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1. 8 Essential Cost
Management Programs
September 28, 2016

2. 2
 Monthly hepatitis treatment cost and claimants*
 Newer rare disease drugs
Breakthrough drugs come at a significant cost
Drug Disease Annual cost
ORKAMBI Cystic Fibrosis $260K
RAVICTI Urea Cycle Disorder (Rare Disease) US$250K - $290K
STRENSIQ Pediatric-onset Hypophosphatasia $285K - $2.5M
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
$14,000
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
EligibleCosts
DistinctClaimants
Ave Cost per Claimant Distinct Claimants
*TELUS Block of business

3. 3
Looking ahead : Pipeline Drugs of Interest
Name
Therapeutic
Area
Manufacturer(s) Indications Cost Impact and Notes
Patisiran Immune system Alnylam
Pharmaceuticals, Inc.;
Arbutus Biopharma;
Genzyme Corporation;
Sanofi
Hereditary ATTR
Amyloidosis with
Polyneuropathy (hATTR-
PN)
Likely $250K per year or more. Disease affects 10,000 people
worldwide. Precise Canadian
prevalence unknown. Life expectancy
without treatment is 5-15 years from
symptom onset.
Herpes Zoster
Vaccine
Shingrix
Infectious disease GlaxoSmithKline plc Herpes Zoster (shingles)
vaccine
Similar to cost of Zostavax High expectations for manufacturer
revenue, but private plan impact is
lower due to the development of public
vaccination programs (e.g. Ontario). In
the absence of a public program, expect
similar uptake to Zostavax for plans that
cover vaccines.
Crisaborole Dermatology Anacor
Pharmaceuticals, Inc.
Atopic Dermatitis Up to $20K per year High potential impact. Will be the first
topical, non-biologic therapy with anti-
TNF activity. Basically, works like an
injectable biologic, but is non-biologic,
and topically administered.
Acalabrutinib Cancer Acerta Pharma BV;
AstraZeneca PLC;
Merck & Co., Inc.
Many cancer
indications.
Chronic Lymphocytic
Leukemia (CLL) is most
advanced.
$100K per year, similar to other
CLL therapies
High potential impact. Impact will grow
as the drug is approved in more tumour
types.
Cannabidiol
Epidiolex
Central Nervous
System
Gw Pharmaceuticals Intractable epilepsy:
Dravet and Lennox-
Gastaut syndromes.
Up to US$2,5K to US$5K per
month. This is considerably
more than the cost of medical
marijuana, as well as more than
the cost of other therapies for
this type of epilepsy.
Expected 9K-10K Canadian patients.
Impact could be very high in the
absence of Prior Authorization to control
potential off-label use.

4. 4
 Specialty drugs have grown to almost a quarter of total costs but remain
less than 1% of claims.
 Non-speciality drugs represent 77% of total eligible costs and an important
opportunity for savings
Speciality Drug Share of Cost & Claims
10%
11%
13%
14%
17%
18%
21%
23%
0.3% 0.3% 0.3% 0.4% 0.4% 0.5% 0.5% 0.5%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
17%
19%
21%
23%
25%
2008 2009 2010 2011 2012 2013 2014 2015
ShareofTotalEligibleCost
% of Total Cost % of Total Claims
*TELUS Block of business

5. 5
 70% of plan sponsors faced with a cost increase made no changes to their
plan design in response.*
The 8 Essentials
DrugBenefitPlanStrategies
Drug
Choice
Claim
Cost
Cost
Sharing
 Managed formularies
 Generic Substitution
 Prior Authorization
 Step Therapy
 Co-pays / Co-insurance
 MAC Pricing
 Dispensing Fee Limits
 Trial Drug
*TELUS Health 2014 Plan Sponsor Survey

6. 6
 There is no one definitive
approach to managing drug
spend
 a few changes bundled together can
have a significant impact on
improving the bottom line.
 As TELUS experienced in its own
Living Lab, these programs have
the potential to generate
significant savings depending on
the design of the existing plan.
A combination of different drug cost management
programs can maximize savings
Cost management
programs
TELUS plan
savings**
○ Mandatory generic substitution 2.3%
○
Maximum Allowable Cost
pricing
4.4%
○ Dispensing fee cap 1.9%
○ Prior authorization program 0.9%
Total potential
savings
9.5%
*As of December 2014; **Results are strictly based on the TELUS plan. Other plan sponsors'
results may differ based on province, plan design and other factors.
https://s3.amazonaws.com/telus_sante/wp-content/uploads/2015/09/article-
medmanagement_en.pdf

7. 7
 Plan sponsors can take advantage of the many existing programs
to reduce costs without having a material impact on their plan
members’ experience.
 Drug cost management tools can be layered to meet the needs of
specific customers. It is not a one-size fits all approach.
 Communication with plan members is key to the success of
implementing new drug cost management programs.
Key Takeaways

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