Diplomat.is/more

I’m Jay.

I have chronic lymphocytic leukemia.

I’m a retired submarine commander,

a father, a husband, an avid woodcarver.

I bike 20 miles a day.

I know the Diplomat Difference.

Copyright © 2015 by Diplomat Pharmacy Inc. Diplomat is a registered

trademark of Diplomat Pharmacy Inc. All rights reserved.

Investor Presentation

March 2017

Confidential

1

This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance, and include Diplomat’s expectations regarding revenues, Adjusted EBITDA, cost-saving efforts, and expectations regarding acquisitions. The forward-looking statements contained in this presentation are based on management's good-faith belief and reasonable judgment based on current information, and these statements are qualified by important risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those forecasted or indicated by such forward-lookingstatements. These risks and uncertainties include: our ability to adapt to changes or trends within the specialty pharmacy industry; significant and increasing pricing pressure from third-party payors; our relationships with key pharmaceutical manufacturers; bad publicity about, or market withdrawal of, specialty drugs we dispense; a significant increase in competition from a variety of companies in the health care industry; our ability to expand the number of specialty drugs we dispense and related services; maintaining existing patients; revenue concentration of the top specialty drugs we dispense; our ability to maintain relationships with a specified wholesaler and pharmaceutical manufacturer; increasing consolidation in the healthcare industry; managing our growth effectively; our ability to estimate the impact of DIR fees amid considerable uncertainty due to current regulatory efforts and current and future payor disputes; limited experience with acquisitions and our ability to recognize the expected benefits therefrom on a timely basis or at all; and the additional factors set forth in "Risk Factors" in Diplomat’s Annual Report on Form 10-K for the year ended December 31, 2015 and in subsequent reports filed with or furnished to the Securities and Exchange Commission. Except as may be required by any applicable laws, Diplomat assumes no obligation to publicly update such forward-looking statements, which are made as of the date hereof or the earlier date specified herein, whether as a result of new information, future developments or otherwise.

In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These historical and forward-looking non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP measures is included in the appendix to this presentation.

Diplomat is a registered trademark of Diplomat Pharmacy, Inc. This presentation also contains additional trademarks and service marks of ours and of other companies. We do not intend our use or display of other companies’ trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

Important note

Confidential

Investment Highlights

• Specialty Pharmacy industry is a growth market

• Drug development pipeline remains robust

− Oncology is the largest and fastest growing segment of the Diplomat portfolio

• Limited distribution model growing in importance

• Diplomat is unique within the specialty pharmacy industry

• Taking market share as the largest independent specialty pharmacy

• Access to ~100 limited distribution drugs

• Multiple growth opportunities

• Organic

• Strategic complimentary acquisitions

• Strong financial performance

• Five-year revenue CAGR of 42% & EBITDA CAGR of 48%

• Diversified revenue and profitability streams

• Modest balance sheet leverage – ample dry powder

• Experienced senior management team

• CEO founded Diplomat 40+ years ago

• Leadership team has broad ranging experience across the industry

2

(1) CAGR based on 2011-2016 results

(1)

Confidential

Others 29%

CVS Health /

Omnicare 28%

Express Scripts

19%

Walgreens 10%

OptumRX 7%

4%

Prime

Therapeutics 3%

$58$167

$271$377

$578$772

$1,127

$1,515

$2,215

$3,367

$4,410 $4,500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E

3

Diplomat at a glance

Founded: 1975; Headquarters: Flint, MI

Employees: ~1,800

2017E revenue: ~$4.5 billion

Diversified base of marquee partners

Corporate Overview

2016 Market share ($115 billion total market size) (1)

Exceptional above market revenue growth

Scaled business: National footprint

($ in millions)

Source:(1) 2017 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers(2) Based on mid-point of management’s estimate range for FY 2017

(2)

Pharmacy LocationsArizona

California

Connecticut

Florida

Illinois

Iowa

Kansas

Maryland

Massachusetts

Michigan

Minnesota

Nebraska

New York

North Carolina

Ohio

Pennsylvania

Texas

Wisconsin

(2)

Confidential

4

Diplomat’s revenue and profits come from multiple industry sectorsDIR fees primarily affect core specialty pharmacy sector only

Complementary Opportunities Minimize Payor/PBM Risk, AND Mitigate Risk of Inflation Abatement

Other Services EnvoyHealth

o HUB

o Noncommercial Pharmacy

o Hospital Specialty Network

o 340B Contract Pharmacy

o Formulary and Rebate Management

o Clinical Research

Specialty Infusion Subset of specialty pharmacy

o Many similar characteristics (chronic,

high cost, etc.)

o Few differentiators (nursing

component, more medical billing)

Higher margin business

Unique/separate payor networks

Payor-driven site of care transition

opportunities

Core Specialty Pharmacy(orals and self-injectables)

Oncology dominance

Limited distribution expertise

Outpacing industry revenue growth organicallyo Mix shift driving revenue and profit growth

o Price inflation a very small component of revenue

Serving open, preferred, narrow, and exclusive

payor networks

Increase focus on direct contracts with payors

Pharmaceutical Manufacturer Services Discounts, rebates, services, data fees

High margin

Not dependent on payers or price inflation

Making progress, but significant upside

opportunity remains

Revenue Source:

Payers

Revenue Source:

Pharma & Others

Financial Impact:

Higher Revenue,

Lower Margin

Financial Impact:

Lower Revenue,

Higher Margin

Confidential

Growing list of services across the specialty pharmacy eco-system

5

The continued growth and expansion of small biotech

companies creates a dramatic and growing marketplace

Product Access and Commercialization

Customer Relationship Management

Clinical Care Management

Reimbursement Management

Financial Solutions Pharmacovigilance

Channel Management Noncommercial Pharmacy

Clinical Trials Education Clinical Research Marketing Solutions

Dispensing Support Services

340B Contact Pharmacy

Delegated Prior Authorization

Formulary and Rebate

Management

Medical Management

Call Center Services

PayorsPartnersENVOYHEALTH

SERVICES

Confidential

Diplomat controls the journey of a specialty patient

6

Patient

Physician

Payor

Patient

Patient visits physician

Payor approves script

Diplomat monitors adherence and collects data for manufacturers

Diplomat dispenses drug

Diplomat provides:

Benefit verification

Prior authorization

Clinical intervention

Physician writes script

Patient receives

drugs

Confidential

7

Specialty spend under pharmacy benefit to grow ~5x(1)

Specialty pharmacy industry continues to show exceptional growth

Specialty share of spend growing dramatically(1)

Specialty continues to dominate top 10 drug spend(1)

Source:(1) The 2017 Economic Report on Retail, Mail, and Specialty Pharmacies – February 2017

7 out of top 10 9 out of top 10

2014A 2020E

83%

17%28%

72%

42%58%

Diplomat 2%

$50 billion $240 billion

2011A 2021E

Traditional

2011A 2016A 2021E

Specialty

Confidential

Limited distribution a central and growing theme in specialty

8

Benefits to DiplomatBenefits to biotech / pharma

Completely eliminate or reduce reliance on wholesaler

Real-time clinical data

Commercialization assistance

Improves appropriate utilization

Barrier to entry Deeper, and earlier, partnerships with

pharma / biotech Increased value proposition to payors Market share opportunity

Portfolio of ~100 limited distribution drugs, comprising approximately 45% of revenue in 2015, and well positioned for disproportionate growth from

future drug approvals

Recent unique limited panels…Diplomat exclusive or semi-exclusive

What is limited distribution?

Targeted channel strategy

Provides certain specialty pharmacies with exclusive or preferred dispensing rights to certain drugs

Fast-growing trend

(2013)(2012) (2015)

Traditional:

Limited:

Manufacturer Multiple Wholesalers 65,000 Pharmacies Patient

Manufacturer One/few pharmacies Patient

DPLO EXCLUSIVE DPLO LARGEST OF 4 DPLO 1 of 4

(2016)

DPLO 1 of 4

Confidential

9

Unique competitive position

LARGE PBM / RETAILPHARMACY

SMALLER SPECIALTYPHARMACIES

Diversification distracts from specialty pharmacy

Less flexible / less nimble

Limited scale

Most focused on one or a few disease states

Fragmented market

Consolidation opportunity for Diplomat

Singularly focused on specialty

High-touch model

Flexible and nimble

Entrepreneurial culture

National reach

Scalable infrastructure

Acquired

Feb 2016

Acquired

2013-2017

Acquired

Sept 2016

Confidential

Legal and Regulatory Strategies for combating DIR fees

• Proposed legislation – already in House and Senate to prevent

DIR Fees being implemented in current fashion

• Multiple industry stakeholders reviewing other legislative options

• Direct discussion with CMS to control PBM interpretations of

DIR language

• Legal challenges being reviewed by multiple SP groups and

stakeholders

10

Confidential

Growth Strategy

• Grow our oncology and infusion businesses with increased

access to drugs and broader geographic reach

• Enhance our pharma service offering and HUB services

• Expansion of direct contracts with payors

• Contract with manufacturer partners to insure the highest

service levels for patients, physicians, and health plans

• Continue to selectively pursue strategic M&A opportunities

11

Confidential

12

Future M&A criteria

When considering acquisitions, we look for targets that will potentially benefit Diplomat in one or more of the following ways:

Expand into new therapeutic areas and/or geographic regions

Enhance clinical capabilities to improve competitive advantage

Access to Limited Distribution drugs

Access to new/expanded specialty prescriber base

Accelerate our higher margin business opportunities

Bring new services and technologies under our umbrella

Makes DPLO better, not just bigger

Confidential

13

Financial profile

Confidential

Traditional Drug Specialty Drug A Specialty Drug B Specialty Drug C Specialty Drug B

(10% price incr.)

Revenue $100 $3,700 $10,000 $27,000 $11,000

Gross Profit ($) $10 $185 $400 $810 $440

Gross Margin (%) 10% 5% 4% 3% 4%

14

RevenuePayors

Distributors / pharmaceutical manufacturers

Patient

DiplomatCOGS

Physical drug movement

$ flows

How we make money and grow profitability(Illustrative example)

How we make money

Drug mix and positive pricing trends are tremendous profit tailwinds for Diplomat

Inflation Impact

Diplomat mix shift movement over time

Our core focus

$342

Diplomat’s 4Q’16 Average*

(AWP – Y%)(WAC – X%)

Note AWP = WAC x 1.20

(1)

(1)

Example:

AWP $11,905 - 16% = $10,000 Revenue

WAC $9,921 - 3% = $9,600 COGS

$400 Gross Profit

4% Gross Margin

Confidential

$987

$1,145

4Q15A 4Q16A

15

Normalized Fourth Quarter 2016 Results

(1) Based on dispensed scripts only.(2) Gross profit / net sales (i.e., based on dispensed and serviced scripts).(3) 4Q16 includes a $4.7 million impairment expense to write down related to Physician Resource Management

Revenue

AdjustedEBITDAmargin 2.8%

Adjusted EBITDA

Gross Profit /Script($ in millions)

($ in millions)

2.3%

7.3%7.8%

(1)

Grossmargin

(2)

(3)

$312

$342

4Q15A 4Q16A

$3.6

-$1.1

4Q15A 4Q16A

Net Income (Loss)($ in millions)

$28.1$26.1

4Q15A 4Q16A

Confidential

$8$15 $11

$19

$35

$95$107

2010A 2011A 2012A 2013A 2014A 2015A 2016A

Strong long-term financial performance…

Adjusted EBITDA2010 – 2016

Total Revenue2010 – 2016

% margin

% growth

($ in millions)

% growth

($ in millions)

Pre-IPO infrastructure investments

Volume, price and mix all driving superior revenue growth

Natural operating leverage and acquisitions driving EBITDA growth

53%

27%

Note: Historical financials are not pro forma for any acquisitions.

$578 $772$1,127

$1,515

$2,215

$3,367

$4,410

2010A 2011A 2012A 2013A 2014A 2015A 2016A

34% 46% 34% 46% 52% 31%

96% (28%) 75% 85% 170% 13%

1.3% 2.0% 1.0% 1.3% 1.6% 2.8% 2.4%

16

Confidential

17

… with continued growth in profitability

Gross Profit / Script (1)

2010 – 2016

Note: Financials are not pro forma for acquisitions.(1) Based on dispensed scripts only.(2) Gross profit / net sales (i.e., based on dispensed and serviced scripts).

% growth 12% 20%31% 4%

% margin 7.1% 5.9%7.3% 6.2%

Several factors drive growth in our Gross Profit / Script(1):

Continued mix shift towards higher price, higher profit drugs (including acquisitions)

Favorable pricing trends

(2)

Gross margin expansion opportunities:

Recent acquisitions with higher gross margins (%)

Pharma services opportunities

Specialty generics and biosimilars (longer term)

44%

6.3%

68%

7.8%

16%

7.4%

$71$93 $97

$116

$167

$280

$325

2010A 2011A 2012A 2013A 2014A 2015A 2016A

Confidential

18

Components of Quarterly Revenue Growth($ in millions)

Quart

erly

Reve

nue

• Price inflation comprised

4% of revenue in 4Q16

after four straight quarters

of contributing 6%

Diplomat’s 2017 outlook

assumes inflation will

moderate in 2017

• Chronic disease expertise

provides an annuity-like

revenue base

Limited distribution

leadership and rich drug

pipeline driving revenue

growth from new drugs

Confidential

19

Annual Revenue by Drug Year Launch

$1.5B

$2.2B

$3.3B

5%

18%

3%

16%

95%$1.4B

77%$1.7B

63%$2.1B

21%

2%

$4.4B

19%

13%

8%

4%

61%$2.7B

• Drugs across all launch years

continue to grow over time

• 2012 and prior drugs have

grown 93% from 2013 to 2016

• Pipeline remains an important

element of near-term and long-

term growth; existing drugs will

also contribute meaningfully

Confidential

20

Balance Sheet / Cash Flow snapshot

($ in millions)

(1) Includes $6mm in cash-based contingent consideration

(2) ProForma to include 12 months of TNH

2016 2015

Cash $8 $28

Total Debt $150 $119 (1)

Shareholders’ equity $614 $516

Net Debt/ProForma TTM EBITDA(2) ~1.0x ~.8x

Cash Flow From Operations (period ended) $31 $29

December 31,December 31,

Confidential

21

Appendix

Confidential

22

Revenue by Therapeutic Class

($ in millions)

2015

% of

Total 2014 2013

Oncology 1,432,091$ 43% 1,068,751$ 736,987$

Hepatitis 520,771 15% <10% <10%

Immunology 510,708 15% 438,145 378,685

Infusion 374,884 11% <10% <10%

Multiple Sclerosis <10% N/A 226,805 169,470

Other (none greater than 10% in the period) 528,177 16% 481,255 229,997

3,366,631$ 2,214,956$ 1,515,139$

Limited distribution drug % of total 45% 44% 40%

Confidential

Acquired Company Consideration Rationale

February 1, 2017

• $20M gross purchase price

• $16M cash, $4M earn-out

• ~6.7x CY 2016 EBITDA

• Hemophilia focused specialty pharmacy and infusion services company

• Strengthens Diplomat’s footprint in key geographic markets (New York and Houston)

• Revenue synergy opportunities

June 1, 2016

• $75M gross purchase price

• $65M cash, $10M stock

• ~8.0x CY 2015 EBITDA

• Oncology focused specialty pharmacy; 22 LDs

• Strengthens Diplomat’s footprint in key geographic markets (California and Texas)

• Revenue synergy opportunities

• Promising proprietary technology; some components of TNH’s portal can be

leveraged across Diplomat’s platform

June 19, 2015

• $87M gross purchase price*

• $77M cash*, $10M stock

• ~4.2x CY 2014 EBITDA

• Hep C dominance in Mid Atlantic

• Proprietary technology (HealthTrac) with applicability across Diplomat’s Hep C

platform

• Proven management team

• 50 year old company, run by 2nd generation pharmacist

• No marketed sales process

April 1, 2015

• $272M adjusted purchase price* (~$50M

tax benefit)

• $217M cash*, $105M stock

• ~11.8x CY 2014 EBITDA

• One year earnout of 1.35M shares (all

stock)

• Adds significant scale to specialty infusion business

• Provides ability to compete for national contracts

• Increases exposure to higher margin businesses

• Addition of new disease states, therapeutic categories & 5 new LD’s

Recent Acquisitions

23

* Value includes closing working capital adjustments

Confidential

Calendar year ending December 31,

($ in millions) 4Q'16A 4Q'15A 2016A 2015A 2014A 2013A 2012A 2011A 2010A

Net income (loss) attributable to Diplomat ($1.1) $3.6 $28.3 $25.8 $4.8 ($26.1) ($2.6) $9.2 ($7.8)

Depreciation & Amortization $14.0 $10.0 $50.0 $30.8 $8.1 $3.9 $3.8 $3.1 $2.2

Interest Expense $1.8 $1.5 $6.6 $5.2 $2.5 $2.0 $1.1 $0.6 $0.5

Income tax expense $1.8 $2.3 $11.2 $16.2 $4.7 - - - -

EBITDA $16.4 $17.3 $96.1 $78.1 $20.1 ($20.2) $2.3 $12.8 ($5.2)

Share-based compensations expense $0.9 $1.4 $5.4 $4.0 $2.9 $0.9 $0.9 $1.4 $0.8

Change in fair value of redeemable common shares - - - - ($9.1) $34.3 $6.6 - $10.7

Termination of existing stock redemption agreement - - $0.2 - $4.8 - - - -

Employer payroll taxes - option repurchases $0.0 $0.1 - $1.6 - - - - -

Restructuring and impairment charges $4.7 - $7.1 $0.2 - $1.0 $0.4 $0.4 $1.5

Equity loss of non-consolidated entity - - - - $6.2 $1.1 $0.3 $0.1 -

Severance and related fees $1.0 $0.1 $1.1 $0.5 $0.4 $0.2 $0.4 $0.7 -

Merger and acquisition related expenses $0.3 $8.8 ($6.6) $9.2 $7.2 $0.7 - - -

Private company expenses - - - - $0.2 $0.2 - - -

Tax credits and other - - - - $1.0 - ($0.1) ($0.6) -

Other items $2.8 $0.4 $4.0 $1.5 $1.4 $0.7 $0.1 $0.2 ($0.0)

Adjusted EBITDA $26.1 $28.1 $107.4 $95.0 $35.2 $19.0 $10.9 $15.1 $7.7

Reconciliation of Net income (loss) and Adjusted EBITDA

24

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Note: Financials are not pro forma for acquisitions.Detailed footnotes on the following page.

Confidential

Reconciliation of Net income (loss) and Adjusted EBITDA

25

1) Share-based compensation expense relates to director and employee share-based awards.

(2) Restructuring and impairment charges reflect decreases in the fair market value of non-core property and assets, or actual losses on disposal of such assets. Q4 2016 charge primarily related to an impairment to write down our cost method investment in Physician Resource Management, LLC(“PRM”). The full year 2016 includes both the impairment of PRM and the Q3 2016 full impairment of the definite-lived intangible assets associated with Primrose Healthcare LLC. 2013 charges primarily relate to the $932 write-down of our former Swartz Creek, Michigan headquarters facility to its fair value, after we vacated it in favor of our present Flint, Michigan facility. 2012 charges primarily relate to our write-down of an externally purchased software package we no longer utilize, as well as sales of Company-owned vehicles. 2011 charges include expense associated with the closure of our former Cleveland, Ohio facility, the move of our Chicago, Illinois area facility, and sales of Company-owned vehicles.

(3) During the fourth quarter of 2014, we reassessed the recoverability of our investment in our non-consolidated entity, Ageology. Based upon this assessment, we determined that a full impairment of $4,869 was warranted, primarily due to updated projections of continuing losses into the foreseeable future. The remaining amounts in 2014, 2013 and 2012 represents our share of losses recognized by Ageology, using the equity method of accounting. We first invested in Ageology, an anti-aging physician network dedicated to nutrition, fitness and hormones, in October 2011, in connection with its formation.

(4) Employee severance and related fees primarily relates to severance for former management.

(5) Fees and expenses directly related to merger and acquisition activities, and the impact of changes in the fair value of related contingent consideration liabilities.

(6) Primarily includes philanthropic activities performed at the direction of our majority shareholder.

(7) Represents (a) various tax credits received from the state of Michigan for facility improvement and employee hiring initiatives, (b) the one-time costs associated with converting from an S-Corporation to a C-Corporation, and (c) a 2014 charge of $1,825 related to non-income tax obligations.

(8) Includes other expenses, predominantly option redemption payroll taxes and IT operating leases. Operating leases were initiated, in lieu of purchases or capital leases for a subset of our IT spend, for a short period of time in 2013 and 2014 for liquidity purposes. We have since discontinued the practice of leasing IT equipment. The cost of purchased IT equipment is reflected in depreciation and amortization. Q4 2016 includes $2.4 million of inventory loss due to a cooler failure.