www. abarcahealth .com

1. Jan 27, 2012 AjamuKitwana Kristine Cass Robin Bose EnhancingGrowthOpportunities www.abarcahealth.com

2. Agenda Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context

3. Agenda Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context

4. Company Overview Pharmacy benefit management (PBM) service provider to health plans, government agencies/programs, employers, unions, pharmaceutical manufacturers, and other clients. • Founded in 2005 as internal PBM for PICA, a Medicare Part D plan in Puerto Rico • Spun off from PICA in 2010 • Successful in adding new customers and revenue sources, including administrative services for Mi Salud, one of PR’s largest health plans abarca transmits data between health plans and in-network pharmacies to help: • verify patient eligibility and co-payments • process and adjudicate drug claims • manage drug formulary lists Proprietary Technology: RxEngine: claims adjudication software RxPlatform: user interface for PBM/client Range of business intelligence and reporting capabilities • manage generic substitutions • provide information on drug utilization • manage manufacturer rebates TM TM

5. abarca has grown rapidly as the team has won new customer contracts Organizational Growth # Employees, 2010-2012 Company Highlights 47,000 covered lives Pharmacy program administrator for MiSalud(1.4 million lives) Customers 2009: 2 contracts (PICA, MiSalud) 2012: 6 contracts 59 34 25

6. Project Inquiry Should abarca expand beyond PR to Latin America? Market Readiness Company Readiness Are there opportunities for expansion in PBM services to: How canabarcaprepare for growth opportunities, including international expansion? • Colombia ? • Costa Rica ? • Dominican Republic ? • Panama ? • Peru ?

7. Approach Latin America Country Research Customer Interviews Internal Interviews • State of Healthcare System • Healthcare Provision • Healthcare Financing • Pharmaceutical Market • Pharmaceutical Regulations • Health Indicators • Anticipated Changes • Business Environment • 3 of 6 existing customers: • ASES • First Plus • PICA • 1 potential customer • Management Team • Product: • Technology Group • Business Intelligence • Project Management • Pharmacy Network Management • PBM Operations • Business Development and Business Analytics • Account Management • Customer Service Company Review Company financials New business pipeline Core/ancillary services & technology offering

8. Agenda Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context

9. Team Recommendations Key Findings Recommended Growth Plan • Grow market share • Establish market leadership in Puerto Rico • Grow organization • Acquire customers outside PR, leveraging PR connections and knowledge of US regulation • Build global presence while maintaining PR market leadership • Selected Latin American markets lack favorable healthcare infrastructure • Company should consider cost of diverting resources away from local opportunities Immediate Focus Intermediate Focus Long Term Focus

10. Immediate Focus: Suggested Growth Priorities Customer engagement Decision support Team linkages 1 2 3

11. Customer Engagement 1 2 3 How customers feel about their relationship with abarca How customers feel about relationship with other PBMs

12. Customer Engagement 1 2 3 How customers feel about their relationship with abarca How customers feel about relationship with other PBMs [A leading competitor] has its home office in the States…we have to go through so many layers to get something done. • Good access to top management, openness, candor, willingness to help I like that they are local, not too big, and able to discuss what is important in Spanish.

13. Decision Support 1 2 3 How abarca can help them to make decisions How customers view tools and data available for decisions

14. Team Linkages 1 2 3 abarca two years from now abarca two years ago

15. Agenda Project Overview and Approach Findings & Recommendations Competitive Advantages in Puerto Rico Context

16. Puerto Rico competitive advantages that support abarca strategic opportunities Puerto Rico Advantages abarca healthOpportunities • Apply US healthcare expertise to compete in niche US markets • Leverage connections with US based pharmacies and manufacturers • Build on presence and credibility in the US to access LatAm markets Connection to US Market Link to Latin America • Engage Latin America customers at all levels in Spanish • Draw on cultural ties with Latin America to help penetrate relationship-based Latin American markets Healthcare/Pharma Industry Cluster • Hone strategy through local rivalries; continue to challenge US firms • abarca has built on technology and expertise developed through Borschow Medical Supply and PICA Educated Talent Pool • Attract top PR talent educated in PR or elsewhere to stay/return • Leverage startup culture and sexy hi-tech and healthcare industries • Attract global talent that is attracted to US opportunities but appreciate Puerto Rican culture and climate

17. Lessons Drawn for Economic Development in Puerto Rico Puerto Rico Advantages Economic Development Opportunities • Newer industries such as those driven by government policies offer a chance to compete with US without being far behind • PR firms can use language and cultural connections to compete in Latino friendly communities in the US Connection to US Market Link to Latin America • Spanish capability at executive levels can be an advantage over US firms in professional services • US ties are also a hurdle to penetrating and understanding Latin American markets Industry Cluster • Encourage local competition • Develop industries that build on existing infrastructure • As LatAm markets develop, bring US expertise with LatAm cultural awareness Talent Pool • Showcase “hot” PR companies: hi-tech, healthcare, startups, etc. • Target US/PR top talent interested in LatAm development. • Reverse the brain drain: encourage PR students who studied in US to return to PR

18. Questions & Discussion