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Choice Savings Flexibility Employer Member

CIGNA Plan Design & Financial Management

CIGNA Pharmacy Management CIGNA 900 Cottage Grove Road Hartford, CT 06152 www.CIGNA.com “CIGNA”, “CIGNA HealthCare”, “CIGNA Pharmacy Management“, “Return On Health”, and the “Tree of Life” logo are registered service marks of CIGNA Intellectual Property, Inc., licensed for use by CIGNA Corporation and its operating subsidiaries. All products and services are provided exclusively by such operating subsidiaries and not by CIGNA Corporation. Such operating subsidiaries include Connecticut General Life Insurance Company, Tel-Drug, Inc. and its affiliates, CIGNA Behavioral Health, Inc., Intracorp, and HMO or service company subsidiaries of CIGNA Health Corporation and CIGNA Dental Health, Inc. In Arizona, HMO plans are offered by CIGNA HealthCare of Arizona, Inc. In California, HMO plans are offered by CIGNA HealthCare of California, Inc. In Connecticut, HMO plans are offered by CIGNA HealthCare of Connecticut, Inc. In Virginia, HMO plans are offered by CIGNA HealthCare Mid-Atlantic, Inc. In North Carolina, HMO plans are offered by CIGNA HealthCare of North Carolina, Inc. All other medical plans in these states are insured or administered by Connecticut General Life Insurance Company. “CIGNA Tel-Drug” refers to Tel-Drug, Inc. and Tel-Drug of Pennsylvania, L.L.C. “QuickClick” and “CIGNA Choice Fund“ are registered trademarks of CIGNA Intellectual Property, Inc.

© 2008 CIGNA Pharmacy Management. All rights reserved. 814469

Maximizing the Value of Pharmacy Benefits Helping clients influence outcomes to deliver a Return On HealthSM


CIGNA’s APPROACH TO PLAN DESIGN: Maximum Value, Lowest Net Cost.

Value

Plan Cost

Flexible benefit design

Effective formulary management

Preventive options

Cost management programs

Coverage options Extensive retail network

Outcome Improvement programs Consumer-driven plans


CIGNA Pharmacy Management: Delivering ROH through clinical integration

CIGNA Plan Design & Financial Management: Solutions for improved outcomes at the lowest net cost

The right plan from the right partner: A proven approach to value maximization

As one of America’s oldest and most respected insurance companies, CIGNA understands risk — and our goal is to help our clients minimize theirs. At CIGNA, we help clients design a benefit plan that controls costs, improves member outcomes and helps them reach their plan goals. Our clinically-driven approach to plan design along with our financial management discipline allows us to work closely with clients to develop a plan that provides a long-term solution for controlling costs year after year. And, CIGNA provides clients with a benefit design that maximizes every opportunity to give members the clinical support and medication access they need at the lowest total plan cost. In the end, that translates into a Return On Health that only CIGNA can provide.

CIGNA works with clients to recommend a plan design specifically structured to influence overall health trend — the annual cost of providing all health-related benefits, not just pharmacy benefits. We do this through a clinically-focused approach that puts improving member outcomes at the forefront of reducing overall health trend. And, as only an insurance company can, CIGNA provides risk-based products for customers who want the ease, convenience and certainty that an insured plan provides. Because our business involves managing risk, we provide solutions that help our self-insured clients mitigate their risk. Always driven by our commitment to engage members and improve clinical outcomes, our plan design approach is supported by four key areas that drive lower total costs: 1. Flexible benefit structures that help you design a customized plan that’s tailored to your unique needs. 2. Clinically-based formulary management that enables members to obtain the medications they need while managing pharmacy spend. 3. Cost and Clinical Management add-on options that clients can leverage to further drive down costs while engaging members to make more informed, cost-effective choices.

What does this mean to you? As a single provider of medical and pharmacy benefits, CIGNA is uniquely capable of customizing a plan that balances member care with financial performance. Through our value maximization approach to plan design and financial management, we offer customized plan design solutions that drive positive outcomes at the lowest total cost. That’s the peace of mind you get from working with CIGNA — a Return On Health.

4. Consumer-Driven Health Plan (CDHP) support to assist HRA/HSA CIGNA Choice Fund clients by educating their members on how to maximize their plan benefits. For CIGNA, working closely with clients to maximize plan value is not a new approach — we’ve always been committed to showing clients exactly how our programs and services work to offer the most clinically-appropriate drugs to members at the lowest total plan cost. Through flexible and consultative plan design support, aggressive contracting strategies and clinically-based formulary management practices, CIGNA maximizes the investment employers make in the health of their employees and the financial success of their benefit plan.

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Plan Design Flexibility: Benefit structures and consultative support for greater savings

Formulary Management: Clinical expertise and strategic business analysis for greater value

CIGNA offers a suite of pharmacy plan design options that complement our medical capabilities. Key options include:

CIGNA offers standard three-tier and four-tier formulary options that separate prescription medications into categories and copayment or coinsurance levels with varying degrees of member contribution to fit your benefits strategy. Our standard three-tier incentive formulary separates prescription medications into three categories and copayment levels and allows for different degrees of member cost share. We help clients develop a plan design that appropriately balances medication access and cost share levels to promote the use of generics and low cost, therapeutically equivalent brand medications. We work with clients to address unique needs, and can provide customized solutions such as the inclusion of injectible specialty medications or lifestyle drug options on a fourth tier. And we’ll communicate formulary coverage rules with members so they understand how to use their plan to stay compliant with their medication therapies and to save money.

• Copayment and coinsurance cost share choices • Deductibles • Home delivery pharmacy benefits • Standard formulary that balances member choice and plan savings Through an on-going consultative relationship, CIGNA supports our clients’ need to maintain an affordable pharmacy benefit. Working closely with our clients, we develop a thorough understanding of their unique membership and plan needs. We analyze plan costs at a macro level to determine what programs and incentives can be used to drive member actions that reduce long-term plan costs. We also monitor plan performance and make recommendations on changes that can improve member outcomes to increase savings.

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With our pulse on emerging industry trends, coupled with our understanding of our clients’ goals, we strive to ensure our clients’ plans deliver results today and continue to provide cost savings and promote healthier member outcomes year after year. As a CIGNA client, you can be assured that you’re getting the best plan for your specific goals while giving your employees options and tools that empower them to make informed decisions.

What does this mean to you? An effective plan is one that’s customized to meet current plan and member needs as well as one that is strategically designed to mitigate future changes that can impact drug spend. CIGNA can help you design a plan that’s not only effective today, but also ready to adjust to future market changes so that you can continue to have a high-performing plan tomorrow.


To help ensure members have access to safe, effective and affordable medications, CIGNA formulary decisions begin with our Pharmacy and Therapeutics (P&T) Committee, which reviews new medications in the market and determines their coverage and formulary placement. Our P&T Committee performs a rigorous clinical and quality review of new medications to determine that they are safe and effective. If the Committee concludes that a new drug provides no clinical difference, the decision whether or not to include the drug on our formulary is referred to a CIGNA business decision team. This team analyzes issues such as cost and member satisfaction before determining if the drug should be placed on the formulary and on which tier it will reside.

When it comes to our formulary management, we also take a proactive approach — long before a medication is available in the market, a CIGNA team of clinical pharmacists tracks its development through the Food and Drug Administration (FDA) submission and approval process. In doing so, our team can prepare for the possibility of a “blockbuster drug” and determine an interim coverage position prior to FDA approval and product launch. By analyzing the medication pipeline and planning for new drugs in the market, we can better manage the impact new drugs will have on your plan design and can make suggestions on how you can continue to effectively manage your drug spend.

Blockbuster drug lifecycle strategies Blockbuster brand — Non-preferred tier 4 — Step Therapy prior authorization

Generic Incent home delivery

OTC OTC coverage options

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Additional Plan Options: Creating a customized, high-performing plan CIGNA’s goal is to help clients design a benefit plan that speaks to their unique needs. We do this by offering a suite of plan design options that clients can choose to address specific membership needs and plan goals. By offering these additional benefit features, clients gain a deeper level of plan customization that leverages our clinical expertise and strategic plan design approach to maximize plan value.

Cost Management Programs Step Therapy Programs: Easing the transition to generics and lower-cost alternatives This cost management program is designed to gradually encourage the use of generics and lower-cost medication alternatives by giving members an initial grace period for filling brand-name prescriptions before requiring them to use lower-cost alternatives. As a key component of the program, we also educate members on the merits of generics, easing their transition to clinically-appropriate lower-cost alternatives. 4

OTC Programs: Encouraging members to try over-the-counter alternatives For members who can benefit from over-the-counter alternatives to prescriptions they are currently taking, CIGNA offers money-saving coupons for trying medications such as Prilosec OTC® and Alavert®.

Outcome Improvement Programs Identifying and connecting gaps in care Through programs such as our Narcotics Therapy Management and Complex Psychiatric Case Management, we work with physicians to identify and address gaps in care and promote more-informed dialogues between physicians and their patients. By using integrated medical, behavioral and pharmacy information we educate physicians and members and promote healthier member behaviors that reduce long-term costs.

Retail Network Extensive retail network that works for you Through our retail pharmacy network consisting of over 57,000 retail pharmacies (chains and independents), we offer comprehensive retail pharmacy access for members in urban, suburban and rural areas. Some clients, however, may wish to adjust their retail network coverage to meet specific needs. Through our Out-of-Network Retail Coverage option, clients can choose to extend coverage to a pharmacy not in the retail network.

Home Delivery Options Driving mail order utilization CIGNA offers a range of options for clients looking to drive down costs by taking advantage of the plan savings that CIGNA Home Delivery Pharmacy provides. Through greater unit cost discounts, CIGNA’s home delivery pharmacy provides a strong incentive for clients interested in maximizing plan and savings to encourage or require members taking maintenance medications to fill them through CIGNA Home Delivery. Aggressive plan design strategies encompass requiring members to fill prescriptions exclusively through CIGNA Home Delivery after a certain number of fills at retail. Or, clients may opt to provide continued retail coverage. Member cost share may increase after the fill threshold is reached and if the member continues to fill their maintenance prescriptions at retail. Other clients may wish to take a more educational approach by communicating the convenience and savings members may enjoy by filling their maintenance prescriptions through home delivery.


Coverage Options for Additional Products Providing enhanced coverage where you need it the most Some clients may wish to extend coverage for specific drugs that are not part of our standard plan offerings such as lifestyle and weight-loss drugs, certain vitamins and drugs used to help smoking cessation. We also offer clients the opportunity to extend coverage for some selfadministered injectable drugs that are typically covered under medical plans. In covering under pharmacy as well, we help clients address the special needs of their employees while obtaining the cost-savings benefits of our aggressive pharmacy contracting strategies.

Preventive Prescription Drug Option Improving compliance to reduce long-term costs In recent years, with the industry focus on consumer-driven health plans, CIGNA has recommended 100 percent coverage for in-network medical preventive care as a core feature of our Choice Fund — our Health Retirement Account/Health Savings Account (HRA/HSA) medical plan designs. CIGNA’s Preventive Prescription Drug Option complements our Choice Fund medical products through an integrated approach to preventive care. We offer plan sponsors the ability to waive the deductible for preventive drugs, allowing members to receive these drugs through a member cost-share requirement, typically coinsurance. 5 The following conditions are those for which medication therapy is considered preventive: • Hypertension • Hyperlipidemia • Diabetes • Asthma • Osteoporosis • Stroke • Pregnancy And to promote generic use and further reduce costs for members and plan sponsors, we suggest a plan design that provides 100 percent coverage with no deductible requirement when members make the choice to purchase a generic preventive medication. By eliminating the perceived “high deductible barrier” and reducing their out-of-pocket costs, members are more likely to comply with their prescription therapies.


Consumer-Driven Health Plans: Support that engages members to better understand their choices and manage their costs CIGNA provides integrated medical and pharmacy management that maximizes the value of consumerdriven plans for clients and members. Through CIGNA’s Choice Fund Health Retirement and Health Savings Accounts (HRAs and HSAs), CIGNA gives clients and members a single, integrated view that enables them to more effectively manage their benefits. By providing both medical and pharmacy benefits, CIGNA is uniquely able to provide the comprehensive support that lessens a client’s administrative burden and empowers members to manage their benefits for improved outcomes at an overall lower cost.

With a comprehensive suite of support services, CIGNA helps members understand the options available to them and the associated costs. Through myCIGNA.com, members gain online tools that enable them to track combined deductibles and fund balances and roll over unused funds. They can compare information on health providers to make more informed choices, and contact CIGNA Health Advisors to support better outcomes. CIGNA’s Choice Fund products are designed to offer employers and their employees affordability and an opportunity to make choices that meet their individual needs.

Through our Choice Fund Products, CIGNA clients benefit from: • Real time pharmacy/medical plan integration • Ability to administer out-of-pocket and lifetime maximum data end-to-end

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• Integrated clinical management and disease management programs that help improve member outcomes for reduced medial expenses • HRA and HSA plan designs that integrate pharmacy and medical to support the federal requirement of a single integrated medical and pharmacy deductible for Health Savings Accounts • Simplified administration • Flexible in- and out-of-network benefits with incentives that encourage in-network utilization

What does this mean to you? CIGNA Choice Fund can reduce overall pharmacy costs by improving compliance, better managing waste and driving the use of lower-cost options such as generics and home delivery use.


CIGNA Choice Fund reduces costs for clients and members, while helping to improve overall compliance The results1 of a two-year study of health care claims show: • Medical and Pharmacy costs for CIGNA Choice Fund members were lower than traditional plan costs •

Medical costs were more than 12 percent lower for first-year CIGNA CDHP members, and 5 percent lower for second-year members relative to HMP and PPO members

Pharmacy costs were 6 percent lower even though utilization rates and days’ supply were higher, indicating that members were compliant with their medications while exercising lower-cost options such as generic medications and mail-order purchasing.

• Member out-of-pockets costs were similar to traditional plans for first year CIGNA CDHP members, and actually decreased for second year members • Preventive care visits increased, and medical care visit compliance improved • Medication compliance improved. The use of maintenance medications that support chronic conditions increased while their overall costs decreased.

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Based upon 470,000 CIGNA Choice Fund and traditional HMO and PPO members.

Pharmacy Utilization 7

CIGNA Choice Drug Trend

-6%

Traditional Drug Trend

-5%

-1%

16% 12.6% 12% 8%

6.4%

5.9% 4%

4.6%

5.8%

1.3% 0%

Eligible Charges

Days Supply

Eligible Charges/ Day


Medicare Part D Subsidy Option Under the Medicare Modernization Act of 2003 (MMA), employers can reduce their costs for continuing to provide pharmacy coverage to their Medicare population. This government program helps employers achieve financial savings via subsidy payments from the government based on costs incurred for providing pharmacy coverage to their Medicare-eligible retiree plan members. While many benefit management companies charge fees to provide utilization and cost data and leave plan sponsors on their own to work through the administrative process of filing with the government, CIGNA’s approach is very different. Our industry-leading Medicare Part D Employer Subsidy Option uses a consultative approach to guide employers step-by-step through the process of obtaining a tax-free subsidy and provides comprehensive and transparent retiree drug utilization and cost data reports — all at no cost to plan sponsors, unlike other benefit managers.

Financial Management: Minimizing risk for maximum plan potential With our roots in the insurance industry, CIGNA is accountable for managing risk — one third of our business is risk-based. That means that our performance is tied to the financial success of our clients’ plan. All of our plan design programs and options are designed to maximize value for our clients: • CIGNA continuously works to deliver lowest net cost through generic maximization. • We also encourage members to use preferred brands. This approach lowers your overall net cost by generating rebates either through a client-specific sharing arrangement or, to the extent retained by CIGNA, as a contributor that allows us to maintain a lean cost structure. • We employ aggressive contracting strategies to offer a formulary that has the right balance of quality care while lower lowering health trend. Through the use of appropriate plan designs and clinical programs, CIGNA lowers your overall net cost while at the same time improving medical outcomes.

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Our business is getting you a Return On Health Managing risk takes experience. Managing care takes clinical expertise. Doing it all . . . that’s our business. In an industry where pharmacy management often produces commoditized programs, our focus is helping clients design a customized plan that works hard to keep members healthy while working wisely to lower costs. Choose CIGNA as your partner and see how you can achieve a Return On Health.


Choice Savings Flexibility Employer Member

CIGNA Plan Design & Financial Management

CIGNA Pharmacy Management CIGNA 900 Cottage Grove Road Hartford, CT 06152 www.CIGNA.com “CIGNA”, “CIGNA HealthCare”, “CIGNA Pharmacy Management“, “Return On Health”, and the “Tree of Life” logo are registered service marks of CIGNA Intellectual Property, Inc., licensed for use by CIGNA Corporation and its operating subsidiaries. All products and services are provided exclusively by such operating subsidiaries and not by CIGNA Corporation. Such operating subsidiaries include Connecticut General Life Insurance Company, Tel-Drug, Inc. and its affiliates, CIGNA Behavioral Health, Inc., Intracorp, and HMO or service company subsidiaries of CIGNA Health Corporation and CIGNA Dental Health, Inc. In Arizona, HMO plans are offered by CIGNA HealthCare of Arizona, Inc. In California, HMO plans are offered by CIGNA HealthCare of California, Inc. In Connecticut, HMO plans are offered by CIGNA HealthCare of Connecticut, Inc. In Virginia, HMO plans are offered by CIGNA HealthCare Mid-Atlantic, Inc. In North Carolina, HMO plans are offered by CIGNA HealthCare of North Carolina, Inc. All other medical plans in these states are insured or administered by Connecticut General Life Insurance Company. “CIGNA Tel-Drug” refers to Tel-Drug, Inc. and Tel-Drug of Pennsylvania, L.L.C. “QuickClick” and “CIGNA Choice Fund“ are registered trademarks of CIGNA Intellectual Property, Inc.

© 2008 CIGNA Pharmacy Management. All rights reserved. 814469

Maximizing the Value of Pharmacy Benefits Helping clients influence outcomes to deliver a Return On HealthSM


CIGNA 04