2007 Drug Trend Brian Seiz, PharmD Express Scripts

 2008 Express Scripts, Inc. All Rights Reserved. 2 What Does Express Scripts Mean by “Drug Trend”? We report total ingredient cost year over year –Plan design decisions determine cost- sharing We report Express Scripts commercial book of business We track specialty separately

 2008 Express Scripts, Inc. All Rights Reserved. 3 Lowest Drug Trend Since 1994… Note: Specialty tracked separately as of 2003 Drug Trend

 2008 Express Scripts, Inc. All Rights Reserved. 4 Lowest Drug Trend Since 1994… …Record High Generic Fill Rate Note: Specialty tracked separately as of 2003 GFR Drug Trend

 2008 Express Scripts, Inc. All Rights Reserved. Drug Safety Concerns One Lesson From Vioxx: Approach New Drugs With Caution By MARY DUENWALD October 5, 2004 New Avandia study reaffirms heart risk By Rita Rubin, USA TODAY January 16, 2008 FDA reviewing asthma drug, suicide link Bloomberg News / March 28, 2008

 2008 Express Scripts, Inc. All Rights Reserved. 66 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 77 Components of Rx Cost Trend * * Excluding Specialty starting in 2003 Price: The difference in average price per unit of common drugs compared to previous year. Typical drivers include market dynamics and competition.

 2008 Express Scripts, Inc. All Rights Reserved. 88 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 99 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 10 Brand Drug Prices Up Generic Drug Prices Down Brand Price Drivers: Hypnotics: % Dermatologicals: % Contraceptives: % Brand Price Drivers: Hypnotics: % Dermatologicals: % Contraceptives: % Brands: Prices Up 7.4%

 2008 Express Scripts, Inc. All Rights Reserved. 11 Brand Drug Prices Up Generic Drug Prices Down Brands: Prices Up 7.4% Generic Price Drivers: Antihyperlipidemics: % Antidepressants: % Gastrointestinals: % Generic Price Drivers: Antihyperlipidemics: % Antidepressants: % Gastrointestinals: % Generics: Prices down 3.1%

 2008 Express Scripts, Inc. All Rights Reserved. 12 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 13 Components of Rx Cost Trend * * Excluding Specialty starting in 2003 Brand/Generic Mix: Reflects the cost impact of increased or decreased generic use. Typical drivers: new generics and maturation of the therapy class

 2008 Express Scripts, Inc. All Rights Reserved. 14 Top Brand/Generic Mix Changes Ranked by Percent Change

 2008 Express Scripts, Inc. All Rights Reserved. 15 Components of Rx Cost Trend * * Excluding Specialty starting in 2003 Therapeutic Mix: Changes in the cost per Rx due to use of more or less expensive drugs and drug strengths. Typical drivers include new products replacing old products.

 2008 Express Scripts, Inc. All Rights Reserved. Top Therapeutic Mix Changes 16 Januvia ® Combo Products Lyrica ® Lamictal ® Seroquel ® Abilify ® Crestor ® Vytorin ® Prilosec OTC ®

 2008 Express Scripts, Inc. All Rights Reserved. 17 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 18 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 19 Utilization = Prevalence + Intensity Proportion of members utilizing drugs Impacted by diagnosis and therapy plan Prevalence 0.7%

 2008 Express Scripts, Inc. All Rights Reserved. 20 Utilization = Prevalence + Intensity Proportion of members utilizing drugs Impacted by diagnosis and therapy plan Prevalence Number of Rxs filled among utilizers Impacted by length of therapy Intensity 0.7% 1.8%

 2008 Express Scripts, Inc. All Rights Reserved. Impact of Utilization on Trend 21 % Change in Utilization

 2008 Express Scripts, Inc. All Rights Reserved. 22 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 23 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 24 Continued Drop in New Drug Approvals Lowest approval rate since 1983 U.S. Food and Drug Administration Approved New Molecular Entities

 2008 Express Scripts, Inc. All Rights Reserved. 25 Components of Rx Cost Trend * * Excluding Specialty starting in 2003

 2008 Express Scripts, Inc. All Rights Reserved. 26 Females Had a Higher Trend on a Higher Base Trend 5.1% Trend 4.4% PMPY

 2008 Express Scripts, Inc. All Rights Reserved. 27 Children Had a Higher Trend on a Lower Base PMPY Trend 5.5% Trend 6% Trend 3.3% Trend 4%

 2008 Express Scripts, Inc. All Rights Reserved. 28 Top Therapy Classes 2007

 2008 Express Scripts, Inc. All Rights Reserved. 29 Top Therapy Classes 2007

 2008 Express Scripts, Inc. All Rights Reserved. Therapy Class #1: Lipids Generics Drove Down Trend 30 Class Trend: -9.0%

 2008 Express Scripts, Inc. All Rights Reserved. Therapy Class #1: Lipids Generics Drove Down Trend 31 Class Trend: -9.0%

 2008 Express Scripts, Inc. All Rights Reserved. 32 Active Management Drove Down Lipid Trend

 2008 Express Scripts, Inc. All Rights Reserved. Therapy Class #21: Hypnotics Generics Drove Down Trend 33 Class Trend: -7.7%

 2008 Express Scripts, Inc. All Rights Reserved. Therapy Class #21: Hypnotics Generics Drove Down Trend 34 Class Trend: -7.7%

 2008 Express Scripts, Inc. All Rights Reserved. 35 Hypnotic Trend Reversed in 2007

 2008 Express Scripts, Inc. All Rights Reserved. 36 Active Management Drove Down Hypnotic Trend

 2008 Express Scripts, Inc. All Rights Reserved. 37 Member Share of Costs is Stable

 2008 Express Scripts, Inc. All Rights Reserved. 38 Member Share of Costs is Stable

 2008 Express Scripts, Inc. All Rights Reserved. Average Copays

 2008 Express Scripts, Inc. All Rights Reserved. Average Copays

 2008 Express Scripts, Inc. All Rights Reserved. 41 Trend Forecast 5.9% 4.7%

 2008 Express Scripts, Inc. All Rights Reserved. 42 Trend Forecast 5.9% 4.7%

 2008 Express Scripts, Inc. All Rights Reserved. 43 Trend Forecast 5.9% 4.7% 6.1% 8.2% 5.6% 7.2%

 2008 Express Scripts, Inc. All Rights Reserved. 44 Annual Sales $ Billion Imitrex Lamictal Risperdal Fosamax Effexor XR Other Valtrex Topamax Prevacid Other Cozaar/Hyzaar Lipitor Other Levaquin Zyprexa Actos Protonix Other Brand Drugs Going Generic Soon More than $65 billion within the next five years Adderall XR Seroquel Lexapro Plavix Singulair Other Depakote Flomax Diovan/HCT $13.1 Billion $10.3 Billion $13.7 Billion $9.1 Billion $19.6 Billion Other

 2008 Express Scripts, Inc. All Rights Reserved. 45 Generic Opportunities Remain Strong

 2008 Express Scripts, Inc. All Rights Reserved. 46 Generic Opportunities Remain Strong

 2008 Express Scripts, Inc. All Rights Reserved. 47 Drug Trend Highlights Generic Opportunities Safety concerns Drug Trend at its lowest in over 10 years Benefit design Utilization programs Active Management can drive lower trend $65 billion of drug coming off patent Consumer engagement The opportunities continue to grow