TodaySunny with a high of about 87 degrees. Tonight will be partly cloudy with a low of 69 degrees.

7 a.m. Breakfast and Registration8 a.m. General Sessions featuring

Dave Snow, Thomas Scully, and Dr. Robert Epstein

11 a.m. Breakout Sessions12 p.m. Lunch1 p.m. Panel Discussion2 p.m. Networking Activities

MAY 18, 2004

TODAY’S AGENDA

ORLANDO WEATHER

CLOSING MARKET SUMMARY

Dow Jones NASDAQS&P 50010-Yr BondNYSE VolumeNADAQ Volume

-105.96 (-1.06%) -27.61 (-1.45%)-11.60 (-1.06%) -0.0891,430,067,000 1,529,431,000

© 2004 Medco Health Solutions, Inc. All rights reserved.

Medco Study Reveals Pediatric SpendingSpike on Drugs to Treat Behavioral Problems

Spending on drugs primarily used to treat attention deficit hyperactivity disorder(ADHD) surged 369 percent for children under age 5, while the number of kids takingone or more prescription medicines to treat behavior-related conditions hit nearly 9 per-cent for those children taking at least one medication overall, according to new datareleased Monday at the Medco Health Solutions, Inc. 2004 Drug Trend Symposium.

“This analysis provides a striking commentary on the state of pediatric treatment inthis country, as well as the costs shouldered by parents whose children live with theseconditions,” said Dr. Robert Epstein, Medco’s chief medical officer. “It goes withoutsaying that early detection and appropriate treatment of these conditions is extremelyimportant, but the emphasis is on 'appropriate' with an eye on cost-effective therapy, aswell.”

77 Percent Four-Year Spending Rise Linked to Increased Use and Medicine Costs

Specialty Drug Spending Climbs 26 Percentin 2003; Driven by Arthritis,CancerTherapies

For Monday, May 17, 2004

Proportion of Overall Spending on Expensive Treatments Highest Among Children

TomorrowMostly sunny with a high of 87 degrees and a chance of afternoon showers.

Fueled by a biotech surge, spending on high-cost “specialty” medications for peoplewith complex, chronic conditions, such as rheumatoid arthritis or infertility, grew 26.6percent in 2003. This represents a growth rate that is approximately double the nationalaverage increase in drug spend (13.4 percent), according to new data released today byMedco Health Solutions, Inc.

Medco's 2004 DrugTrend Report, whichreviewed the company'stop 150 clients, revealeddata that points toward twotherapeutic categories -rheumatoid arthritis andmultiple sclerosis - whichcombined contributed tonearly 50 percent of phar-maceutical spending in thespecialty drug category in2003. Rheumatoid arthritisdrugs alone made up 50percent of drug trend (theyear-over-year growth inspending) under the phar-macy benefit.

23.7%

8.8%

23.5%

17.0%

13.3%

7.8%

5.9%Multiple Sclerosis

Rheumatoid Arthritis

Hepatitis C

Infertility

Growth Hormone

Other

Cancer

Specialty Drugs (distribution of spend by class)

Source: Medco data

Continued on Page 2

Continued on Page 3

© 2004 Medco Health Solutions, Inc. All rights reserved.

Page 2

Continued from Page 1The research reviewed the prescription

data of 300,000 children ages 19 andyounger in four major categories of behav-ioral medications used to treat a variety ofconditions including ADHD, depression,autism and conduct disorders. Althoughrecent studies have found an increase inthe use of antidepressants, the Medcoresearch found an even greater growth inthe use of medications to treat otherbehavioral conditions.

Major findings of the analysis:- Prescription drug spending for behavioralconditions rose 77 percent between 2000and 2003 due to increased costs andincreased use.

- In 2003, spending on behavioral medica-tions to treat children overtook both theantibiotic and asthma categories, which aretraditionally high-use categories in pedi-atric medicine.

- The number of children on behavioralmedications jumped more than 20 percentbetween 2000 and 2003, outpaced only bythe increase of children on drugs to treatgastrointestinal conditions, whichincreased by nearly 28 percent.

- Among the largest increases were med-ications primarily used to treat attentiondeficit/hyperactivity disorder (ADHD) --where spending increased by 183 percentfor children overall, and by 369 percentfor children under age 5. Utilization inpreschoolers was up 49 percent from 2000to 2003.

- Spending on antidepressants for childrengrew 25 percent, while use of these drugsrose 27 percent between 2000 and 2003.A review of 2004 data shows that of thechildren on at least one prescription med-ication in the first quarter of this year, thenumber of children using antidepressantsincreased by 15 percent over the first threemonths of 2003.

- The number of children on medicationsto treat severe behavioral conditions related to autism and conduct disorders

increased by more than 60 percent from2000 to 2003, while spending on thesedrugs rose 142 percent in the pediatricgroup. Among children ages 5 through 9,utilization was up 85 percent, while spend-ing in this category grew 174 percent.

- Although children continue significantuse of antibiotics, allergy and asthmadrugs, the rate of increase in utilizationand cost for these categories has beenmore moderate over the past four yearsthan for behavioral medications; antibi-otics showed no change in utilization and a24 percent increase in spending; the use ofallergy treatments increased 3 percent,while spending decreased by 7 percent;and asthma medications showed a 12 per-cent increase in utilization and a 24 per-cent rise in costs.

Pediatric Drug Trend - A Window into Future Costs

Medco's annual Drug Trend Reportexamines the drug spending experiencerepresentative of its more than 60 millionmembers to help identify factors that con-tribute to the rising costs of prescriptiondrug care. The total number of dollarsinvested in prescription medications forpatients under age 19 remains a relativelymodest percentage compared to other agegroups. However, the rate of increase inspending was significant -- an indicator offuture trends.

Surprisingly, the average unit cost perchild per day is more than 60 percent high-er than that of seniors. Although childrentake fewer medications than seniors, med-ications used by children have the highestaverage cost -- $2.12 per day for childrenversus $1.29 per day for seniors.

“The unit costs of medications for chil-dren outweigh those of all other agegroups, so we have made it a priority tohelp our clients understand the factors thatdrive pediatric drug trends, and offer solu-tions to those challenges,” said Epstein.“Through education and encouragingappropriate medication use, plans can helpcurb the explosive trend in the pediatric population.”

Medco's analysis uncovered additional drug

trend drivers in the pediatric market:

Biotech/specialty medicationspending highest among pediatrics:Only a very small proportion of childrenare prescribed specialty medications,although there has been significantgrowth in this area. Select biotechnologydrugs contribute a larger portion of over-all drug spending among children thanany other age group. Among children,spending growth from 2000 to 2003 wasgreatest for select biotechnology medica-tions (127 percent) and rheumatologicaltherapies (44 percent) within the specialtyarea. Additionally, one of the key costdrivers in the asthma category wasXolair, a new biotech medication to treatasthma in children 12 years and older.

Diabetes treatment rising more slowly: Spending on diabetes therapies increasedby only 7 percent, a significantly lowerannual rate of increase than 2002 (20 per-cent) and 2001 (23 percent). Diabetestherapy utilization fell 3 percent in 2003,following three consecutive years ofgrowth -- potentially reflecting a movetoward lifestyle changes such as diet andexercise as a first line course of therapy.

Gastrointestinal medications continue growth among infants:Spending on ulcer and acid-reflux med-ications for children younger than fiverose 26 percent last year. The class con-tinues to be one of the fastest growingamong the pediatric age group, perhapsrelated to the new treatment indicationsfor these medications in children 2 andolder.

Pediatric Spending

www.drugtrend.com

www.drugtrend.com

© 2004 Medco Health Solutions, Inc. All rights reserved.

Page 3

Continued from Page 1Current spending on specialty drugs is

approximately $25 billion and is expectedto reach $40 billion by the end of 2006.The annual cost of specialty drug therapycan range from $6,000 to more than$350,000 per patient.

“The pipeline for biotechnology drugshas become the fastest growing segment ofdrug trend in America,” said Dr. AlanLotvin, president, Specialty PharmacyServices, Medco. “To aggressively managecosts associated with specialty pharmaceu-ticals, Medco focuses on addressing thespend that is often buried within majormedical claims. Through a proprietaryintegrated data management system, we canhelp health plans and employers managethe rising costs of these expensive medica-tions, while also delivering a high standardof personalized patient care.”

The specialty drug trend analysis, high-lighted in the Drug Trend Report, uncoversgrowth in spending and use of particularhigh-cost medications, including:

- Rapid rise in rheumatologics:Spending on treatments for rheumatoidarthritis increased 80.6 percent, and utiliza-tion increased 71.2 percent. Drug trend forrheumatologic conditions overall rose 64.5percent last year, driven by a 28.8 percentincrease in unit costs and new drug intro-ductions.

- Growth among children: In 2003, spe-cialty medications comprised the largestproportion of the total prescription drugspend among children under 19 years ofage - 8 percent. The 35-49 age group hadthe second largest proportion of specialtyspend at 5 percent. Specialty drugs in sen-iors 65+ made up only 1 percent of theirdrug spend.

- Specialty Drivers: Besides the dramaticincrease in trend for rheumatologics, cancerand hemophilia drugs drove trend in 2003with jumps of more than 33 percent and 28percent respectively.

- Overflowing Pipeline: More than 195biotech drugs are in Phase II or Phase IIIclinical development. Currently, 178biotech drugs are in development for cancertherapies; 47 for infectious diseases; 26 forautoimmune diseases; and 21 forAIDS/HIV.

“As specialty medication use grows, healthplans would be well advised to considerdeveloping specific strategies to deal withthe potentially destabilizing cost implica-tions,” said Lotvin. “By consideringoptions, such as the integration of majormedical and pharmacy claims for specialtymedications, tiered co-pays geared specifi-cally for specialty medications, and coordi-nated clinical support services, plans canbetter equip themselves to address the chal-lenges brought by this continually emergingcategory of treatment.”

Specialty Drug SpendingDrug Trend & Spend

Cost Containment Strategies

Mail Order for Maintenance Meds:Prices for maintenance medications are sig-nificantly lower at the average mail orderpharmacy than at retail, and can provide upto 10 percent savings for health plans.Drug trend for the 50 largest Medco clientsenrolled in a mail order program averaged6.9 percent, significantly lower than thenational average of 13.4 percent.

Generics: Drugs with total U.S. sales ofalmost $30 billion could lose patent protec-tion over the next three years. Genericdrugs could comprise as much as 57 per-cent of the prescription drug market by theend of 2005, up from 47 percent in 2002.Generic medications may lower the overallcost of providing a prescription drug planby 4 percent.

Health Plan Changes: Prudent changes toco-payment incentives, capitalizing onover-the-counter (OTC) drugs, and imple-menting coverage rules that require priorauthorization can lead to a dramatic reduc-tion in drug trend.

Integrated Data: Using integrated patientmedical and health plan information canidentify possible drug interactions - thusaverting potential hospitalizations andresulting in significant health plan savings.

Focused on addressing, head-on, some of the most vexing issuesconfronted by prescription benefit plan managers, Medco HealthMonday convened its 2004 National Drug Trend Symposium -Navigating the New Health Economy.

“It's the paradox of the new millennium. Our world is driven by21st Century technology, yet we struggle to overcome the trappings of a20th Century healthcare system,” said David B. Snow Jr., Medco chair-man, president and CEO, who welcomed attendees at a Mondayevening reception. “Now's the time to develop new policies and imple-ment better processes to ensure higher quality, more affordable health-care.”

In conjunction with the Symposium, Medco released its 2004 DrugTrend Report, which examines the factors influencing prescription drugspending, and received broad press coverage Monday in major nationalnewspapers including The New York Times and The Wall Street Journal,and metropolitan dailies nationwide.

Medco Symposium Addresses Prescription Paradox

Medco Chairman David B. Snow Jr. welcomes clients to Medco’s first annual Drug Trend Symposium

In The News… A Healthcare Roundup

www.drugtrend.com Page 4

US Healthcare: Less Bang For The BuckAmericans spent about twice as much,

per person, on healthcare than residents ofeither Canada or the European Union, butdon't feel any better for the investment,according to a study published by twoOregon researchers.

“We spend much more than any indus-trialized country on a per capita basis andwe get much less in return,” report co-author Dr. Bentson McFarland of OregonHealth & Science University told theAssociated Press. “It's a terrible waste ofresources and, of course, it's inequitable.”

At the same time, Americans were farmore likely to describe their own health as“fair” or “poor” than were Canadians andEuropeans across nearly all age groups.Starting at age 30, Americans had a signifi-cantly higher prevalence of poor self-ratedhealth than their Canadian and Europeancounterparts; the disparity between healthcare spending and self-rated healthincreased with age.

The report, published in the June editionof the Journal of Epidemiology & PublicHealth, follows Cover the Uninsured Week,a campaign to secure health coverage forevery American.

Study Links Diabetes and Alzheimer'sDiabetes might significantly increase the

risk of developing Alzheimer's, a study of824 nuns, priests and Catholic brothersfound, bolstering the evidence linking thetwo diseases.

The participants in the study were 55and older when the research began and werefollowed for an average of about six years.Alzheimer's developed in 151 participants,including 31 who had diabetes.

The researchers calculated that diabeticsfaced a 65 percent increased risk of devel-oping the mind-robbing disease.

The link remained strong even when theresearchers factored in the prevalence ofstrokes, which are a common complicationof diabetes and are also believed to raise therisk of Alzheimer's.

Previous research has linked diabetes

with memory problems, and diabetes isknown to damage blood vessels that supplythe brain. But studies looking specifically atdiabetes and Alzheimer's have had conflict-ing results.

Canada Lacks Capacity to MeetAmerica's Pharmaceutical Needs

Demand for pharmaceuticals byAmerican consumers would overwhelmCanadian exporters if Congress changedlaws to liberalize drug imports, according toa University of Texas study releasedMonday.

Marv Shepherd, director of the Centerfor Pharmaeconomic Studies at UT-Austin,analyzed U.S. and Canadian governmentdata. Among his conclusions:

- If all Americans filled their prescrip-tions through Canada, its supply would onlylast 38 days.

- If just half of America's seniors pur-chased their drugs from Canada, that coun-try would need to more than double itspharmaceutical supplies.

- Drug imports to Canada increased dra-matically to $4.7 billion last year from $2.3billion in 1999.

Testifying before the federal Task Forceon Drug Importation, Shepherd said import-ing pharmaceuticals raises major safety con-cerns. “It's only a matter of time before ahorrific tragedy occurs involving importeddrugs,”' he said.

The UT researcher said that Americanspurchasing pharmaceuticals from Canadafrequently, and unknowingly, are buyingdrugs manufactured overseas. That'sbecause Canada imports drugs from morethan 100 nations, including India, Ireland,Ecuador, Columbia, Mexico and Cuba.

By the way… Grape Scott, Wine forSmoother Skin? Tastes great, but also leaves your skin silkysmooth.

Researchers for a beauty company basedin France suggest that vitamins and antioxi-dants found in grapes, when applied to theskin as part of a cream, could have rejuve-

nating effects.Researchers have patented resveratrol,

which acts like an antibiotic to protect grapevines from fungus; but when extracted andapplied to skin, the company claims it firmsthe surface, improves elasticity and stimu-lates cell multiplication.

The company's Merlot Wrap features oilfrom the merlot grape seed combined withbenzonite clay to absorb impurities in theskin; a wrap from wine and honey yeastextract, used to jump-start fermentation inthe wine-making process, focuses on toningand strengthening skin. Other “vinothera-py” treatments include baths enhanced withan extract from a blend of grape skin and stems, which helps remove dead skin cells;and a crushed cabernet scrub that uses realseeds to exfoliate.

© 2004 Medco Health Solutions, Inc. All rights reserved.

Copies of Medco’s Drug Trendreport are available online atwww.drugtrend.com.

Lights! Camera! Action! -- Medcostaff put the finishing touches on thekeynote pavillion at its first annualDrug Trend Symposium.