ORLANDO, Fla.--(BUSINESS WIRE)--May 15, 2007--Employers attending the 2007 Rx Collaborative Annual Meeting today were among the first to view and evaluate the Towers Perrin Reference Formulary System, the first and only formulary independent of variables traditionally required by pharmacy benefit managers (PBMs), such as plan design and financial factors -- like rebates and charge backs -- often at play in the commercial market.

"Formularies are lists of drugs that are covered for the copay, and they have been the basic tool for clinical utilization management over the past 20 years," said Bridget Eber, Pharm.D., Towers Perrin's national pharmacy practice leader. "Until now, employers have not taken an active role in customizing them for their population."

"The Towers Perrin Reference Formulary is a clinically appropriate list of pharmaceutical products that are used to treat the majority of medical situations," added Gary Owens, M.D., a pharmacy management expert and leader of the team of clinicians responsible for developing the Towers Perrin Reference Formulary System. "It has a primary focus on products for maintenance therapy of chronic common conditions and places emphasis on the use of generics when available and on high-value branded products. It is also independent of variables such as rebates and other discounts."

A development team first identified more than 12,000 FDA-approved drugs on the market and grouped them into 16 therapeutic chapters by condition and organ system/function. The team then focused on the five therapeutic chapters that drive the majority of utilization and cost, researched the pipeline for new drugs and patent expirations and analyzed a host of formularies currently in use, including Medicare Part D formularies and generic-only formularies, to identify best practices. Towers Perrin engaged a pharmacy & therapeutics (P&T) committee to conduct an independent review of the TP Reference Formulary.

"The Towers Perrin Reference Formulary System allows employers to determine the best way to provide easy access to affordable medicines for employees and their dependents," added Eber. "One of the primary drivers of savings will be drug mix, which means the percent of Towers
Perrin Reference Formulary System drugs relative to non-reference drugs. In contrast to popular three-tier formulary designs recommended by PBMs, the savings will not depend on cost shifting."

The Towers Perrin Reference Formulary System is not intended to be used as a stand-alone formulary but rather as a benchmarking tool for employers to compare their current formulary with one that has been optimized to achieve maximum cost savings while maintaining quality. The Towers Perrin Formulary System allows employers to identify for the first time a true cost baseline for their pharmacy plans. Then, by comparing their current formularies with the Towers Perrin Reference Formulary, employers can identify and prioritize cost saving opportunities or "buy up" as appropriate, factor in market influences, and ultimately design and implement a realistic pharmacy management strategy with measurable results. Initial analyses have shown that employers can recognize savings in a range of 10 to 30% for themselves and their employees by following the Towers Perrin Reference Formulary System.

According to Phil Belcher, manager of health and welfare plans for Eastman Chemical and one of the employers attending the 2007 Rx Collaborative Annual Meeting, "The Towers Perrin Reference Formulary System gives Eastman a valuable tool for objectively evaluating innovative opportunities to strengthen our prescription drug program,
which ultimately adds value for both Eastman and our employees."

Using the Reference Formulary System, Towers Perrin has built sophisticated predictive modeling capabilities for use by Rx Collaborative members. The Towers Perrin Rx Collaborative is the largest employer drug purchasing coalition of its kind and the only one offering financial transparency. The membership currently includes more than 75 employers, representing a combined $2 billion in annual
drug spending. Rx Collaborative members will be able to use the Towers Perrin Reference Formulary System to model the impact of formulary and benefit decisions on drug trends as well as the impact of supply-side influences such as new products, generic introductions and physician practice patterns.

"In 2004, with the introduction of the Towers Perrin Rx
Collaborative, we successfully led the way in transforming the PBM business model to provide transparency, one of the two principles that the Rx Collaborative is based upon," said Paul Schott, Towers Perrin principal and Rx Collaborative team leader. "With the launch of the Towers Perrin Reference Formulary System, we continue to fulfill the second founding principle of the Rx Collaborative, to use data to help employers better manage their pharmacy benefit programs. The sophisticated predictive modeling capabilities of the Towers Perrin Reference Formulary System allow us to consider the uniqueness of each employer's drug program in developing employer-specific recommendations."

Since formulary development is a dynamic and ongoing process, the Towers Perrin Reference Formulary will be regularly reviewed and updated by an independent, clinically focused P&T committee and updated as changes in the marketplace occur.

About Towers Perrin

Towers Perrin is a global professional services firm that helps organizations improve their performance through effective people, risk and financial management. Through its HR Services business, Towers Perrin provides global human resource consulting that helps organizations effectively manage their investment in people. Areas of
focus include employee benefits, compensation, communication, change management, employee research and the delivery of HR services. The firm's other businesses are Reinsurance, which provides reinsurance intermediary services, and Tillinghast, which provides management and
actuarial consulting to the financial services industry. Together these businesses have offices and business partner locations in the United States, Canada, Europe, Asia, Latin America, South Africa, Australia and New Zealand. More information about Towers Perrin is available at www.towersperrin.com/hrservices.

Copyright Business Wire 2007

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