Solution in Drug Plan Management 2011September 8, 2011

Basil RoweVice President, Total Rewards and Shared Services

Shoppers Drug Martbbrowe@shoppersdrugmart.ca

More Ways To Care, More Ways to Benefit

SDM implemented in January 2011 a new leading edge benefits plan

Formulary Solutions Chronic Care SolutionsWellness Solutions

Plan Spending

-14.7%

Enrolment in mentored and self-help programs

20%

Participation in Diabetes Management Program

40%

The Case for Change

SDM average amount per claim was above benchmark for its corporate plan and below benchmark for its retail plans.

Benchmark

SDM Corporate

Plan

SDM Retail Plans

Year 2009

SDM wanted to group all SDM employees under one best-in-class plan

There was a desire to leverage organizational capabilities to offer value-added services

Benefit plans were inconsistent and inequitable across employee groups

One Employer’s Reality

2010 Review Learnings

Central office employees’ plan design was not optimized

Increased genericization and a decrease in generic drug prices

would only provide temporary savings

Change was required

2009(A) 2010(F) 2011(F) 2012(F) 2013(F)

Corporate Trajectory prior to provincial reforms

2012-13 Growth: 7%

Impact of legislative changes and genericization of blockbuster drugs

2012-13 Growth: 7%

Our Path To Success

Defining Solution Implementing

Monitoring Communicating

Objectives and Opportunities

ObjectivesWhat are my goals?

OpportunitiesWhat are my cost drivers?

Improve the health of our employees and their families

Reduce the cost risk to the organization

Engage, empower and share accountability for better health

Integrate our benefit offering

Chronic Conditions & Rare Diseases

Open Formulary & Specialty Drugs

Lack of Coordination of Benefits

Drugs & Short and Long-Term Disability

Defining Solution

From Ideas to Solutions – Previous PlanDefining Solution

Manage Risks

Open Formulary

Lower Cost Alternative (LCA)

Utilization management

Change Behaviours

EAP

Manage Future Costs

From Ideas to Solutions – Current SolutionsDefining Solution

Formulary Solutions

Custom formulary managed in-house

Tiered copay

Generic leadership

Utilization management

Wellness Solutions

Health risk assessment

Mentored and self-help programs

Mental health & stress triage and referral to EAP

Personal wellness account & incentives

Chronic Care Solutions

Diabetes

Rheumatoid arthritis

Multiple sclerosis

Cancer

Balancing the Experience of Members and EmployerImplementing

Pharmacy Expertise

GenericLeadership

P&TCommittee

L & DIncubator

PharmacyTraining

Grand-Fathering

ConsistentExperience

1-800Number

DrugLookup

Tool

Human Resources Perspective

Engaging Members at Home, at Pharmacy, at Work

CustomizedBranding Branded

Drug Card

LaunchVideo

Town Halls

Newsletters

In-Store Handouts

Drug Lookup Tool

WellnessContest

Screensavers

Targeted Mailings

Plan Documentation

Communicating

Engaging Members at Home, at Pharmacy, at WorkCommunicating

CUSTOMIZED BRANDING

SCREEN SAVER

BRANDED DRUG CARD

BENEFITS AT A GLANCE

WELLNESS CONTEST

NEWSLETTER

DRUG LOOK UP TOOL KIT

POSTERS

Focusing on Outcomes for Future Improvements

Our goal is to have an integrated view of our benefits investments and to be proactive in improving our plan

Sample Scorecard Trend

Benefit Design

Average amount paid per employee

Average amount paid per claim

Average number of claim per employee

YOY growth in average $ per employee

COB % of total eligible amount

% of 90 Day fill for Maintenance Drugs

Savings from Tiered Co-Insurance

Formulary

Savings from Managed Formulary

Generic Penetration

OTC % of total amount paid

SRx % of total amount paid

Other

In-Network Usage

Monitoring

Member Experience Survey

45% of employees participated in the post-enrolment survey

Drug / Prescription Coverage ranks as #1 in importance

88% of employees find that the plan is more sustainable for the company in the

long term

Employees found communication effective – but needed more information on how to

make better use of their benefit choices

From LCA to Generic Leadership

Defining Solution Implementing

Monitoring Communicating In-store handouts Direct mailing Newsletter Drug Lookup Tool

Grandfathering of members on non-preferred drugs

Best in classgeneric dispensingat pharmacy

Increase price differentialthrough tiers

Lower reimbursement for unique drugs with generic in therapeutic class

Monthly reporting on generic penetration and efficiency

Opportunity report Results: +8% in

generic penetration

More Ways To Care, More Ways to Benefit

Plan Spending

Generic Penetration

Enrolment in mentored and self-help programs

Participation in Diabetes Management Program

-14.7%

+8%

20%

40%

Our 6-Month Results

Medication Review & Retroactive DUR

Expanded Specialty Disease Management

Step Therapy

Our FutureOur People

Lessons Learned

Focus on Members Experience

Change Management Engagement Integrated

Information

Monitor Results Opportunity Analysis

Experience Survey Scorecard

AccessPharmacy Expertise

Health Care Knowledge

In-Store Feasibility

Industry Dynamics