Inside This Issue - News
NACDS blasts AWP settlement
April 6th, 2009
ALEXANDRIA, Va. – A federal court’s approval of final settlements involving First DataBank and Medi-Span is being opposed by the National Association of Chain Drug Stores.
The ruling by U.S. District Judge Patti Saris effectively reduces the average wholesale prices (AWPs) used to establish pharmacy reimbursement rates to 120% of the wholesale acquisition cost, according to NACDS.
First DataBank Inc. (a subsidiary of Hearst Corp.) and Medi-Span (a unit of Wolters Kluwer Health) were defendants in a class-action lawsuit filed in 2007, in which Medi-Span was charged with negligently publishing AWP information wrongfully inflated by First DataBank, a previous Medi-Span owner.
Before the ruling NACDS and the Food Marketing Institute had filed a legal brief to counter the proposed settlements. The brief included an analysis detailing ways in which the two organizations assert that the settlements were based on inaccurate economic reports and would unfairly hurt retail pharmacies. NACDS notes that the AWP reductions will cut Medicaid reimbursement by about $68 million each year.
Pharmacies that are unable to renegotiate private sector contracts will face a net 4% reduction in AWP-based reimbursement, adds NACDS.
In January of last year, Saris initially rejected the first set of proposed settlements and indicated that the court would eventually approve new litigation settlements that would reduce a smaller number of AWPs.
“These new approved settlements unduly and inappropriately penalize pharmacies as well as patients if pharmacies are forced to close or alter their business practices,” says NACDS president and chief executive officer Steve Anderson.
“We are currently engaging with our members to determine the next steps regarding the ruling and will determine the course of action that best represents pharmacy for the benefit of the patients.”
First DataBank and Medi-Span have announced that they will eventually stop publishing AWPs, which are used as a benchmark for prescription drug pricing.