1. GMHSF/8.12.04 The Impact of Reform on the Health Care Industry Rosanne Ott Senior Vice President Portfolio Manager

2. Topics Background What types of reforms are being considered? Most likely outcomes and timing Potential impact on current plan sponsors What are costs? Who will pay for plan? How are changes implemented? Opportunities

3. Background Credit Markets and Bubbles Hospitals  Revenue sources tightening Less access to capital Reduction in charitable donations Private pay and Medicare  Operating budgets Tightening Campaign: Healthcare tied with the economy Macros: Credit markets seizure + increased unemployment + need for healthcare reform = great uncertainty

4. Public Health Plan – 45 million Americans uninsured Private Pay  Issues: $$ Logistics Infrastructure Tax codes Implementation Competition Types of Reform Being Considered

5. Combination with premiums funded by taxpayers Timing – Early 2011 with possible phase-in Potential impact on: Current plan sponsors Hospitals Suppliers Innovators Most Likely Outcome, Timing, and Impact

6. What are Costs? Who Pays? February 24 : President Obama proposal  $634 billion* $1.0 to $1.5 trillion  $318 billion Higher taxes  $190 billion Increased taxation offshore earnings  $ 200 billion Other Medicaid drug rebate, charitable donation limit, mortgage interest limitations, and lots more!) * 10 year reserve MORE LIKELY FROM

7. Campaign: Life Sciences Bio-Generics Health Care Information Technology (HCIT) Insure the uninsured Opportunities Created by President Obama

8. Now in Office: February 9: Stimulus $778 billion  $19 billion: Medical Records Recovery  $10 billion: Life Sciences – National Institute Health (NIH)  $600 million: Cancer Research Future Winners: Level playing field  All of healthcare wins, for a price? Opportunities Created by President Obama

9. WALL STREET’S ODDS OF HEATHCARE REFORM PASSING: 99.9%

10. Tremendous Amount Of Unknown Remains But…. REFORM WILL COME NOT ALWAYS AS BAD AS PROPOSED LEMONS MAKE LEMONADE! Conclusion

12. Disclosure The views expressed are as of May 8; these views may change subsequent to this date, and they do not guarantee the future performance of the markets, the Alger Health Sciences Fund, or any other mutual fund managed by Fred Alger Management, Inc.; they are not meant to provide investment advice, should not be considered a recommendation to purchase or sell securities, and there is no guarantee they will materialize. Investors should not consider references to individual markets or sectors as an endorsement or recommendation to purchase or sell such markets or industries. Additionally, any sectors mentioned, if owned, were purchased or sold as part of an overall portfolio, and therefore reference to them herein should not be construed as a recommendation or offer to purchase or sell any such sector. Transactions in such sectors, if any, may have been made for a variety of reasons, including, without limitation, in response to cash flows or due to inclusion in a benchmark. A Word About Risk Growth stocks tend to be more volatile than other stocks, as the price of growth stocks tends to be higher in relation to their companies' earnings and may be more sensitive to market, political, and economic developments. Investing in companies of all capitalizations involves the risk that stocks of small- and mid-sized companies are subject to greater risk than stocks of larger, more established companies, owing to such factors as limited liquidity, inexperienced management, and limited financial resources. The Alger Health Sciences Fund concentrates its investments in the health sciences sector. As such, the value of the Fund’s shares may be more volatile than mutual funds that do not similarly concentrate their investments. Performance current to the most recent month-end for the Alger Health Sciences Fund or any mutual fund managed by Fred Alger Management, Inc. may be found on www.alger.com.www.alger.com Investing in the stock market involves gains and losses and may not be suitable for all investors. HSPP 0509