Solution in Drug Plan Management 2011 September 8, 2011

1. Solution in Drug Plan Management 2011 September 8, 2011 Basil RoweVice President, Total Rewards and Shared Services Shoppers Drug Mart bbrowe@shoppersdrugmart.ca

2. More Ways To Care, More Ways to Benefit SDM implemented in January 2011 a new leading edge benefits plan Formulary Solutions Wellness Solutions Chronic Care Solutions Plan Spending Enrolment in mentored and self-help programs Participation in Diabetes Management Program -14.7% 20% 40%

3. The Case for Change SDM average amount per claim was above benchmark for its corporate plan and below benchmark for its retail plans. Benefit plans were inconsistent and inequitable across employee groups SDM wanted to group all SDM employees under one best-in-class plan SDM Corporate Plan There was a desire to leverage organizational capabilities to offer value-added services Benchmark SDM Retail Plans Year 2009

4. One Employer’s Reality 2012-13 Growth: 7% Corporate Trajectory prior to provincial reforms 2012-13 Growth: 7% 2010 Review Learnings Impact of legislative changes and genericization of blockbuster drugs 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)

5. Our Path To Success Defining Solution Implementing Monitoring Communicating

6. Defining Solution Objectives and Opportunities Objectives What are my goals? Opportunities What are my cost drivers? Improve the health of our employees and their families Chronic Conditions & Rare Diseases Reduce the cost risk to the organization Open Formulary & Specialty Drugs Engage, empower and share accountability for better health Lack of Coordination of Benefits Integrate our benefit offering Drugs & Short and Long-Term Disability

7. Defining Solution From Ideas to Solutions – Previous Plan Open Formulary Change Behaviours Manage Future Costs Manage Risks Lower Cost Alternative (LCA) EAP Utilization management

8. Defining Solution From Ideas to Solutions – Current Solutions Custom formulary managed in-house Health risk assessment Diabetes Formulary Solutions Wellness Solutions Chronic Care Solutions Tiered copay Mentored and self-help programs Rheumatoid arthritis Generic leadership Mental health & stress triage and referral to EAP Multiple sclerosis Utilization management Personal wellness account & incentives Cancer

9. Implementing Balancing the Experience of Members and Employer Generic Leadership P&T Committee Grand- Fathering Consistent Experience Human Resources Perspective Pharmacy Expertise L & D Incubator Pharmacy Training 1-800 Number Drug Lookup Tool

10. Communicating Engaging Members at Home, at Pharmacy, at Work Customized Branding Plan Documentation Branded Drug Card Targeted Mailings Launch Video Town Halls Screensavers Newsletters Wellness Contest In-Store Handouts Drug Lookup Tool

11. Communicating Engaging Members at Home, at Pharmacy, at Work Customized Branding SCREEN SAVER BENEFITS AT A GLANCE DRUG LOOK UP TOOL KIT WELLNESS CONTEST Branded Drug Card POSTERS NEWSLETTER

12. Monitoring 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 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

13. From LCA to Generic Leadership • Increase price differentialthrough tiers • Lower reimbursement for unique drugs with generic in therapeutic class • Grandfathering of members on non-preferred drugs • Best in classgeneric dispensingat pharmacy Defining Solution Implementing • Monthly reporting on generic penetration and efficiency • Opportunity report • Results: +8% in generic penetration • In-store handouts • Direct mailing • Newsletter • Drug Lookup Tool Monitoring Communicating

14. More Ways To Care, More Ways to Benefit Our People Our 6-Month Results Our Future Medication Review & Retroactive DUR Plan Spending -14.7% Expanded Specialty Disease Management Generic Penetration +8% Step Therapy 20% Enrolment in mentored and self-help programs 40% Participation in Diabetes Management Program

15. Lessons Learned Change Management Engagement Integrated Information Focus on Members Experience Opportunity Analysis Experience Survey Scorecard Monitor Results Health Care Knowledge In-Store Feasibility Industry Dynamics AccessPharmacy Expertise