Independent licensees of the Blue Cross and Blue Shield Association.® Registered marks Blue Cross and Blue Shield Association.

2007 IHCP Provider Seminar

October 24, 2007

W E L C O M E

2Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

WellPoint WellPoint NextRxNextRx

Stephanie Moss, Pharm.D.

Indiana Pharmacy Director

3Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Formulary Management

Network Management

Clinical Programs

Mail Service

Specialty Pharmacy

• Largest health plan owned PBM• Fourth largest PBM• More than 392 million claims processed in 2006 • Retail network of more than 60,000 pharmacies

Who Are We?

Trend Management

Claims Processing

Medicare Part D

Clinical Analytics

4Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Total System Integration for a Total Wellness Solution

MEDICAL

BEHAVIORAL HEALTH

SPECIALTY RX

PHARMACY

MEDICAL

BEHAVIORAL HEALTH

SPECIALTY RX

PHARMACY

5Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Collaborative Value from an Integrated Model

Medical Policy

Medical Claims

Customer Service

Disease Management

Data Analytics

Account Service

Medical Reports

P&T Decisions aligned with Medical Policy

Claims Data

Customer Service

Clinical Programs

Data Analytics

Predictive Modeling

Account Management

Reporting

Web Services

ID Card

P&T Committee

Pharmacy Claims

Customer Service

Therapy Management

Data Analytics

Account Service

Pharmacy Reports

6Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Managing the Health SpectrumAnthem and Next Rx are striving toward a total health risk program,

rather than simply managing disease states.

People attempting to live healthier lives and remain

consistently healthy.

People diagnosed with chronic illnesses and take medications regularly to control their condition.

People showing symptoms of an illness or condition – opportunity may exist to

adjust lifestyle to progress back to healthy, rather than regress to chronic.

7Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

MEDICALRx

The Value of Integrated BenefitsIntegrating Anthem medical, pharmacy, behavioral health and

specialty pharmacy benefits ensures a focus on improving health and managing total cost of health care for better results.

Stand-alone PBM

TUNNELVISION

Anthem Integrated Benefits

GOAL = MORE PRESCRIPTIONS GOAL = IMPROVE HEALTH AND REDUCE TOTAL COSTS

8Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Integrated Program Example – Bipolar Therapy Mgmt

OUTCOME:DETERIORATION

IN MEMBER HEALTH

CARVE-OUT APPROACH

Behavioral Company identifies

patients with Bipolar

Disorder

Behavioral Company

unable to gain access to daily Rx claims

NO INTERVENTION

INTEGRATED APPROACH

Behavioral Health claims identify patients

Behavioral Health

checks with PBM for daily Rx claims

Compliance algorithm stratifies

patients for appropriate intervention

OUTCOME:BETTER MEMBER HEALTH

Sample program analysis showed an increase in bipolar medicationcompliance resulted in a 91% decrease in behavioral health inpatient costs

and a 51% decrease in behavioral health total costs.

10/31/2007 9Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

360 Health – Proven Integrated Results

2005 2006 Difference

ASTHMA TOTAL MEDICAL*

$PMPM

DIABETES TOTAL MEDICAL*

$PMPM

$205.83

$ PMPM

$222.15 $16.32

$317.79 $387.37 $69.58

2005 2006 Difference

$144.47 $145.39 $0.92

$258.33 $293.81 $35.48

*TOTAL MEDICAL = ER visits, inpatient costs and outpatient costs

vs.

vs.

Anthem Medical Only Anthem Medical and Rx

Analysis shows improved clinical outcomes, as represented by lower emergency room and inpatient utilization and reduced cost of care, in patients managed through

Anthem’s integrated medical and pharmacy benefit.

10Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Specialty PharmacySpecialty PharmacyPrecision RX Specialty SolutionsPrecision RX Specialty Solutions

11Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Provider OfficesJ-Codes

Integrated Strategy

Integrated Strategy for Greater Value

GOVERNED BY COORDINATION OF P&T COMMITTEE WITH MEDICAL POLICY

Provider OfficesJ-Codes

Outpatient FacilitiesJ-Codes

$DRUG PIPELINE

Pharmacy (Retail/Mail)NDC Codes

Specialty PharmacyJ- & NDC Codes

Behavioral HealthJ-Codes

Home & Ambulatory InfusionJ-Codes

COORDINATEDEFFORT LEADSTO BEST VALUE

By appropriately managing the utilization and billing of specialty medications through Anthem’s integrated approach, clients may realize

savings of up to 30% on each specialty medication prescription.

12Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Comprehensive 24/7 Care

Management

Right Drug

Right Patient

Right Price

Right Duration

Preserve pharmaceutical value by managing

appropriate use of the drug and

member compliance to the prescribed regimen

Inherently aligned medical and pharmacy policy results in complete consistency around quality and cost of care for members and clients.

Specialty Pharmacy: The Vision

GOAL

13Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Benefits of Anthem SpecialtyRx Program

BENEFITS

Physicians• Patient and provider

educational services • Patient compliance and

progress reports• Coordination and delivery of

products• Prior Authorization support

Members• Educational programs• Refill reminder/

compliance programs• Improved outcomes• Confidentiality • 24/7 support• Convenient delivery• Access to hard-to-get

drugs and supplies

Payors• Improved compliance• Improved outcomes • Reimbursement

support• Appropriate drug use• Decreased wastage, overuse, and misuse

• Improved member andprovider satisfaction

Manufacturers• Reliable/controlled distribution • Fewer medication returns• Increased product penetration• Access to better prescription and

inventory data

14Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Quality First, Then Cost

Pharmacy and Pharmacy and Therapeutics Therapeutics

(P&T) Committee(P&T) Committee

Clinical appropriateness Clinical appropriateness FIRSTFIRST Financial considerations Financial considerations SECONDSECOND

OUTCOMES ADVISORY COMMITTEEConducts Full Pharmacoeconomic Review

Value Value Assessment Assessment Committee Committee

(VAC)(VAC)

Reviews the financial

components and makes final tier

placement decisions for

drugs

Clinical Clinical Review Review

Committee Committee (CRC)(CRC)

Evaluates and makes clinical

recommendations of each product

and passes these recommendations

to the VAC

ACTUARIAL SUBCOMMITTEE TO VAC (ASVAC)

Analyzes Pharmacoeconomic Results in Coordination with Financial Components

Assessment of Medical and Pharmacy Information

15Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Pharmacy Program UpdatesPharmacy Program Updates

16Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Current Initiatives

Generics First! • Increased use of generics ► decrease in

overall ingredient cost• Potential for savings per prescription ~

$100.00• Recently released generics: Zoloft

(sertraline), Zocor (simvastatin), Norvasc(amlodipine), Lotrel (amlodipine/benazepril)

17Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Major Patent Expirations 2007 and 2008

Actual & Potential 2007 Generics Potential 2008 Generics

• Actonel

• Ambien

• Coreg

• Detrol

• EstrostepFE

• Norvasc

• Prilosec 40mg

• Protonix

• Prozac Weekly

• Toprol XL

• Trileptal

• Wellbutrin

• Zofran

• Zyrtec

• Lamictal

• Nasacort

• Prevacid

• Requip

• Sonata

• Wellbutrin

• Yasmin

• Altace

• Avandia

• Avandamet

• Aricept

• Astelin

• Cardizem LA

• Depakote

• Imitrex

From mid-2006 through 2010, an estimated $46.5 billion of branded drugs –including 19 blockbusters – will lose their patents to generic competitors.

12

18Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Current Initiatives

Write prescriptions for over-the-counter (OTC)• Non-Sedating Antihistamines (NSA)

• OTC generic Claritin is our preferred NSA• Generic Claritin (loratadine) is available

OTC in various dosage forms (avgsavings of $35-50/ RX)

• Proton Pump Inhibitors (PPI)• Prilosec OTC can be dosed up to 80

mg/day• Prilosec is the preferred PPI

19Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

PPIs

•PPIs used to treat HeartburnGERD- Gastroesophageal Reflux DiseaseErosive Esophagitis

•All of the medications in this category are equally effective.

The Purple Pill Story

Non-Preferred Single Source Brand

PreferredCurrent Coverage

$142$20Cost per month

esomeprazoleOmeprazoleChemical Name

NexiumPrilosec OTC

20Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Indiana Mental HealthAll medications available on formularyEdits put in place for patient safety and to increase adherence, and are

consistent among all MCO plans and FFSLevel 1s went into effect on January 1st

The following clinical situations that will require a medical necessity review:• Patient receiving two (2) or more tricyclic antidepressant medications• Patient receiving two (2) or more typical antipsychotic medications• Patient receiving three (3) or more atypical antipsychotic medications• Patient receiving three (3) or more antipsychotic medications• Patient receiving three (3) or more benzodiazepine medications• Patient receiving three (3) or more any antidepressant medications,

excluding trazodoneQuantity limits for behavioral health medications went into effect June

19th to encourage dose optimization of once daily medicationsFor example:

• Zyprexa 5mg BID → Zyprexa 10mg QD• Concerta 18mg BID → Concerta 36mg QD

21Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

P& T Changes to our PDL in 2007

Medications that moved to non-preferred status:

•Altace•Detrol/Detrol LA•Lipitor•Oxycontin•Protonix•Ventolin HFA

Alternatives for non-preferred medications:

•Generic ACEIs•Oxybutynin IR /ER•Simvastatin, pravastatin•Morphine, oxycodone•Prilosec OTC•ProAir HFA

22Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Prior Authorization Process• Physician must complete and fax the appropriate PA form to

WellPoint NextRx• WellPoint NextRx completes a medical review within 24 hours• A letter stating the approval of the PA request is faxed to the

prescribing physician • When a determination cannot be reached with the information

provided on the PA form: • The physician is advised to fax additional medical documentation

• If the decision is a denial: • The physician's letter includes denial reason(s) and Anthem's

physician name who issued the denial • The member's notification contains information regarding their rights

to appeal and their rights to a state hearing• Decisions can be appealed

23Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Pharmacy Contact Information

On the Anthem websitewww.anthem.comState Sponsored business is found under Plans & Benefits Pharmacy Page includes:

• PDL• PA Process • PA forms• PA criteria

Or through the State’s websitehttp://www.indianamedicaid.com/ihcp/HoosierHealthwise/rbmc_in

dex.aspGeneral questions for PBM- 1.866.629.1608PA questions for PBM- 1.877.6652.1223

24Independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

Questions?