Specialty Pharmacy’s Role in Patient Persistence & Compliance

1. Specialty Pharmacy’s Role in Patient Persistence & Compliance Dick Rylander President BioPharmaceutical Strategies LLC Former VP Commercial Operations & IT Actelion Pharmaceuticals, US

2. Speaking Qualifications • 26 years with Parke-Davis • 16 product launches including Lopid; Lipitor; Rezulin; Procan SR; ERYC; Loestrin and others • Sales; management; marketing; managed care; incentive planning and special projects • 5 ½ years with Actelion Pharmaceuticals as VP Commercial Operations & IT • Developed the specialty distribution systems for Tracleer and Zavesca • Accredo; Caremark; PharmaCare; Gentiva and Curascript • Responsible for managed care; contracting; reimbursement services; IT; data/analytics; forecasting; inventory management, pricing, market research, training, sales force alignment, CRM…

3. Specialty vs. Retail • In the presentation we’ll: • Define the audiences • Outline some of their needs • Consider their different perspectives • Look at what impacts compliance • Share some examples of specialty efforts • Frame the strengths/weaknesses of various channels • Define when to use specialty

4. Specialty Phcy Patient Employer Payers Manufacturer Retail Phcy Who are the audiences?

5. Manufacturer Who is expecting what? • They spend a LOT of money finding patients and getting an Rx written • 30-40% of Rx’s written never get filled • Dropout rates over the first 6-12 months are HIGH • Every patient retained as long as possible is one that contributes to sales and outcomes

6. Patient Who is expecting what? • They don’t now if they can afford the medication's) • They worry about side effects • They may not understand their disease • They may be afraid to ask questions • They may believe they need to make sacrifices to get and take their medications

7. Retail Phcy Who is expecting what? • Handle high volumes of patients • Are pressed to carve out time to counsel and advise patients • Work on small margins and are stretched thin • Have broad general knowledge of many diseases but may not have depth • Insurance is more focused on mass market high volume drugs where patients don’t need special support

8. Specialty Phcy Who is expecting what? • Mail Order rather than retail based (most) • Centralized personnel and services • Tend to deal heavily in smaller disease states • Tend to deal with more expensive medications • Deal with insurance plans for approval, appeals, etc., on a daily basis • May have more depth of knowledge in specialty diseases

9. Payers Who is expecting what? • They want to know that the medication is effective and will treat the condition…the first time • They need to believe that the treatment is cost effective • They need to know that this will reduce hospitalization, ER visits and other costly services

10. Employer Who is expecting what? • Needs to know their money is being well spent • That their long term cost exposure is limited • That the medication and treatment choices are right • That the therapeutic choices will reduce recurring costs

11. Specialty Phcy Patient Employer Payers Manufacturer Retail Phcy What are the common needs? • Once an Rx gets to the pharmacy: • Get it filled quickly • At the lowest cost to the patient • Get refills fast • Answer questions • Minimize any concern that will stop the patient from taking the medication • Deal with any AE’s or SAE’s • If there are problems getting insurance approval or if the co-pay is too high get it resolved • Keep the patient on therapy for the duration of treatment

12. Compliance, Adherence and Persistency • What are the barriers to patients getting and taking medications and continuing to get refills and what can Specialty Pharmacy do better than retail or manufacturers themselves?

13. Patient Barriers • Fear of medications • Fear of cost • Not understanding the disease • Worry about side effects • Insurance issues (poor or none) • Co-pay’s unaffordable • Misinformation

14. Access Barriers • Formulary restrictions • Prior-Authorization process • Timing delays • Co-pay’s

15. Who are some of the major SPP’s? • Accredo (Medco) • Caremark • CuraScript/Priority (Express Scripts) • Aetna Specialty (Aetna) • PharmaCare (CVS) • RxCrossRoads (OmniCare) • Walgreens Specialty (Walgreens)

16. Statistics and Data • 75% of health plans use SPP’s • By 2008 biotech drugs may account for 25% of drug spend • There are over 600 biotech drugs in development which may require SPP’s • More and more drugs will be specialty and require special handling, education, training and assistance

17. Stats & Data • Clinical outcome programs administered by SPP’s: • MS: 95%+ compliance vs. 80% in retail • PAH: Flolan’s central line infection rate was .044 vs. a national average of .45 (a 10 fold difference) • Hemophilia: Option Care program after 3 years (in one case example) had a 96% compliance rate vs. <50% prior • RA: Caremark data shows 97% compliance vs. 78% at retail and adherence rates of 89% vs. 80%

18. Examples of programs at SPP’s CuraScript

19. Examples of programs at SPP’s

20. Examples of programs at SPP’s Accredo offered this example: • Unspecified Drug (confidentiality) • Known compliance issues (52-55%) • Built categories based on Pt. answers • Created risk identifiers • Model combined objective + subjective responses • Result: Compliance climbed to 90%

21. ONCOLogic™ - Value Proposition CuraScript has demonstrated superior Oncology patient management through compliance assistance programs: • Over 1,000 active patients on service for oral oncology agents • Xeloda Average Refill Rate 5.6 cycles/ Average Days 117.6

22. Compliance Calculation Report • CuraScripts approach to determining compliance results uses a formula:

23. US Bioservices • Harold G. Hilley, Vice President US Bioservices with 12 years in specialty suggests:

24. Actelion - Tracleer When we planned for the launch we believed we would need certain services: • Each patient needed to be touched to understand their financial challenges, co-pay, etc. • Special effort made to get prior-auth approval • Someone to handle appeals of denials • Regular follow up with patients to make sure they got their questions answered • Access to payers, state Medicaid's, etc. • Monitoring and report of AE’s/SAE’s

25. Tracleer (cont’d) • We chose four (4) SPP’s based on their ability to meet our anticipated needs • We designed: • A closed data system with daily reporting • An incentive system to: • assure getting patients on therapy within defined periods of time • maintain patients on therapy • Reporting to tell us how they performed

26. Tracleer Results • We built an enrollment system that coordinated with the SPP’s to find those “in plan” with payers • We tracked the speed and identified reasons which cases were delayed and why • We worked with the SPP’s to understand why patients discontinued and built compliance efforts • We steadily improved the percentage of patients getting on and staying on therapy

27. How does Specialty compare to Retail?

28. When does it make sense to consider SPP’s? When: • Prescription volume is limited • It is a niche disease or smaller population • Patients are likely to have co-pay issues • Ongoing patient education & training is needed • Prior-Auth’s are likely • Side effects need to be managed • Appeals will be necessary • Quality data is needed • Quick response is important • You need better compliance, adherence and persistence

29. SPP’s & Manufacturers • It’s a partnership • Sharing information • Consulting on outcome data and desired results • Developing marketing plans together • Planning for future success as a TEAM

30. References • “The Rise and Role of Specialty Pharmacy” Biotechnology Healthcare October 2005. David Suchanek http://www.biotechnologyhealthcare.com/journal/fulltext/2/5/BH0205031.pdf • “A Practical Approach to Addressing a Longer-Term Benefits Strategy” Employee Benefit Plan review November 2005. David Carver and F. Randy Vogenberg http://www.aon.com/about/publications/pdf/issues/vogenberg_carver_practicalapproach_nov05.pdf • “Specialty Pharmacies Seek Ways to Deliver Financial and Clinical Outcomes to Payers” Specialty Pharmacy News July 2005. http://www.aishealth.com/DrugCosts/specialty/SPN_SPs_Seek_Ways_to_Deliver_Outcomes.html • “Overview of a Specialty Pharmacy” CuraScript Specialty Pharmacy Management Guide and Trend Report. 2004. http://www.express-scripts.com/ourcompany/news/industryreports/specialtytrendreport/2004/overview.pdf • DrugTrend Report: Managing Generation Rx. Vol 7, May 2005, Medco • Special case examples from Accredo; Caremark, CuraScript and US Bioservices