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<br />drug to another if there is a better value out there. Humana, TML and Aetna are our three <br />finalists that we talked about last time. You can also see that there are some migrations. <br />For instance the top drug is Lipitor, which is the number of prescriptions filled for that <br />particular drug and indicates it is a very popular drug. It is in Humana's and TML's 2nd <br />tier but it is in Aetna's 3rd tier. What is the reason for that? Don't they all cost the same <br />regardless of what insurance company you use to administer your plan? The answer is <br />yes! But the reason it is in tier three in Aetna's case is because now there is a generic <br />form of Lipitor. The idea as you will see it expressed in financial terms is if someone <br />wants Lipitor they can certainly still have it, but they will pay a higher co-pay to receive <br />it because there is a generic available that would cost far less. On the second page you <br />will see we have added up all of the drugs specifically used by the actives and retirees <br />here at the City of La Porte. Also, you will see there is not a whole lot of difference <br />averaging the Is, 2s, and 3s between what we have right now with Humana averaging 1.9 <br />Aetna averaging 2.0 and TML averaging 1.7. <br /> <br />Question Karen Beerman: <br /> <br />Are these all of the drugs? <br /> <br />Answer Neal Welch: <br /> <br />No, these are the drugs we saw that were used by actives and retirees at the City of La <br />Porte. <br /> <br />Neal continues with presentation: <br />With regards to Pharmaceuticals we have a retail program and a mail order program. As I <br />said earlier people have a great deal of allegiance to their dentist and to their drugs. <br />That's good, because we want people that are on maintenance medications to take them. <br />Unfortunately we have a lot of people that have problems affording those drugs. So we <br />want to be very sensitive to the issues relating to generic alternatives and substitutes. <br />Developing alternative medication for the same particular illness is something all the <br />formularies are trying to accomplish. Ten or fifteen years ago doctors were real sticklers <br />and would tell you that you better take the brand name drugs only, because that is the guy <br />I go hunting with and etc. Today for routine drugs you rarely find a doctor that will not <br />agree to a generic substitute. As a result, the drug expense in our plan has kind of leveled <br />out. <br /> <br />The next item deals with expense versus revenue in our plan. The question raised was <br />regarding the employer/employee contributions, where are they going versus the cost in <br />our plan? As you can see in 2005 and 2006 the City was contributing money, when we <br />had some steep increases to try and keep up with the cost of the plan. The City pledged <br />an additional contribution increase in 2007 it looks like some of our claims cost have <br />leveled off. The difference between the contributions and expenses is now called <br />reserves. You are contributing to yourself and at some time if the delta continues to stay <br />nice and wide we will be able to fully reserve our plan. <br />