Investor Presentaiton

Figure 2: A hypothetical example of a patient who receives care from vertically integrated entities Aetna Health insurer CVS Caremark PBM Minute Clinic Medical services Omnicare Long term care pharmacy M CVS Specialty Specialty pharmacy Coram Infusion services Patient This hypothetical patient may not be aware the entities providing these services are owned by the same company Accordant Complex disease mgmt CVS Caremark Mail order pharmacy CVS Retail pharmacy XX Source: Auditor created based on CVS and subsidiary information PBMs are involved in many aspects of the prescription drug supply chain, and because of that, there is a risk that reported cost savings may not be accurately reflected. For example, a manufacturer lists the price of a drug at $10. The PBM tells the insurer they can negotiate a discount on the drug, but then the list price goes up to $25. The PBM negotiates with the manufacturer to get the price back down to $10 and can then report to the insurer that they saved $15 on that prescription, when the cost did not actually change from $10. Depending on the contract a PBM has with an insurer, they may get to keep a portion of the rebates, or discounts, received from drug manufacturers. The deals PBMs negotiate with insurers, manufacturers, pharmacies, and other entities are often considered trade secret information and do not have to be shared. This opaque system makes it impossible to understand the actual costs of prescription drugs and has garnered attention at multiple levels of government. In 2022, the Federal Trade Commission announced it would launch an inquiry into PBMs, requiring them to provide information and records regarding business practices owing to the lack of transparency and size of the largest PBMs. The inquiry will target high-risk PBM practices, such as: Fees and clawbacks charged to unaffiliated pharmacies;³ 3 Practice of charging co-payments to consumers for certain prescription drugs that exceed the cost of medicines, with the difference required to be returned to the PBM by the pharmacy. Oregon Secretary of State Report 2023-25 | August 2023 | page 3

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