Jan 27, 2012 Ajamu Kitwana Kristine Cass Robin Bose Enhancing Growth Opportunities 1

Agenda Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context 2

Agenda 3 Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context

Pharmacy benefit management (PBM) service provider to health plans, government agencies/programs, employers, unions, pharmaceutical manufacturers, and other clients. Founded in 2005 as internal PBM for PICA, a Medicare Part D plan in Puerto Rico Spun off from PICA in 2010 Successful in adding new customers and revenue sources, including administrative services for Mi Salud, one of PR’s largest health plans abarca transmits data between health plans and in-network pharmacies to help: verify patient eligibility and co-payments process and adjudicate drug claims manage drug formulary lists Proprietary Technology: RxEngine : claims adjudication software RxPlatform : user interface for PBM/client Range of business intelligence and reporting capabilities 4 Company Overview manage generic substitutions provide information on drug utilization manage manufacturer rebates TM

5 Organizational Growth # Employees, abarca has grown rapidly as the team has won new customer contracts Company Highlights 47,000 covered lives Pharmacy program administrator for Mi Salud (1.4 million lives) Customers 2009: 2 contracts (PICA, Mi Salud) 2012: 6 contracts

Project Inquiry 6 Market Readiness Are there opportunities for expansion in PBM services to: Colombia ? Costa Rica ? Dominican Republic ? Panama ? Peru ? Company Readiness How can abarca prepare for growth opportunities, including international expansion? Should abarca expand beyond PR to Latin America?

7 Customer Interviews Company Review 3 of 6 existing customers: ASES First Plus PICA 1 potential customer Company financials New business pipeline Core/ancillary services & technology offering Internal Interviews Management Team Product: Technology Group Business Intelligence Project Management Pharmacy Network Management PBM Operations Business Development and Business Analytics Account Management Customer Service Latin America Country Research State of Healthcare System Healthcare Provision Healthcare Financing Pharmaceutical Market Pharmaceutical Regulations Health Indicators Anticipated Changes Business Environment Approach

Agenda Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context 8

Long Term Focus Intermediate Focus Immediate Focus 9 Grow market share Establish market leadership in Puerto Rico Grow organization Acquire customers outside PR, leveraging PR connections and knowledge of US regulation Build global presence while maintaining PR market leadership Key Findings  Selected Latin American markets lack favorable healthcare infrastructure  Company should consider cost of diverting resources away from local opportunities Recommended Growth Plan Team Recommendations

10 Customer engagement Decision support Team linkages Immediate Focus: Suggested Growth Priorities

11 How customers feel about relationship with other PBMs 123 How customers feel about their relationship with abarca Customer Engagement

12 How customers feel about relationship with other PBMs 123 How customers feel about their relationship with abarca [A leading competitor] has its home office in the States…we have to go through so many layers to get something done. I like that they are local, not too big, and able to discuss what is important in Spanish. Good access to top management, openness, candor, willingness to help Customer Engagement

How customers view tools and data available for decisions How abarca can help them to make decisions Decision Support

abarca two years ago abarca two years from now Team Linkages

Agenda Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context 15

Puerto Rico competitive advantages that support abarca strategic opportunities Puerto Rico Advantagesabarca health Opportunities Connection to US Market Link to Latin America Healthcare/Pharma Industry Cluster Educated Talent Pool Engage Latin America customers at all levels in Spanish Draw on cultural ties with Latin America to help penetrate relationship-based Latin American markets Hone strategy through local rivalries; continue to challenge US firms abarca has built on technology and expertise developed through Borschow Medical Supply and PICA Attract top PR talent educated in PR or elsewhere to stay/return Leverage startup culture and sexy hi-tech and healthcare industries Attract global talent that is attracted to US opportunities but appreciate Puerto Rican culture and climate Apply US healthcare expertise to compete in niche US markets Leverage connections with US based pharmacies and manufacturers Build on presence and credibility in the US to access LatAm markets

Lessons Drawn for Economic Development in Puerto Rico 17 Newer industries such as those driven by government policies offer a chance to compete with US without being far behind PR firms can use language and cultural connections to compete in Latino friendly communities in the US Puerto Rico AdvantagesEconomic Development Opportunities Connection to US Market Link to Latin America Industry Cluster Talent Pool Spanish capability at executive levels can be an advantage over US firms in professional services US ties are also a hurdle to penetrating and understanding Latin American markets Encourage local competition Develop industries that build on existing infrastructure As LatAm markets develop, bring US expertise with LatAm cultural awareness Showcase “hot” PR companies: hi-tech, healthcare, startups, etc. Target US/PR top talent interested in LatAm development. Reverse the brain drain: encourage PR students who studied in US to return to PR

Questions & Discussion 18