Summary

• 2001 historical drug trend

  • HNT 9% (15% before benefit design changes)
  • Industry 14% to 19%

• External forces driving drug costs in 2002

  • New multi-source generics
  • Potential OTC drugs
  • Lackluster pipeline

• Health Net strategies to control trend

  • Benefit Design (new affordable products, increased cost sharing)
  • Generic Incentive Programs
  • Traditional Managed Care Strategies

• HNT 2002 drug trend below industry (7% to 9%)

• Factors impacting trends in 2003 and beyond (benefit design, generics and OTC)

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