1. IMS Health Hospital Supply Index™

2. What is the Hospital Supply Index? The Hospital Supply Index is a continuing quarterly database measuring, in projected dollars and units, medical surgical device product purchases by non-federal, short-term acute care hospitals (average patient stay of <30 days) in the continental United States. July 2013 Confidential – Hospital Supply Index 2

3. Applications Competitive pricing strategies Pricing new products Re-pricing existing products Understand competitive % increase in price year over year Quartile analyses (custom) Market size and share By manufacturer, product category or product Understanding size of a market or sub-market Understanding share within the market or share by a manufacturer July 2013 3 Confidential – Hospital Supply Index

4. Applications Competitive strengths and weaknesses Does the competition offer a full or limited product line? Does the competition offer something that we don’t? Competitive entry and exit By market segment and product (observing the rise and decline of new products and technology over time) Growth trends Five years of data on CD – dollars, units, average price July 2013 Confidential – Hospital Supply Index 4

5. Data measures Dollars and Average Selling Price (ASP) Cost to the hospitals for the product whether purchased directly or indirectly Discounts not reflected in the data Units In most cases, units are counted 1, as in 1 catheter In high volume classes, units are calculated based on a larger number, as in dozens of suture strands or hundreds of cotton balls July 2013 Confidential – Hospital Supply Index 5

6. Product coverage 40 major markets – both commodity and specialty markets Products used on, by, or for patients Average price of less than $99,999.99 Must go through the hospitals’ purchase order/receiver system July 2013 Confidential – Hospital Supply Index 6

7. Product classification Products are listed within product category. Product categories in HSI are referred to as class 5’s. A team of product analysts uses various sources (client catalogs, client input, Internet, Gray Sheets) to determine where products belong within the classification structure. July 2013 Confidential – Hospital Supply Index 7

8. Product classification July 2013 Confidential – Hospital Supply Index 8

9. Universe July 2013 Confidential – Hospital Supply Index 9 Short-term, acute care hospitals, defined as: Private not-for-profit and for-profit general hospitals City-County-State General Hospitals

10. Not included in the universe Psychiatric Hospitals Federal Hospitals (VA) Ambulatory Care Centers Free-Standing Surgical Centers Nursing Homes Doctor’s Offices Long-term Hospitals Imaging Centers July 2013 Confidential – Hospital Supply Index 10

11. Sample design The universe is monitored on an ongoing basis and revised annually based upon the most current AHA survey of hospitals The sample is balanced and projected from the nine census regions July 2013 Confidential – Hospital Supply Index 11

12. 2008 Sample design July 2013 Confidential – Hospital Supply Index 12

13. Data collection Sample data is collected at the point that the product moves into the hospital, whether it is received: directly from a manufacturer or indirectly via a wholesaler or distributor July 2013 Confidential – Hospital Supply Index 13

14. Data collection Participating institutions provide purchase information via FTP transmission. Data are received from purchase orders from the receiver’s files. July 2013 Confidential – Hospital Supply Index 14

15. Data projection All Class 5’s are grouped into one of 71 projection classes The 71 projection classes contain similar Class 5’s Each projection class is projected by a factor that is highly correlated with the use of products within that class July 2013 Confidential – Hospital Supply Index 15

16. Projection variable The projection variable is highly correlated to the use of products in that major market. Projection variables include, but are not limited to: −Hospital admissions −Average daily census −Full time hospital personnel (FTEs) −Total surgical operations −Inpatient surgical operations −Total births −Inpatient operations −Total non-payroll expenses −ICD-9 CM procedure codes July 2013 Confidential – Hospital Supply Index 16

17. Converting sample data points to projected national estimates For each unit or dollar in the sample data for a particular projection class, the sample data point is multiplied by a projection factor to convert the sample data to a projected national estimate. July 2013 Confidential – Hospital Supply Index 17

18. Projection factor calculation example Projection Class=gloves Projection Variable=10,000 Employees in universe #Panel Hospitals purchasing gloves =350 hospitals Representation=3000 Employees in sample #Panel member providing corrupt data=5 hospitals/corrupt “product group” data Universe Representation=500 Employees (this is “backed out” of the data) Projection Calculation=Total Universe (10000) ________ Sample (2500) Projection Factor =4 *multiply every glove product $ or unit in the sample by 4 to get to the universe (projected number) July 2013 Confidential – Hospital Supply Index 18

19. Precision tables Projected data is estimated information Use precision tables to quantify the amount of uncertainty Confidence intervals are placed around estimates to indicate a range within which the actual number is expected to fall July 2013 Confidential – Hospital Supply Index 19

20. How is the Hospital Supply Index delivered? Dataview software & database on CD Custom reporting as needed (CMA, ad hoc reports, pricing analyses, regional reports) Delivered primarily quarterly, approximately 6 weeks after close of quarter (example: 4Q of previous year available mid-late February of the following year, depending on deliverable) July 2013 Confidential – Hospital Supply Index 20