abarcahealth

1www.abarcahealth.com

Jan 27, 2012Ajamu KitwanaKristine CassRobin BoseEnhancing Growth Opportunities

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Agenda

Project Overview and Approach

Findings & Recommendations

Competitive Advantages in Puerto Rico Context

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Agenda




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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 softwareRxPlatform : user interface for PBM/client

Range of business intelligence and reporting capabilities

Company Overview

• manage generic substitutions

• provide information on drug utilization

• manage manufacturer rebates

TM

TM

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Organizational Growth # Employees, 2010-2012

abarca has grown rapidly as the team has won new customer contracts

Company Highlights47,000 covered livesPharmacy program administrator for

Mi Salud (1.4 million lives)

Customers2009: 2 contracts (PICA, Mi Salud)2012: 6 contracts

2010 2011 2012

TechnologyClinicalBusiness

2534

59

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Project Inquiry

Market Readiness

Are there opportunities for expansion in PBM services to:

• Colombia ?• Costa Rica ?• Dominican Republic ?• Panama ?• Peru ?

Company Readiness

How can abarca prepare for growth opportunities, including international expansion?

Should abarca expand beyond PR to Latin America?

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Customer Interviews

Company Review

3 of 6 existing customers:• ASES• First Plus• PICA

1 potential customer

Company financials

New business pipeline

Core/ancillary services & technology offering

Internal Interviews

Management Team

Product: • Technology Group• Business Intelligence

Project Management

Pharmacy Network Management

PBM Operations

Business Development and Business Analytics

Account Management

Customer Service

Latin America Country Research

State of Healthcare System

Healthcare Provision

Healthcare Financing

Pharmaceutical Market

Pharmaceutical Regulations

Health Indicators

Anticipated Changes

Business Environment

Approach

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Agenda




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Long Term Focus

Intermediate Focus

Immediate Focus

• 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

Key Findings

Selected Latin American markets lack favorable healthcare infrastructure

Company should consider cost of diverting resources away from local opportunities

Recommended Growth Plan

Team Recommendations

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Customer engagement

Decision support

Team linkages

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2

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Immediate Focus: Suggested Growth Priorities

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How customers feel about relationship with other PBMs

1 2 3

How customers feel about their relationship with abarca

Customer Engagement

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How customers feel about relationship with other PBMs

1 2 3

How customers feel about their relationship with abarca

[A leading competitor] has its home office in the States…we have to go through so many

layers to get something done.

I like that they are local, not too big, and able to

discuss what is important in Spanish.

Good access to top management, openness,

candor, willingness to help

Customer Engagement

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1 2 3

How customers view tools and data available for decisions

How abarca can help them to make decisions

Decision Support

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1 2 3

abarca two years ago abarca two years from now

Team Linkages

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Agenda




Puerto Rico competitive advantages that support abarca strategic opportunities

Puerto Rico Advantages abarca health Opportunities

Connection to US Market

Link to Latin America

Healthcare/Pharma Industry Cluster

Educated Talent Pool

• Engage Latin America customers at all levels in Spanish• Draw on cultural ties with Latin America to help penetrate

relationship-based Latin American markets

• Hone strategy through local rivalries; continue to challenge US firms• abarca has built on technology and expertise developed through

Borschow Medical Supply and PICA

• 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

• 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

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Lessons Drawn for Economic Development in Puerto Rico

• 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

Puerto Rico Advantages Economic Development Opportunities

Connection to US Market

Link to Latin America

Industry Cluster

Talent Pool

• 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

• Encourage local competition• Develop industries that build on existing infrastructure• As LatAm markets develop, bring US expertise with LatAm cultural awareness

• 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

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Questions & Discussion

abarcahealth

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