DSI Open Enrollment Bro

Daiichi Sankyo 2011 Open Enrollment Brochure Enthusiastic Thoughtful Creative

November 2010Dear Daiichi Sankyo employees:Daiichi Sankyo, Inc. (DSI) is committed to offering you a competitive and comprehensive healthand welfare benefits package. We pride ourselves on consistently being “above market” foremployee benefits compared to general industry and our pharmaceutical competitors. Each year: • We evaluate our plan designs, • Compare ourselves to our competitors and the general pharmaceutical industry, and • Negotiate with our providers to make sure we can continue to meet our commitment to you, even as health care costs have increased over the past several years.The challenge of rising health care costs is not unique to DSI — all employers are feeling thepinch. In 2010, our benefits costs increased significantly because of medical plan inflation.Additionally, although passage of health care reform enhances your health care benefits, itadds cost to the plan in order to comply with some of the bill’s provisions.Since the Company’s start in 1997, DSI has kept to a minimum benefit reductions and costincreases for our employees, especially compared to industry standards and health care inflation.Over the years, we have made only minor changes to the medical and dental plans. In fact, inmost years we actually made plan enhancements, and only slightly increased contributions tokeep pace with health care inflation, or less, or some years not at all. However, we can no longercontinue to absorb these significant cost increases without making changes.For 2011 we will be asking you to share a greater portion of the costs. We are doing this by: • Making changes to some of the medical plan employee cost-sharing features, and • Increasing your medical and dental plan contributions.Despite these changes, our plans are more generous and your contribution dollars continue tobe equal to or less than our pharmaceutical industry benchmarks.This brochure has more detail about the changes. We want to provide you with all of theinformation you need to make informed benefit decisions as they are an important part of yourtotal compensation. We will continue to provide additional information to you throughout ourOpen Enrollment period.Your once-a-year opportunity to make changes to your benefits is coming soon. Open Enrollmentruns from Monday, November 8 through Friday, November 19, 2010.At Daiichi Sankyo, we are committed to you and we thank you for your contribution toour success.Sincerely,Joe Pieroni President and Chief Science OfficerPresident and CEO Daiichi Sankyo Pharma DevelopmentDaiichi Sankyo, Inc.Glenn Gormley 1

Health Care Reform ChangesOn March 23, 2010, President Obama signed into law thePatient Protection and Affordable Care Act (also known as“health care reform” or PPACA), enacting health care reformand expanding coverage to all Americans. As a result, this yearand over the next several years, we will be making changesto our health care benefits to comply with this legislation.The following changes will apply to both the Premier Plan andBasic Plan effective January 1, 2011, except where noted:Special Enrollment for Adult Children: Children will be eligiblefor coverage under one of the Daiichi Sankyo medical and dentalplans up to the end of the month in which they reach age 26.Your child is eligible even if he or she: • Is married, • Does not live with you, • Is not a full-time student, • Is not your tax dependent, and/or • Has other coverage available elsewhere.You may enroll any child who is under age 26 as of January 1, 2011, even if he or she lost eligibility beforeJanuary 1, 2011. In addition, if your child is handicapped as defined under our plan (see our Summary PlanDescription on the DSI intranet), no age limit applies.Elimination of Lifetime Maximum: The maximum lifetime limit under the Basic Plan will be eliminatedstarting January 1, 2011. If you or a dependent were previously denied medical coverage because youreached the plan’s lifetime maximum, you’re eligible to re-enroll in the plan. The Premier Plan does not havea lifetime maximum.In-network preventive services will be 100% covered: CIGNA’s Outpatient Mentalin-network preventive care will be covered at 100% with no copay. Health/SubstanceThis benefit is available under both medical plans. Please note that for Abuse Office Visitspreventive care services to be covered at 100%, your doctor mustcode these services as preventive, rather than diagnostic. Coverage The Mental Health Paritylevels for out-of-network preventive care have not changed. and Addiction Equity Act requires that mental healthHealth Care Flexible Spending Account and Over-the-Counter and substance abuse benefitsDrugs: Beginning January 1, 2011, over-the-counter (OTC) medica- be the same as medicaltions are no longer an eligible expense for reimbursement from your benefits; therefore, officeHealth Care Flexible Spending Account, unless you have a doctor’s visits for these services willprescription or note indicating the drug is medically necessary. You be covered at the PCP copaywill not be able to use your Benny Card for OTC medications even if level of both plans.you have a prescription. You must submit claims directly to BenefitConcepts with a copy of your prescription.2

What’s New for 2011Medical Plan ChangesSome of our medical plan changes for 2011 affect what you pay for plan services, including an increase in theannual deductibles, out-of pocket maximums and some copays (a copay is the up front payment you make forservices before plan benefits are payable). However, the plans still cover a very high percentage of the costsfor services. Additionally, as a result of health care reform legislation, in-network preventive care will be covered100% and, in the Basic Plan, there will no longer be a lifetime maximum amount for your medical coverage.The plans continue to have low out-of-pocket calendar year maximums that protect you from paying significantexpenses in the event of a major illness or if you have a hospital stay. An out-of-pocket maximum is the mostyou will spend out-of-pocket for eligible covered expenses in a calendar year. The individual annual out-of-pocket maximum for services will be $1,000 in the Premier Plan if you use in-network services and $2,000 onan out-of-network basis; in-network and out-of-network out-of-pocket expenses work together. Once youreach the maximum, you are covered at 100% for the remainder of the calendar year. Furthermore, yourout-of-network costs count toward your in-network deductible and maximum and vice versa and include yourdeductibles and coinsurance percentage. The Premier Plan also counts copays towards the out-of-pocketmaximum. We’ll provide examples for you during Open Enrollment.Here is an overview of the Premier and Basic medical plans. The costs to you that have increased are in bold. 2011 Medical Plan Changes Comparison Chart Premier Plan Basic PlanBenefit In-Network Out-of-Network In-Network Out-of-NetworkAnnual Deductible $250* $750** $750** $1,000 Individual Family $500* $1,500** $1,500** $2,000Annual $1,000** $2,000** $2,000** $4,000**Out-of-pocket Individual Individual Individual IndividualMaximum $2,000** $4,000** $4,000** $8,000** Family Family Family FamilyLifetime Benefit Unlimited Unlimited Unlimited UnlimitedMaximumPreventive Care 100% covered 20% after deductible 100% covered 40% after deductiblePCP Office Visit $15 copay** 20% after deductible $40 copay** 40% after deductibleSpecialist Visit $30 copay** 20% after deductible $60 copay** 40% after deductibleInpatient HospitalEmergency Room 10% after deductible 20% after deductible $250 copay then 40% after deductible(copay waived 20%, after deductibleif admitted) $200 copay* then $200 copay* then $250 copay** then $250 copay** then 10%, no deductible 10%, no deductible 20%, no deductible 20%, no deductibleCoinsurance for 10% 20% 20% 40%Most Other Services*** NInecwrease 3

Prescription Drug Benefit ChangesWe are increasing the amount you pay for prescription drugs. However, we are not introducing a formulary orrequiring mandatory use of generic drugs, and DSI brand drugs are still covered at 100%. The maximum youwill spend out-of-pocket for prescription drugs in a calendar year per person will be $750 in the Premier Planand $1,000 in the Basic Plan. As you can see in the chart, there are greater savings if you use generic drugsand refill your prescriptions using the mail order service. 2011 Prescription Drug Copays Premier Plan Basic Plan In-Network Retail Prescription Drugs (30-day supply)Generic 20% of cost (minimum $10 or, 30% of cost (minimum $10** or,Brand if less, the actual cost of the drug) if less, the actual cost of the drug)Generic 20% of cost (minimum $20* or, 30% of cost (minimum $20 or,Brand if less, the actual cost of the drug) if less, the actual cost of the drug) CIGNA Mail Order Prescription Drugs (90-day supply) $20* $30 $40* $60Annual Out-of-Pocket $750* $1,000Maximum* Increase** This is a decrease and provides greater savings if you use generic prescriptions.Dental and Vision BenefitsThere are no plan design changes to your dental andvision benefits for 2011. Remember, vision benefits areautomatically included with your medical plan enrollment.Dental plan contributions will increase for 2011. 4

Medical and Dental Plan PremiumsPlan premiums will increase to reflect medical inflation. Despite this, the percentage of the total premium thatyou pay for your medical and dental plan is still less than what employees at most of our competitors arerequired to pay. The chart shows the new premiums effective January 1, 2011. Note that your medical plancosts include prescription drug and vision. Bi-weekly Payroll ContributionsEmployee Only Premier Basic DentalEmployee +1 Plan Plan PlanFamily $0.00 $4.75 $34.00 $28.20 $10.35 $75.70 $40.80 $15.00 $109.50If you are a part-time employee, your contributions can be found in our Benefits E-Book at www.dsibenefits.com.New Life and AD&D Insurance ProviderDSI provides all employees with Basic Life and Accidental Death andDismemberment (AD&D) Insurance, as well as Supplemental Life and AD&DInsurance for you, your spouse and your children. DSI pays 100% of the costof your Basic Life and AD&D coverage, and you are automatically enrolled.You pay the full cost of the Supplemental coverages you elect. For 2011, we’rechanging our Life and AD&D insurance carrier from CIGNA to Reliance Standard.As a result, the rates for Supplemental Life have decreased and will remain ineffect for the next four years. Rates for AD&D will remain at current levels.Please note that as a result of the change to Reliance, CIGNA is no longeroffering our employees their Secure Travel or Identity Theft programs.Reliance includes its Travel Secure program which is similar to CIGNA'sprogram (a flyer is enclosed). We continue to offer Identity Theft benefitsthrough Pre-Paid Legal in which you can enroll at any time.As a result of the change to Reliance, we have a special “Open” Enrollmentoption for Supplemental Employee Life Insurance. All employees may enroll forup to $250,000 in Supplemental Life Insurance with no evidence of insurabilityduring this Open Enrollment period. This is a one-time chance to increase yourcoverage without paperwork or medical documentation at our new, lower rates.New Long-Term Disability (LTD) Insurance CarrierDaiichi Sankyo also pays for the full cost of your Long-Term Disability coverage.For 2011, we’re changing our insurance carrier from Life Insurance Companyof North America (a subsidiary of CIGNA) to Sun Life. We are keeping thebenefit design at the same generous level of 60% of your eligible pay, whichincludes your current annual salary plus the prior calendar year’s AnnualIncentive Payment and/or quarterly Sales Incentive payments. LTD benefitsbegin once you’ve been disabled and unable to work for 26 weeks. 5

Open EnrollmentOpen Enrollment at Daiichi Sankyo begins on Monday, November 8 andcontinues through Friday, November 19, 2010. This is your once-a-yearopportunity to review your benefit elections and decide if there are anychanges you want to make for 2011. Be sure to review the BenefitsE-Book at www.dsibenefits.com for detailed information about allof Daiichi Sankyo’s benefits.What You Need to DoIf you wish to continue your 2010 benefit elections, and cover thesame dependents as you did in 2010 for your medical and dentalcoverage, then you do not need to take any action during OpenEnrollment. Your 2010 elections will automatically carry over for 2011.However, if you wish to enroll in a Health Care or Dependent CareFlexible Spending Account in 2011, or if you want to make anychanges to your benefit elections for 2011or add or delete dependents,you must do so through the Daiichi Sankyo Benefits Enrollment ATLASPortal website during the Open Enrollment period.The benefit changes you make during Open Enrollment will take effect on January 1, 2011 (subject to anyLife Insurance increases subject to evidence of insurability). You will not be allowed to make any changesto your benefits during the calendar year unless you experience a qualified family status change such asa marriage, divorce, spouse’s loss or gain of employment, or birth or adoption of a new dependent child.During Open Enrollment, you should: 1. Go through the Benefits E-Book at www.dsibenefits.com and review your 2011 benefits. 2. Log on to the Benefits Enrollment ATLAS Portal at https://atlas.dsi.com/irj/portal to make any changes, add dependents or cancel coverage for 2011. Instructions for logging on are available in the Benefits E-Book. 3. Review your Benefits Confirmation Statement and let us know if there are any errors by December 31, 2010. 4. Keep the enclosed Wallet Card for your use as a reference during the year. 5. Read the Reliance Secure Travel flyer and cut out the card and keep it in your wallet.If you have questions about Open Enrollment or any We will be providing more detail about theof the details of the plans available at Daiichi Sankyo, changes through frequent e-mails fromyou will have the opportunity to speak to the benefits [email protected]. Please look forteam at the upcoming Open Enrollment live meetings them throughout the Open Enrollment period.and webinars or you can contact BenefitsAtWorkat 1-877-726-5961, ext. 2909 or 1-973-944-2909 oremail [email protected]. 6

This brochure is intended to provide you with general information about the benefit changes. If you need more information than what'sbeen provided, you should direct your questions only to a Daiichi Sankyo Benefits Representative or the plan's administrator. Actualplan provisions are contained in the plan documents. In the event of any conflict between the information in this brochure and theterms of the plan, the plan document will govern. Daiichi Sankyo reserves the right to alter, amend or terminate any of these plansat any time and without prior notice. November 2010