1. Kids going back to school Leaves Changing / Cooler Weather
C2 Solutions
Favorite Part of Fall?
Use your marker tool to choose your favorite part of fall
Football!
Kids going back to school
Leaves Changing / Cooler Weather
Other
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2. Engage in the Session We need your input today!
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Engage in the Session
We need your input today!
We will ask for your input and experience throughout the session
Use the pen tool circled on the left to participate in the session
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3. Use your marker tool and plot your response.
Think about the last customer meeting discussing pharmacy that you attended. How would you rate it from the customer’s perspective?
Meaningless
Meaningful
Use your marker tool and plot your response.

4. C2 Solutions
Pharmacy Training
Session 1
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5. Introductions Kristen Boyd Robert Lewis
C2 Solutions
Introductions
Kristen Boyd
Director of Training, Development and Engagement
Robert Lewis
Business Development Executive
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6. Agenda 1 Pharmacy Ecosystem 2 Carve-In Versus Carve-Out 3
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Agenda
Pharmacy Ecosystem 1
Carve-In Versus Carve-Out 2
Carrier Pushback 3
Industry Landscape 4
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7. What is the Pharmacy Ecosystem?
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What is the Pharmacy Ecosystem?
A system, or group of interconnected elements, formed by the interaction within their environment.
The Pharmacy Ecosystem is very complex with many moving parts, constantly evolving and interacting with the others.
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8. C2 Solutions
Common Questions 1
Who are the key players in the pharmacy ecosystem? 2
What is the dynamic between drug manufacturers and wholesale distributors? 3
What is the process for determining a drug’s cost? 4
Where does a company like RxBenefits fit in the system?
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9. Meet the Players—Pharmacy Distribution Payer Model
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Meet the Players—Pharmacy Distribution Payer Model
Pharmaceutical Manufacturer
Wholesale Distributor
Retail Pharmacy
Mail Order Pharmacy
Specialty Pharmacy
Employee Benefits Consultants
Pharmacy Benefit Managers &
Administrators (PBMs/PBAs)
Employer (self-insured)
Delivered & taken by Member
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10. Pharmaceutical Manufacturer
C2 Solutions
Pharmaceutical Manufacturer
A commercial business licensed to research, develop, market and/or distribute drugs, most commonly in the context of healthcare.
What are some examples of Pharmaceutical Manufacturers?
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11. Wholesale Distributors
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Wholesale Distributors
Wholesale distributors purchase pharmaceutical products from manufacturers and sell drugs to pharmacies an other customers.
What are some examples of Wholesale Distributors?
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12. Pharmacies (Retail, Mail, and Specialty)
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Pharmacies (Retail, Mail, and Specialty)
The science and technique of preparing and dispensing drugs. It is a health profession that links health sciences with chemical sciences and aims to ensure the safe and effective use of pharmaceutical drugs.
What are some examples of retail, mail order, and specialty pharmacies?
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13. Pharmacy Benefit Managers & Administrators (PBMs)
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Pharmacy Benefit Managers & Administrators (PBMs)
PBMs Administer pharmacy benefits for health plans, government agencies, employers, and others
What are some examples of PBMs?
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14. Other Players Employee Benefit Consultants Employers (Self-funded)
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Other Players
Employee Benefit Consultants
Employers (Self-funded)
Members (Employees & Dependents)
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15. Detailed Pharmacy Distribution Payer Model with RxBenefits
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Detailed Pharmacy Distribution Payer Model with RxBenefits
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16. Discussion: The Pharmacy Ecosystem
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Discussion: The Pharmacy Ecosystem
Now that you understand the Ecosystem, how does this relate to the conversations you have with employers?
What information would you share with employers?
How would you discuss this with employers?
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17. Carve-In Versus Carve-Out
C2 Solutions
Carve-In Versus Carve-Out
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18. Important Questions to Ask
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Important Questions to Ask
What type of arrangement is it?
What are the pricing terms and guarantees?
What are the definitions of generic and brand drugs?
Are there opportunities for periodic market checks?
What are your rights to audit and exit the contract, if necessary?
Are rebates competitive with offering credits for both brand and specialty?
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19. Type of Arrangement: Employers Have Options
C2 Solutions
Type of Arrangement: Employers Have Options
Visibility, options, control, and the power to choose are all elements of an optimized and successful pharmacy arrangement
Carve-In
Carve-Out
Health carrier holds the PBM contract
Employer holds the contract
Relationship with insurer; Rx managed “behind the scenes”
Relationship directly with Pharmacy Benefit Manager (PBM)
Focus on medical
Focus on pharmacy
“One size fits all”
Customized plan can offer performance guarantees
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20. Common Issues with Pharmacy Models
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Common Issues with Pharmacy Models
Carve-In
Carve-Out (Direct)
Lack of pharmacy contract and guarantees X
Can feel lost in the crowd X
Clinical management programs have little flexibility X
Interpreting pharmacy data without an expert can be difficult X
Difficulty getting answers on pharmacy X
Understanding what pharmacy programs are right for you difficult X
Limited Access to Data X
Member services more interested in call goals than the member issue X
Data/Reporting not actionable X
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21. C2 Pharmacy Analysis Details
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C2 Pharmacy Analysis Details
Total Pharmacy Analyses for Pharmacy Administration
24.17%
Carve-In
Groups analyzed with average savings of
24.24%
Carve-Out
23.98%
Average Overall Savings % for Carrier Groups
24.85%
Aetna
7 Groups analyzed with avg. savings of
30.13%
Anthem
15 Groups analyzed with avg. savings of
22.86%
Cigna
11 Groups analyzed with avg. savings of
25.61%
Humana
3 Groups analyzed with avg. savings of
19.49%
UHC
26.67%
UMR
29 Groups analyzed with avg. savings of
24.36%
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22. Discussion: Carve-In vs. Carve-Out
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Discussion: Carve-In vs. Carve-Out
What do you see most within your clients- carve-in or carve -out?
What has been successful in helping to move a client toward carving –out?
What obstacles do you face?
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23. Carrier Argument for Carving-In
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Carrier Argument for Carving-In
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24. Carrier Pushback Example on the Carved-Out Model
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Carrier Pushback Example on the Carved-Out Model
Single Eligibility
“We can do emergency “adds” if needed to incumbent PBM”
Single Banking / Billing
“Billing and Banking is going to be more difficult”
Combined summary benefit coverage notices
“We provide HCR combined summary of benefit notices”
Carve-In Says…
Reality
Eligibility is shared. Whether carved-in model with carrier and their pharmacy provider or carved-out with the medical carrier to an outside PBM.
Billing is withdrawn from the client's account with no increased burden on HR.
Summary of benefit coverage notices, shifts in the market, new drugs to market, and any other necessary language is regularly communicated to clients.
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25. Carrier Pushback Example on the Carved-Out Model (continued)
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Carrier Pushback Example on the Carved-Out Model (continued)
Member Support
“We provide one number for everything”
Member Disruption
“Changing pharmacy means members will need new scripts”
Clinical Programs
“There’s no charge for our clinical programs”
Carve-In Says…
Reality
Our model is entirely focused on pharmacy service with a boutique service model geared to support clients and members.
During the implementation process information and necessary files are requested to minimize issues.
Clients have access to robust clinical programs at a lower cost than if they purchased direct.
The C2 Value Story

26. Input from the group on your case study?
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Case Study
Input from the group on your case study?
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27. Industry Landscape—General Trends
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Industry Landscape—General Trends
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28. Global Factors Impacting Drug Pricing
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Global Factors Impacting Drug Pricing
Taxation
Rationing
Aging Population
Taxes on importing pharma profits from overseas
Not all pharma products available in all countries
Driving demand and innovations
The C2 Value Story

29. Industry Landscape—General Trends
C2 Solutions
Industry Landscape—General Trends
Specialty
New Drugs to Market
Rising Drug Costs
Rebate Value
240 new specialty drugs and 116 new specialty indications hitting the market by 2018
Specialty spend projected to quadruple by 2020
Potential savings with Biosimilars
Known medications reintroduced as “new” product with a slight variation on the original
Expect to see more development around orphan diseases
Overall spending on prescription medications is predicted to rise 8%- 10% annually
Specialty continues to increase health care costs; 35% of all drug spend in 2016 was specialty
Potential impact of 12%- 15% of an employer’s gross spend
Strong rebates can maximize savings and minimize cost
Value based contracting driving rebates
Will impact all employers
The C2 Value Story

30. Pharmacy Spend Cost Drivers
C2 Solutions
Pharmacy Spend Cost Drivers
Price Inflation
Spend under medical benefit
New, high-cost specialty drugs
Utilization increases,
drug mix
High-cost categories and classes
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31. What’s on the Horizon Post-Election Unknowns
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What’s on the Horizon
Post-Election Unknowns
Federal Regulators Target Prices
States try to enact fragmented laws
Passage of 21st Century Cures Act
Likely repeal or significant over-haul of ACA
Fair Drug Pricing Act requiring drug makers to justify pricing
Preserve Access to Affordable Generics Act to prevent pay-for-delay agreements
Vermont law requires pharma to disclose reasons for price increases
California tried to require pharma to match Veterans Administration pricing. Struck down, but same issue on Ohio ballot in 2017
Designed to help speed FDA approval of new drugs
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32. C2 Solutions
What’s Next?
Complete Part 1 of the “Top 10 Pharmacy Questions” worksheet
Attend the next Pharmacy Training
Join the session on September 18 or 20
Think Pharmacy
Integrate pharmacy into your planning and customer conversations
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33. C2 Solutions
Questions?
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