www.abarcahealth.com Jan 27, 2012 Ajamu Kitwana Kristine Cass
Robin Bose Enhancing Growth Opportunities 1
Slide 2
Agenda Project Overview and Approach Findings &
Recommendations Competitive Advantages in Puerto Rico Context
2
Slide 3
Agenda 3 Project Overview and Approach Findings &
Recommendations Competitive Advantages in Puerto Rico Context
Slide 4
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 PRs 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 software RxPlatform : user interface for
PBM/client Range of business intelligence and reporting
capabilities 4 Company Overview manage generic substitutions
provide information on drug utilization manage manufacturer rebates
TM
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5 Organizational Growth # Employees, 2010-2012 abarca has grown
rapidly as the team has won new customer contracts Company
Highlights 47,000 covered lives Pharmacy program administrator for
Mi Salud (1.4 million lives) Customers 2009: 2 contracts (PICA, Mi
Salud) 2012: 6 contracts 25 34 59
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Project Inquiry 6 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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7 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
Slide 8
Agenda Project Overview and Approach Findings &
Recommendations Competitive Advantages in Puerto Rico Context
8
Slide 9
Long Term Focus Intermediate Focus Immediate Focus 9 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
Slide 10
10 Customer engagement Decision support Team linkages 1 2 3
Immediate Focus: Suggested Growth Priorities
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11 How customers feel about relationship with other PBMs 123
How customers feel about their relationship with abarca Customer
Engagement
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12 How customers feel about relationship with other PBMs 123
How customers feel about their relationship with abarca [A leading
competitor] has its home office in the Stateswe 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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13 123 How customers view tools and data available for
decisions How abarca can help them to make decisions Decision
Support
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14 123 abarca two years ago abarca two years from now Team
Linkages
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Agenda Project Overview and Approach Findings &
Recommendations Competitive Advantages in Puerto Rico Context
15
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Puerto Rico competitive advantages that support abarca
strategic opportunities Puerto Rico Advantagesabarca 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
Slide 17
Lessons Drawn for Economic Development in Puerto Rico 17 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 AdvantagesEconomic 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