Diplomat ir deck jpm 1.7.17

1Copyright © 2018 by Diplomat Pharmacy Inc. Diplomat is a registered trademark of Diplomat Pharmacy Inc. All rights reserved.

Capturing the Opportunity

JANUARY 2018 BETHANYDIPLOMAT PATIENT

2

SPECIALTY DRUGS DRIVE PHARMACYINDUSTRY GROWTH

1. “Medicines Use and Spending In The U.S.: A Review of 2016 and Outlook to 2021.” IQVIA Institute. May 2017.2. 2021 specialty drug market share estimate based on “Global Medicines Use in 2020.” IMS Institute. November 2015. 3. “The Use of Medicines in the United States: Review of 2011.” IMS Institute. April 2012.

Historical and Projected Growth, 2011–20211,2,3

Specialty drugs as % of pharmacy industry revenues 25% 40% ~50%

2011 2016 2021

SPECIALTY DRUGS

TRADITIONAL DRUGS

$320

$450

$600

$244$270 $300

$300

$180

$85

(BILLIONS)

Proprietary of Diplomat Pharmacy Inc.

3

POSITIONED TO CAPITALIZE ON MARKET TRENDS

Market Trend Diplomat Position

Growth of specialty pharmacy Decades of experience drive increasing market share in the highest-growth categories

Limited-distribution drugs driving market growth Growing portfolio of more than 100 limited-distribution drugs, including more than 60 orphan drugs

Increasing national healthcare costs Creating efficiencies through technology solutions,home infusion services, and site-of-care management

Rapid expansion of biopharma and increasing demand for hub services

EnvoyHealth provides mission-critical hub solutions while deepening relationships with pharma

Unmet payer drug-management needs Acquisitions and experience allow us to delivercustomized solutions


4Proprietary and Confidential of Diplomat Pharmacy Inc.

Payer ServicesPharmacy Services

▪ Customized industry solutions▪ Fee-for-service▪ Technology

▪ Specialty▪ Infusion▪ Home delivery

▪ Pharmacy benefit management▪ Site-of-care transition▪ Medical benefit management

DIPLOMAT’S CONTINUED EVOLUTIONThree Complementary Focus Areas Providing a Broader Spectrum of Care

Industry Services

5

STRONG RATIONALE FOR DIPLOMAT TO EXPAND IN THE PBM SECTOR

Allows Diplomat to expand its specialty product offering using PBM levers

Well-positioned with multiple service lines for evolving market needs in the middle-market space

Strengthens Diplomat’s financial profile and substantially diversifies Diplomat’s EBITDA

LDI and NPS combine to create a robust full-service middle-market PBM offering

Complementary products, services, and solutions offer full platform for future scale and growth

Well-defined integration strategy with early synergies

Proprietary and Confidential of Diplomat Pharmacy Inc.

Expanded capabilities accelerate growth and drive shareholder value.

6

INVESTMENT HIGHLIGHTS

Diplomat has evolved to address existing and emerging unmet market needs.

● Diversified services under three pillars to address the broader spectrum of care.

● Exceptional patient care through our unique industry position and innovative service model.

● Innovative care supported by investments in next-generation technology.

Diplomat offers three unique, complementary pillars.Helping partners across the continuum ofcare with clinical, industry, andtechnology expertise.

M&A synergies positionus for growth. Successful integration and strategic execution expand capabilities and access efficiently.

Diplomat has an enhanced leadership team with deepindustry expertise.

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Financial ProfileAtul Kavthekar, CFO

8

2017 PRELIMINARY GUIDANCE

Diplomat preliminarily expects 2017 revenue will be near the middle of the previously provided range and Adjusted EBITDA will be at the upper end of previously announced range.

This excludes any incremental contribution of LDI (as defined below) for the post-close period in 2017, which was not included in our previous guidance, provided January 5, 2018. Please see forward-looking statements and disclosures.

REVENUE WILL BE AT A MIDPOINT OF

$4.4B–$4.6BADJUSTED EBITDA WILL BE AT THE

UPPER END OF $99M–$102M


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2018 PRELIMINARY OUTLOOKIn 2018, Diplomat expects:

REVENUE IN THE RANGE OF

$5.3B–$5.6BADJUSTED EBITDA IN THE RANGE OF

$164M–$170M~20% INCREASE BASED ON THE

MIDPOINT OF THE 2017 RANGE ~66% INCREASE BASED ON THE MIDPOINT OF THE 2017 RANGE


Full guidance will be provided with final year end results

10

FINANCIAL POLICY


LEVERAGE

LIQUIDITY

M&A

STAKEHOLDER RETURNS

● Target deleveraging to 2.0x – 3.0x● Will use free cash flow to reduce debt

● Significant liquidity maintained through $250 million revolver● Stable cash flow generation

● Disciplined M&A framework continues● Focus on LDI integration over next ~6-12 months● Will evaluate strategic bolt-on opportunities

● No plans to initiate an ongoing dividend● No share buybacks anticipated during de-leveraging phase

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MOVING FORWARD,STRONG PATHS FOR GROWTH

Opportunity/Revenue/Value

Time

Scalability through efficiencies—more new benefits than added costs

High-margin fee-for-service opportunities for pharma/payers

High-growth market with unmet drug-management needs

Strategic national coverage and site-of-care cost reduction

Continued high revenue with growing LDD opportunities


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NON-GAAP INFORMATIONWe define adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, share-based compensation, change in fair value of contingent consideration and other merger and acquisition-related expenses, restructuring and impairment charges, and certain other items that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA is not in accordance with, or an alternative to, accounting principles generally accepted in the United States (“GAAP”). In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. You should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in the press release, and we do not infer that our future results will be unaffected by unusual or non-recurring items.

We consider adjusted EBITDA to be a supplemental measure of our operating performance. We present adjusted EBITDA because it is used by our Board of Directors and management to evaluate our operating performance. Adjusted EBITDA is also used as a factor in determining incentive compensation, for budgetary planning and forecasting overall financial and operational expectations, for identifying underlying trends and for evaluating the effectiveness of our business strategies. Further, we believe they assist us, as well as investors, in comparing performance from period-to-period on a consistent basis. Other companies in our industry may calculate adjusted EBITDA differently than we do and these calculations may not be comparable to our adjusted EBITDA metrics.

Due to the inherent difficulty of forecasting the timing and amount of certain items that would impact net income, we are unable to reasonably estimate the related impact of such items to net income, the GAAP financial measure most directly comparable to adjusted EBITDA. Accordingly, we are unable to provide a reconciliation of adjusted EBITDA to net income with respect to the updated and forward-looking guidance provided herein. For the same reasons, we are unable to address the probable significance of the unavailable information, which could have a significant impact on our full-year GAAP financial results.

FORWARD-LOOKING STATEMENTSThis press release 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 may include Diplomat’s expectations regarding revenues, Adjusted EBITDA, the expected benefits of acquisitions, business and growth strategies, and the CEO search process. The forward-looking statements contained in this press release are based on management’s good-faith belief and reasonable judgment based on current information. These statements are qualified by important risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those forecasted or indicated by such forward-looking statements. 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; the amount of direct and indirect remuneration fees, as well as the timing of assessing such fees and the methodology used to calculate such fees; the outcome of material legal proceedings; 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 two pharmaceutical manufacturers or other pharmaceutical manufacturers that become material to our business over time; increasing consolidation in the healthcare industry; managing our growth effectively; our ability to drive volume through a refreshed marketing strategy in traditional specialty pharmacy; our capability to penetrate the fragmented infusion market; the success of our strategy in the pharmacy benefit manager space; the ability to advance our specialty footprint by deepening our relationships with manufacturers through critical service solutions; our ability to effectively execute our acquisition strategy or successfully integrate acquired businesses, including any delays or difficulties in integrating the combined businesses, and the ability to achieve cost savings and operating synergies and the timing thereof; CEO succession planning and the dependence on our senior management and key employees and managing recent turnover among key employees; potential disruption to our workforce and operations due to recent cost savings and restructuring initiatives; and the additional factors set forth in “Risk Factors” in Diplomat’s Annual Report on Form 10-K for the year ended December 31, 2016 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.

INDUSTRY AND MARKET DATACertain information in this presentation concerning our industry and the markets in which we operate is derived from publicly available information released by third-party sources, including independent industry and research organizations, and management estimates. Management estimates are derived from publicly available information released by independent industry and research analysts and other third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets, which we believe to be reasonable. We believe the data from these third-party sources is reliable. In addition, projections, assumptions, and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, as discussed in Diplomat’s reports filed with the Securities and Exchange Commission. These and other factors could cause results to differ materially from those expressed in the estimates made by these third-party sources.

MEDICAL ADVICEThe information herein is for educational purposes only and may not be construed as medical advice. Diplomat Pharmacy Inc. takes no responsibility for the accuracy or validity of the information herein, nor the claims or statements of any manufacturer.


DISCLAIMERS

13

Appendix

14

LONG-TERM FINANCIAL PERFORMANCE

Total Revenue

$578

(MILLIONS)

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

% Growth 53% 34% 46% 34% 46% 52% 31%

$772

$1,127$1,515

$2,215

$3,367

$4,410

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


3Q16A 3Q17A

$1,181$1,125

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LONG-TERM FINANCIAL PERFORMANCE

Adjusted EBITDA

$8

(MILLIONS)

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

% Growth 27% 88% (28%) 75% 85% 170% 13%

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

$15$11

$19

$35

$95$107

3Q16A 3Q17A

1.9% 2.1%

$22.6

$23.2

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

Pre-IPO infrastructure investments


16

GROWTH IN PROFITABILITY

Gross Profit/Script

$71

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

% Growth 12% 31% 4% 20% 44% 68% 16%

% Margin 7.1% 7.3% 6.2% 5.9% 6.3% 7.8% 7.4%

$93$97

$116

$167

$280

$325

3Q16A 3Q17A

6.6% 7.6%

$289

$360

Financials are not pro forma for acquisitions.Gross profit per script is based on dispensed scripts only.Percent margin equals gross profit / net sales (i.e., based on dispensed and serviced scripts).


17

BALANCE SHEET/CASH FLOW SNAPSHOT

Sept. 2017 Dec. 2016

Cash $27 $8

Total Debt $1601 $150

Shareholders’ Equity $647 $614

Net Debt/ProForma TTM EBITDA ~1.3x2 ~1.0x3

Cash Flow From Operations (Period Ended) $94 $31

1. Includes $11mm in cash-based contingent consideration2. ProForma includes 12 months of Accurate, Affinity, Comfort Infusion, FocusRx, and WRB Communications 3. ProForma includes 12 months of Affinity, Comfort Infusion, and TNH


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Therapeutic Class 2016 % of Total 2015 2014 2013

Oncology $2,102,130 48% $1,432,091 $1,068,751 $736,987

Immunology $644,173 15% $510,708 $438,145 $378,685

Hepatitis $583,751 13% $520,771 <10% <10%

Specialty Infusion $505,240 11% $374,884 <10% <10%

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

Other (none greater than 10% in period) $575,094 13% $528,177 $481,255 $229,997

$4,410,388 $3,366,631 $2,214,956 $1,515,139

Limited-distribution drug % of total 53% 45% 44% 40%

REVENUE BY THERAPEUTIC CLASS ($ IN THOUSANDS)


19

RECONCILIATION OF NET INCOME (LOSS) & ADJUSTED EBITDA

For the three months ended September 30, Calendar year ending December 31,($ in millions) 2017 2016 2016A 2015A 2014A 2013A 2012A 2011A 2010ANet income (loss) attributable to Diplomat $1.0 $5.4 $28.3 $25.8 $4.8 ($26.1) ($2.6) $9.2 ($7.8)

Depreciation & Amortization $16.9 $13.7 $50.0 $30.8 $8.1 $3.9 $3.8 $3.1 $2.2 Interest Expense $2.1 $1.8 $6.6 $5.2 $2.5 $2.0 $1.1 $0.6 $0.5 Income tax expense ($0.7) ($3.2) $11.2 $16.2 $4.7 - - - -EBITDA $19.3 $17.7 $96.1 $78.1 $20.1 ($20.2) $2.3 $12.8 ($5.2)Contingent consideration and other M&A expense $3.0 $0.4 - - - - - - -Share-based compensations expense $1.7 $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 - $2.5 $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 $0.1 $0.1 $1.1 $0.5 $0.4 $0.2 $0.4 $0.7 -Merger and acquisition related expenses - - ($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 ($0.9) $0.4 $4.0 $1.5 $1.4 $0.7 $0.1 $0.2 ($0.0)Adjusted EBITDA $23.2 $22.6 $107.4 $95.0 $35.2 $19.0 $10.9 $15.1 $7.7


20

RECONCILIATION OF NET INCOME (LOSS) & ADJUSTED EBITDA(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. The full year 2016 includes both the Q4 2016 impairment to write down our cost method investment in Physician Resource Management, LLC (“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) Q3 2017 excludes $1.0 million of insurance proceeds associated with the 2016 inventory loss due to a cooler failure. 2016 includes a $2.4 million inventory loss due to a cooler failure. Other expense is predominantly 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.


21

Scaled asset in middle market● Serving all key customer types● +855k lives● 700+ customers

Bringing best-in-class specialty pharmacy capabilities to underserved market

Attractive partnership approach to manage formulary and drug costs

High-touch/high-service DNA consistent with Diplomat

Differentiated clinically, leveraging proprietary technology platform

PBM PLATFORM WITH FULL SUITE OF CAPABILITIES

Self-Funded Employers / Unions

Medicare Part D / Managed Medicaid

Workers’ Comp

Transparent Pricing

Traditional Pricing

Owned Adjudication Platform

Comprehensive/Competitive Network

Direct Manufacturer Rebates

High-Touch Services

CUST

OM

ER E

XPER

IENC

EKE

Y CA

PABI

LITI

ES/

BUSI

NESS

MO

DEL

EXPE

RTIS

E

LDI NPS DPLO’s PBM Capabilities


22

Target

Purchase Price

Consideration

Business Overview

Closing

NPS TRANSACTION SUMMARY● Pharmaceutical Technologies, Inc., dba National Pharmaceutical Services (NPS)● Full-service pharmacy benefit manager (PBM) with access to 475,000 member lives● Based in Omaha, Nebraska● Revenue: $32 million (2017E) and Adjusted EBITDA: $5.4 million (2017E)

● $47 million purchase price● Transaction includes real estate valued at ~$10 million

● $31 million in cash using cash on hand and existing credit facility● $16 million in common stock● No contingent earn-out consideration● Expected to be accretive to adjusted EPS in 2018

● Diversified mix of PBM lives● Robust technology platform: In-house proprietary claims-processing system● Captive mail-order pharmacy (Integrated HMO Pharmacy)● Near-term synergy opportunities for specialty Rx volume● Senior management team will remain in place

● Diplomat announced closing of the acquisition of NPS Nov. 29, 2017.


23Proprietary and Confidential of Diplomat Pharmacy Inc.

Target

Purchase Price

Consideration

Closing

LDI TRANSACTION SUMMARY● LDI Integrated Pharmacy Services (“LDI”)● Full-service PBM with 2017E revenue of $388 million and 2017E adjusted EBITDA of $41 million

● $595 million gross purchase price- Represents ~14.5x on gross purchase price

● $540 million adjusted purchase price- ~$94 million tax shield (NPV ~$55 million)- Represents ~13.2x post tax shield benefit

● $4-6 million of synergies in Year 1- Represents ~11.7x post synergies and post tax shield

● $515 million in cash - Committed cash financing from a new $795 million credit facility provided by JPMorgan and Capital One

● ~$80 million in common stock, representing ~4.15 million shares● Pro forma total leverage of ~4.6x LTM adjusted 2017 EBITDA; Expected to be between 2.0x-3.0x by mid 2019 ● Expected to be accretive to adjusted EPS in 2018

● Diplomat announced closing of the acquisition of LDI Dec. 20, 2017.

24Copyright © 2018 by Diplomat Pharmacy Inc. Diplomat is a registered trademark of Diplomat Pharmacy Inc. All rights reserved.

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Diplomat ir deck jpm 1.7.17

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