leading economics coupled with the most flexible operating platform in the business
Helps clients capitalize on the growth of the ACA due to dominant market share
Helps clients manage trend and contain costs

9. CVS, Express Scripts, and Catamaran Operating Margin
CVS is clearly the leader, with a margin twice as high as Catamaran's. That advantage likely owes to leveraging CVS's retail footprint across Caremark's plan sponsors, giving the company pricing power and opportunities to reduce overlapping costs.

10. Quarterly Comparison of CVS, Express Scripts, and Catamaran Operating Margin
Catamaran has been the biggest surprise, outpacing analyst estimates by an average 7.8% over the last four quarters as analysts have failed to adequately model cost savings associated with its Catalyst acquisition.

11. EPS Trends for CVS, Express Scripts, and Catamaran Operating Margin
Diluted Earnings per Share (EPS)

12. Debating Valuation of CVS, Express Scripts, and Catamaran
While shareholders of Express Scripts and Catamaran are paying less than peak valuation for each dollar of sales, investors are paying the most in five years for CVS's sales, on hopes that the company's expansion of its MinuteClinic health clinics will capture more post-reform patient prescriptions.

13. Impact on Cigna Role in Healthcare Environment
Offers an alternative to other PBMs by combining scale & purchasing power with flexibility & agility
connect pharmacists, doctors and caregivers with prescription data to improve health outcomes
clinical intelligence, technology and scale to lower payer costs and offer high level client service

14. Impact on Cigna
Cigna expects to record one-time transaction costs, primarily for advisory fees associated with this agreement in the second quarter of 2013, resulting in an after-tax charge of approximately $25 million that will be reported as a special item. Cigna expects this transaction will have an immaterial impact to adjusted income from operations1 in The Company estimates that this agreement will begin making a positive contribution to earnings in 2014 and will create annualized earnings per share accretion of approximately $0.50 per share2 in 2015 through improved clinical management, purchasing and administrative efficiencies.

15. Relationship with Cigna
Cigna will retain formulary management, clinical and product development, sales and marketing, and will manage “all day-to-day customer- and client-facing functions.”
Catamaran will provide prescription drug procurement and inventory management, order fulfillment for Cigna's home-delivery pharmacy, retail network contracting, and claims processing.
Catamaran will remain behind the scenes, because the mail pharmacy and all pharmacy-related customer interactions will still have the Cigna brand.
Cigna will lead the medical-pharmacy benefit integration activities

16. Key Insights