M , NJ OULDER, CO CHARLESTON, SC │ SAN FRANCISCO A │ ST ... · Managed Care • Shift to bundled payments throughout post-acute landscape • Acceleration of capitated arrangements

Investor PresentationJune 2016

MOORESTOWN, NJ │ BOULDER, CO │ CHARLESTON, SC │ SAN FRANCISCO, CA │ ST LOUIS, MO │ PHOENIX, AZ

2

Safe harbor statement

This presentation contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to

management. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations

concerning our market position, product expansion, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources

and other financial and operating information. When used in this discussion, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,”

“expects,” “should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking

statements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to

be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements

represent our management’s beliefs and assumptions only as of the date of this presentation. Our actual future results may be materially different from what we

expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ

materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about

our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.

This presentation includes certain non-GAAP financial measures as defined by SEC rules. As required by Regulation G, we have provided a reconciliation of those

measures to the most directly comparable GAAP measures, which is available in the Appendix.

This presentation is made pursuant to Section 5(d) of the Securities Act of 1933, as amended, and is intended solely for investors that are either qualified

institutional buyers or institutions that are accredited investors (as such terms are defined under SEC rules) solely for the purpose of determining whether such

investors might have an interest in a securities offering contemplated by Tabula Rasa HealthCare, Inc. Any such offering of securities will only be made, if made at

all, by means of a registration statement (including a prospectus) filed with the SEC, after such registration statement is declared effective. This presentation shall

not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which

such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. This meeting and any

information communicated at this meeting are strictly confidential and should not be discussed outside of your organization.

Strictly confidential

3

Introductions and presenters

Calvin H. Knowlton, PhDCEO & Chairman of the Board

Brian W. AdamsChief Financial Officer

Orsula Knowlton, PharmDPresident & Director

• excelleRx – Founder and

former CEO; sold to Omnicare

in 2005

• Former President of the

American Pharmacists

Association

• 2015 Remington Medal Honor

Recipient

• 2016 Technology CEO of the

Year, Philadelphia Alliance of

Capital and Technology (PACT)

• excelleRx – Former Manager of

Financial Planning and

Analysis

• KPMG LLP – Former Associate

Director of Finance and

Accounting

• Named one of the “Top CFOs”

in the region in 2014 by the

New Jersey Tech Council

• excelleRx – Former Chief

Marketing, New Business

Development and Strategy

Officer

• NJ’s Best 50 Women in

Business in 2008

• Woman of Distinction 2006, by

Philadelphia Business Journal

• 2013 NJ Garden State

Entrepreneur Excellence Award


Medication Risk Mitigation

4

$15.5 $20.2

Q1 '15 Q1 '16

$2.0 $2.8

Q1 '15 Q1 '16

$48.4

$70.0

FY14 FY15

Tabula Rasa HealthCare at a glance


($ in millions)

Revenue

($ in millions)

Adjusted EBITDA

$3.0

$8.6

FY14 FY15

The problem:

45 to 50 million adverse drug events annually in the U.S.

>100,000 deaths annually due to adverse drug events

Our technology:

Patient-specific, data-driven technology and solutions to

help healthcare organizations optimize medication

regimens of their patients

Our products and services:

• Medication risk mitigation

• Adherence-packaging prescription fulfillment

• Medicare risk adjustment

• Pharmacy cost management

Our clients are financially at-risk:

• Healthcare organizations

• Post-acute care providers

• Medicare managed care organizations

Outcomes:

• Higher quality health outcomes

• Improved patient experience

• Reduced cost of care

>2x client growth in

2015

122 healthcare

organizations

currently being served

96% client retention

rate in 2015

99% revenue

retention rate in 2015


5

Significant unmet need for personalized medication risk management

• 45 – 50 million ADEs from

prescription medications per year in

the United States

• ADEs represent the 4th leading

cause of death in the United States

• ~75% of adults who are

prescribed a medication are non-

adherent

• > 40% of nursing home

admissions are associated with

medication non-adherence

4.4B prescriptions filled in 2015

$425B U.S. spending on prescriptions in 2015

48% of Americans take a prescription medication in any given month

~65% of individuals aged 65+ took three or more medications1

82% risk of an adverse drug event (ADE) with seven or more medications


1 In the period from 2009 to 2012 Medication Risk Mitigation

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Impact of adverse drug events annually in the United States

Physician office visits

3.5 million

Emergency department visits

1 million

Hospitalizations

125,000

Affected hospital stays

2 millionDeaths

100,000

RIP

Increased days per affected

hospital stay

1.7 to 4.6


Due mostly from:

• Accumulative Side Effects

• Multi-drug Interactions Leading to Unintentional Overdosing

And, current medication software addresses neither.


7

Prevailing, non-personalized approach to prescribing medications


Prevailing software with “single, binary medication-to-medication interaction

analysis” contributes to “trial and error” approaches to prescribing medications

Patient Prescribers

Disparate

medication

regimens

This represents the commonplace tool used by pharmacists, EHRs and PBMs


8

Personalized medication regimens enabled by our disruptive solution—addressing

both accumulative side effects & multi-drug interactions yielding unintentional overdosing


PrescribersPatient

Personalized

medication

regimen

Patient-specific information

Tabula Rasa’s proprietary technology

• Optimized drug regimen

• Precision dosing

• Dosage / day / time

• Health literacy aids

• Enhanced outcomes

• Optional adherence-

packaging prescription

fulfillment

Allergies

Medications

Labs

Demographics Genomics

Conditions

Personalized Medication

Risk Mitigation Matrix

Multi–drug risk Drug–gene risk

Bio-availabilityMedication scheduling

risk

Black box warningsSedation risk

Cognitive riskAllergy risk

Renal clearance risk Beers warnings

Fall / injury riskHeart rhythm disorder

risk

This represents the novel, unique personalized approach used by Tabula Rasa


9

Medication Risk Mitigation Matrix intervention results


Medication risks before intervention

Multi–drug risk

Bio-availability

Sedation risk

Renal clearance risk

Fall / injury risk

Drug–gene risk

Medication scheduling risk

Black box warnings

Cognitive risk

Beers warnings

Heart rhythm disorder risk

Medication risks after intervention

Personalized Medication Risk Mitigation Matrix

77 year old male 13 daily medications 11 ‘high risk’ factors

Black box warnings Beers warnings

Sedation risk

• Eliminated three drugs from the patient’s

regimen

• Changed time of day administration schedule

• Changed two drugs to alternatives within the

same class

• Reduced high risk factors from 11 to 2


Analytical Medication Risk Cascade Specific Approach

Individualized Analyses

To evaluate an INDIVIDUAL’S medication-related risk, we analyze, instantaneously:

• Pharmacodynamics (accumulated side effects, per a person’s medication regimen)

– Aggregated Side Effect Risk (FDA , Relative Odds Ratio)

– Acetylcholine Burden Risk

– Sedative Burden Risk

– Long QT Interval Risk

• Pharmacokinetics (unintentional overdosing)

– Pharmacogenomics (Drug/Gene pair, Metabolic Risk)

– Pharmacogenomics ( Competitive Inhibition Risk)

– Renal and Liver function metrics, which affect medication metabolism

– OTC, Recreational, and Herbal medications

• Followed by, Medication Adherence Analysis

– Concordance Index

– Health Literacy Needs

– Adherence Trend (e.g., Morisky Scale)



11

Comprehensive Medication Review (for prescribers & patients)



12

Proprietary cloud-based software solutions

Highly scalable technology platform


• E-Prescribing platform

• Patient risk evaluation

• EHR interoperability

• Secure messaging between

prescriber and pharmacist

• Optional automated

dispensing and delivery

tracking

• Meaningful-use certified

EireneRx: for “closed systems”

• Modular use of EireneRx

components

• Applicable to broad

healthcare audience

• Customization and

integration capabilities

• Sophisticated alert

functionality

• Patient engagement

opportunity


Matrix


MedWise Advisor: for populations

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We help deliver improved clinical and economic outcomes for our clients


Patient outcomes

• Our clients have reported reduced:

• Number of prescription medications

• Number of prescription changes per year

• Hospital admissions

• Emergency room visits

Financial outcomes

• Our clients have reported:

• Reduced unnecessary healthcare

utilization (ER visits, hospitalizations)

• Reduced pharmacy costs

• Proper reimbursement

• Improved ROI


14

0

2

4

6

8

10

12

Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Ho

sp

ita

liza

tio

ns p

er

10

0

me

mb

ers

pe

r m

on

th

Improved clinical and economic outcomes for our clients


1 Although our clients reported that our solutions contributed to positive outcomes, these

changes have not been analyzed statistically. Other factors, including changes in healthcare

regulations or other business practices, or our clients’ implementation of other cost saving

measures, may have contributed to positive outcomes or reduced costs.

Our clients have reported that our solutions have contributed to improved outcomes for their patients 1

Southwest ACO 2

0.30

0.40

0.50

0.60

May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14

ER

vis

its p

er

me

mb

er

pe

r ye

ar

ER visits PMPY

MRM involvement

National Home Health Organization

$500

$600

$700

$800

$900

Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15

Me

dic

ati

on

sp

en

d p

er

me

mb

er

pe

r ye

ar

MRM involvement

Medication spending PMPM

East Coast ACONortheast ACO

Southwest ACO 2

West Coast ACO

Hospitalization by census

0.00

0.20

0.40

0.60

0.80

Q1 2012 Q1 2013 Q1 2014 Q1 2015

Ad

mis

sio

ns p

er

me

mb

er

pe

r ye

ar

MRM involvement

Hospital admissions PMPY

MRM involvement

0%

4%

8%

12%

Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015

% A

dm

itte

d t

o h

osp

ita

l

Hospital admissions (%)

MRM involvement

Hospital readmissions

Falls 20% reduction

31% reduction

Note: These metrics reflect improvements in our covered

population from July 1, 2015 to September 30, 2015

2 Case studies represent the same client


15

Our Markets


16

Expanding client base


2011

8

2012

13

2013

20

2014

51

Q1 ‘16

122Number

of clients

At year-end 2015

66 / 1191

1 119 includes 53 clients gained through Medliance acquisition

http://www.lifeupenn.org/default.asp

http://www.lifeupenn.org/default.asp

17

Expertise in serving at-risk clients amid transition to value-based care

Personalized, precision-based solutions at the forefront of the transition to value-

based care with a focus on high acuity, complex populations


Healthcare organizations increasingly at-risk

• 16.8 million Medicare Advantage

lives in 2015

• 136 million covered lives under

government-sponsored programs

in 2015

• Rapid growth in ACOs in the

United States; from 64 in 2011

to 744 in January 2015

Managed Care

• Shift to bundled payments

throughout post-acute landscape

• Acceleration of capitated

arrangements between

physicians and managed care /

payors

Providers

Shift towards value-based care

Emphasis on quality, value and cost reduction

Need for new and emerging technologies

Focus on complex care populations

Expanding capitated payment models

Clinically and financially responsible organizations

18

First use case – Medicare Advantage PACE market

Program of All-Inclusive Care for the Elderly (PACE)

• CMS-sponsored program in collaboration with

States

• Home-based alternative to institutional care

• Provides fully integrated healthcare delivery for

elderly adults, most of whom are dual-eligible

• Includes all Medicare/Medicaid covered services

including prescription drugs, physician care,

hospital, home care, long-term care, end of life

care, behavioral health, transportation, etc…

• Typical length of stay exceeds four years

• Focus on risk reduction and outcomes

Current penetration

• Market leader

• ~15% penetration of 40,000

current PACE enrollees

• 55 PACE clients

• 900,000 dual-eligible

people in PACE service

areas

PACE is the first fully at-risk plan / provider system and represents our largest market today


19Strictly confidential

Market leader in PACE with expansive geographic footprint

• Currently serving >60 PACE centers across 55 clients in 20 States

• 99% Revenue Retention in 2015

• Total opportunity 900,000 PACE eligible in PACE service areas

PACE clients

States where we are licensed

20

Expanding PACE market with significant penetration opportunity


• For-profit sponsors recently allowed to enter PACE

market (May 2015)

• CMS actively marketing PACE model (Sept 2015)

• Expansion of PACE to other populations (Nov 2015)

PACE Innovation Act 2015

Expansion of the PACE

model to more people

under 55 e.g. patients with

chronic diseases

PACE program growth PACE-eligible population (2015)

900,000 dual eligible patients in current service areas

4% penetrationOperating in 32 states as of April 2016

75

119

2010 Q1 '16

21

New focus area: Enhanced Medication Therapy Management


• Enhanced Medication Therapy Management (EMTM) RFP issued in fall 2015

• An opportunity for stand-alone basic Prescription Drug Plans in five Part D regions to offer

innovative MTM programs, aimed at improving therapeutic outcomes and reducing costs

• Represents significant tailwind for technology-focused and value-based models of care

• CMS implementation will start on January 1, 2017

Background

~40 million Total Medicare

Part D lives

• Provisional approval

obtained in March 2016

• Final CMS approval by late

June / early July 2016

EMTM timing Total opportunityTRHC financial impact

• 240,000 covered Medicare

Part D lives

• Proposed $3 PMPM

• Higher margin expected

given no adherence

packaging element

22

Recent developments and initiatives


MRM in hospitalsMRM in self-funded

employersEducation software

• Focused on the highest risk segment of healthcare population

• Contracted for medication risk stratification, followed by personalized medication risk

mitigationDeveloping

initiatives

under

contract

• 2,600 MRM and risk adjustment members added since Q3 ‘15, representing 10

new PACE clientsBusiness

updates

Recent PACE wins

• Provisional approval for providing enhanced medication therapy management

services to 240,000 Medicare Part D participants

Enhanced MTM

services

23

Competition limited by comprehensive suite of services


Medication

therapy

management

players

Genomic

testing labs

Retail

pharmaciesHealth plans

Pharmacy cost

management

Multi-drug

interaction

analysis

Medication risk

mitigation

Clinical

pharmacist

collaboration

Adherence-

Packaging

Risk adjustment

? ?

?

Healthcare IT

companies

?

?

24

Our total addressable market opportunity

Dual-eligible population

18% of the Medicare

population and 16% of the

Medicaid

Post-acute care

15,400 facilities

Home health agencies

Other at-risk healthcare

organizations

ACOs

Acute care

Other bundled payment

models

Managed care

Medicare: 54M lives

Medicaid: 70M lives

Medicare Part D: 39M lives

Commercial: 207M lives

Behavioral health

$239 billion

expenditure projected

in 2020

PACE

Medication risk

mitigation market

leader

Medicare Advantage

Risk adjustment

Physician provider

groups

Adoption of at-risk

model in response

to MCO incentives

Post-acute care

Pharmacy cost

management

• Demonstrated adoption in growing PACE market

• Significant at-risk market opportunity

• Substantial white space for growth

Established

market position

Additional

expansion opportunity


25

Our Performance


26

How we make money


Sources of Revenue

• Prescription medications sold

directly to healthcare organizations

Prescription

drug revenue

• Fixed fee for each prescription

dispensedDispensing fees

• Fixed monthly administrative fee for

each member for medication risk

management services

Per member

per month fees

• Subscription revenue from clients

and data aggregation rebates from

drug manufacturers

Subscription

revenue and

data fees

Medication risk management (88%) Risk adjustment (5%) 1

Pharmacy cost management (7%)

• Fixed monthly fee for each provider

for risk adjustment services

Per provider or

per member

per month fees

88% of total revenue and 27% gross margin as of Q1 ’16 12% of total revenue and 60% gross margin as of Q1 ’16

1 Includes set-up fees and hourly consulting fees

27

$3.0

$8.6

FY14 FY15

$4.6 $6.2

Q1 '15 Q1 '16

$10.6

$20.9

FY14 FY15

5166

53

119

FY14 FY15

Medliance clients

$2.0

$2.8

Q1 '15 Q1 '16

$15.5 $20.2

Q1 '15 Q1 '16

102

122

Q1 '15 Q1 '16

$48.4

$70.0

FY14 FY15

Strong financial performance and client growth


Adjusted EBITDA ($M)

Revenue ($M)Clients

Gross profit ($M)

Margin 21.9% 29.9% 30.9%29.5% 12.3% 13.9%12.7%6.1%

28

$4.9$5.7

$6.7

$7.9

$10.2

$11.5

$13.0$13.8

$15.5

$16.8

$18.0

$19.8$20.2

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16

Track record of consistent growth


Quarterly revenue ($M)

• 88% revenue contribution from medication

risk management and related value-added

dispensing as of Q1 ’16

• 60% CAGR since Q1 ‘13

• Recurring revenue model provides

significant visibility

• Adjusted EBITDA positive since Q1 ’14

29

Significant revenue visibility from multiple growth drivers

Recurring revenue model

• PMPM

• Subscription-based

• Exclusive, multi-year

contracts

• Predictable prescription

volumes

• Serving high-acuity, long-

term chronic care

populations

96% client retention

99% revenue retention

Existing revenue

Patient growth of

current clients

Existing client

base growth

>2x client growth

in 2015

New client

contracts

Managed care,

post-acute care,

physician provider

groups, behavioral

health

Highly visible

revenue stream

Annual

revenue

Expansion into

new markets


30

Highly scalable platform with significant operating leverage


Operating expense as % of revenue

• Strong top-line growth

• Scalable solutions with low

acquisition costs

• Substantial operating leverage

contributing to increasing

profitability

Cloud-based

platform

Integration of software solutions

and existing client systems

On-demand capacity expansion

Rapid deployment capabilities

Accelerated speed of execution

27%

23%

FY13 Q1'16

31

Investor Presentation – Q&A

May 2016

Documents

M , NJ OULDER, CO CHARLESTON, SC │ SAN FRANCISCO A │ ST ... · Managed Care • Shift to bundled payments throughout post-acute landscape • Acceleration of capitated arrangements