1. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 11 Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. Big Data in the Pharmacy Benefit Douglas Mager, MA. Director of Research HIMSS Midwest Gateway Chapter Speaking Event March 11 th, 2015

2. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 2 Express Scripts Overview National Leader in Pharmacy Benefits 1.4 billion prescriptions per year 85 million members 3,500 clients 30,000 employees Respected and Recognized Business model aligned with our clients’ Scientific research to develop meaningful prescription-drug solutions

3. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 3 PharmacyPBM The Role of a Pharmacy Benefit Manager Member Take prescription and ID card to pharmacy Receive prescription drug Submit online claim to PBM Fill prescription Collect copayment Verify eligibility Determine benefit Drug utilization review Send online response Store information

4. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 4 What is ‘Big Data’ in the Pharmacy Benefit? 65,000 pharmacies 1 million prescribers 85 million members 1.4 billion Rx per year Per second: 100 claims Per day: 500,000 calls 3.6 million pharmacy events 1.7 million member contacts Claims Web Data Fax/Rx Images Call center records We manage 20+ PETABYTES of data across our data ecosystem We actively manage a large volume of administrative data, resulting from the daily operations with its clients and patients that it serves. VOLUME More than 150 data stores VELOCITY Streams from applications and devices VARIETY Various data sets (structured, unstructured)

5. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 5 74% of U.S. physicians actively ePrescribe Wiring Healthcare: ePrescribing ePrescribing has become the standard channel for physicians to route prescriptions to pharmacies Over 66% of home delivery new prescriptions are ePrescribed Over 50% of retail prescriptions are ePrescribed Over 2M eligibility requests daily — eligibility provides formulary data and identifies home delivery pharmacy Over 1M medication history requests daily

6. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 6 The Two Most Important Things to Know About Administrative Data The primary purpose of a claim is payment From the provider’s and payor’s perspective, if a claim is good enough to make an accurate payment, IT IS GOOD ENOUGH.

7. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 7 Advantages of Administrative Data Vast Amounts of Information Observations/records Data fields (over 300 fields captured on each pharmacy claim alone) Relatively Inexpensive Data is captured as part of the adjudication process Longitudinal Look Typically spans multiple years S

8. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 8 Limitations of Administrative Data Continuity Difficult to track members or clients longitudinally if they do not remain with ESI Population Biases “Sample of convenience” data from commercially insured members Not Always Generalizable Coverage may vary by region or demographically depending of client mix Cannot Measure All External Factors Other, unmeasured factors influencing utilization and program acceptance

9. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 9 What Can We Do With Administrative Data? Outcomes research Research on trends and patterns of medication cost and utilization Drug Trend Report Forecast cost and utilization based on market shifts and patent expirations Predictive modeling Focus resources based on predicted future behavior Combine with outside data (often via collaboration with other institutions)

10. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 10 Example: Predictive Modeling (PM) and Medication Adherence What is predictive modeling 1 Why is medication adherence important 2 Benefits of PM in medication adherence 3

11. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 11 Predictive Model Life Cycle Set Campaign Goals Execute Campaign Analyze Campaign Success Monitor Model Performance Re- estimate Model Develop Model Set Modeling Goals Gather and Explore Data Pass Fail Marginal 1 2 3 4 5 6 7 8

12. 12 Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. Predictive Modeling in Action Identification: Members most likely to be non-adherent on medication Multiple therapy classes New starts and continuing utilizers Investigation: Factors most predictive of future non- adherence

13. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 13 Benefits of Predictive Modeling in Medication Adherence Enables intervention before problems become well established. New Starts Mitigates the impact of self- correction and regression to the mean Continuing Utilizers Stop driving by the rearview mirror alone What really matters is what’s ahead All Users Pre-Period Compliance < 80% For All Members Analyzed

14. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 14 75 % Exhibit some form of medication non- adherence 4. Why Is Medication Adherence Important? $308B Annual Direct Costs 1 23M ER Visits 2 125K Deaths 3 1.Express Scripts 2010 Drug Trend Report 2.New England Healthcare Institute: Thinking Outside the Pillbox, August 2009 3.R McCarthy “The Price You Pay For The Drug Not Taken”, Bus Health 1998 4.National Community Pharmacists Association: “Take As Directed: A Prescription Not Followed” December 15, 2006 Each Year

15. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 15 Predictive Modeling in Action Prescription Fill Alex Milagro Andrea Chris Marcus Simone Victor Yvette Brendan Patricia Who will miss their medication?

16. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 16 Predictive Modeling in Action Who will miss their medication? We have to wait to find out. Scheduled Fill Alex Milagro Andrea Chris Marcus Simone Victor Yvette Brendan Patricia

17. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 17 Predictive Modeling in Action Who will miss their medication? We have to wait until a refill to find out. Scheduled Fill Alex Milagro Andrea Chris Marcus Simone Victor Yvette Brendan Patricia

18. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 18 Predictive Modeling in Action Who will miss their medication? Interventions are reactive. Alex Milagro Andrea Chris Marcus Victor Yvette Brendan Patricia Scheduled Fill Intervention Missed Scheduled Refill Simone

19. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 19 Predictive Modeling in Action Who will miss their medication? We need to intervene earlier. But how? Alex Milagro Andrea Chris Marcus Simone Victor Yvette Brendan Patricia ? Scheduled Refill

20. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 20 Predictive Modeling in Action How do we predict individual behavior? Crunching the data gives us insight into each member. ++ +++ Over 400 total factors = 43 Express Scripts Adherence Index SM Simone

21. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 21 Predictive Modeling in Action How do we apply it? Every script gets an index that identifies at risk members. Prescription Fill Chris Brendan Andrea Simone Marcus Victor Patricia Alex Yvette Milagro Scheduled Refill (Predicted Result) 32 43 38 39 67 73 76 82 84 87 Express Scripts Adherence Index SM Interventions

22. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 22 Predictive Modeling in Action How do we apply it? Early intervention improves results.. Prescription Fill Marcus Victor Patricia Alex Yvette Milagro 32 43 38 39 67 73 76 82 84 87 Express Scripts Adherence Index SM Chris Brendan Andrea Simone Scheduled Refill Interventions

23. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 23 Summary – Big Data at Express-Scripts Vast amounts of data available Gain insights into opportunities to drive out waste Understand the drivers of trend and utilization Help clients maintain the pharmacy benefit for their employees/members Drive down prescription cost for clients and patients

24. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 24 Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. Questions?

25. Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved. 25 Internal Information © 2014 Express Scripts Holding Company. All Rights Reserved.