Third Party Billing Derek Robertson Consultant The Hemophilia Alliance

1. Third Party BillingDerek Robertson Consultant The Hemophilia Alliance 12th Annual 340B Coalition ConferenceWashington, D.C. July 15, 2008

2. The Issues � Public Payers Medicare Part D Contracting Medicaid Billing at acquisition or carve-out Dispensing Fee Specialty Pharmacy Carve outs Medicaid Managed Care

3. The Issues � Private Payers Private Insurers consolidating companies Contracting with PBMs Forming their own PBMs and specialty pharmacies Signing national contracts

4. What are �Specialty Pharmaceuticals�? Drugs which are used to treat conditions which require a high level of specialized care usually over a prolonged period of time Drugs are characterized by high cost and in many instances are biologicals with complex manufacturing processes Clotting factor fits perfectly

5. Growth of Specialty Pharmacy In 2006 specialty pharmacy drug spend was $54 million or 20% of overall drug spend By 2010 it will increase to $99 million Source: Specialty Pharmacy News, July, 2007. Atlantic Information Services

6. Why is This Happening? PBM acquisitions of Specialty Pharmacies New PBM contracts with Managed Care Increased drug utilization New software tracking Specialty Pharmacy drugs previously managed under medical benefit

7. A Note on Employers Large employers find their own insurance plans and third party administrators Perhaps a bigger challenge than payers How do we reach the �powers that be� at large employers like GM and BOA? Will they change plans for 1or 2 EEs? Employer can overrule payer when the plan is self funded

8. What Can We Do? Be proactive. We need to talk with payers It is not enough to say, �don�t sign a national contract�. We must explain alternatives such as the benefit of the 340B Program Don�t approach payer as an adversary but as a potential ally who needs education and information

9. Contact Information Derek Robertson Tel: 410-465-3611 Email: derekrobertson@verizon.net