EXHIBIT_L-13_Background_Information_for_Retail_Network_Reimbursement _Table_L-1_(Aug_13 _2013).pdf

Exhibit L-13 TRICARE Pharmacy Program

HT9402-13-R-0001 L-13 Page1 of 1

Background Information for Retail Network Reimbursement, Table L-1

The following information was used by the Government in the development of Table L-1, and is provided for informational purposes only. The escalation factors used in arriving at prescription quantities and Average WAC prices from one option period to the next coincide with the government’s estimate as to the release date for this solicitation.

Estimated Quantities – The term quantity refers to the volume of prescriptions, by type (Non- Specialty/ Specialty /Brand/Generic). These quantities are based on government pharmacy utilization data for the period November 1, 2011 to October 31, 2012. Quantities were then escalated to coincide with the option periods of the contract. The following matrix provides Government-derived escalation factors for each respective prescription type, by option period.

Rx Type Non-Specialty Brand

Non-Specialty Generic

Specialty Brand

Specialty Generic

Baseline Volume of Prescriptions

17,986,707

48,974,331

210,368

27,260

Baseline to Op Per 1 Escalation (annualized)

10.0%

15.0%

OP 1 Escalation 3.0% 4.0% 4.0% 4.0%

OP 2 Escalation 3.0% 4.0% 4.0% 4.0%

OP 3 Escalation* 7.0% 8.0% 8.0% 8.0%

OP 4 Escalation 3.0% 4.0% 4.0% 4.0%

OP 5 Escalation 3.0% 4.0% 4.0% 4.0%

OP 6 Escalation 3.0% 4.0% 4.0% 4.0%

OP 7 Escalation 3.0% 4.0% 4.0% 4.0%

*TRICARE for Life mandatory mail pilot is scheduled to end in 2017. We estimate approximately 3.3M prescriptions will return to the retail point of service.

Note: The prescription quantities in Table L-1 were rounded to the nearest 100,000 prescriptions for non-specialty drugs, and to the nearest 100 prescriptions for specialty drugs.

Average WAC -- This is the weighted average ingredient cost per prescription based on the Wholesale Acquisition Cost (WAC). The average WAC prices in Table L-1 represent prescriptions filled for DoD beneficiaries by TRICARE retail network pharmacies in FY 2012, escalated by 4.2% annually. The average WACs were rounded to the nearest whole dollar.