Inside This Issue - News
NACDS, FMI weigh in on AWP suit
April 20th, 2009
ALEXANDRIA, Va. – The National Association of Chain Drug Stores and the Food Marketing Institute this month filed a motion seeking to prevent average wholesale price (AWP) cuts in the First DataBank Inc. and Medi-Span Inc. lawsuit settlements. The cuts would dramatically reduce pharmacy reimbursement.
“Implementation of these AWP cuts could jeopardize patient access to pharmacy services, as pharmacies will face reduced Medicaid reimbursement rates,” says NACDS president and chief executive officer Steve Anderson. “We are hopeful that the court will prevent this implementation and rule in favor of pharmacy access for patients.”
Approval of the settlements in March by district judge Patti Saris effectively reduced the AWPs used to set pharmacy reimbursement rates to 120% of wholesale acquisition cost for 1,442 drug products. First DataBank and Medi-Span plan to stop publishing AWPs, which are used as a prescription drug pricing benchmark.
First DataBank (a subsidiary of Hearst Corp.) and Medi-Span (a unit of Wolters Kluwer Health) were defendants in a class action filed in 2007, in which Medi-Span was charged with negligently publishing AWP information wrongfully inflated by First DataBank, a prior Medi-Span owner.
NACDS and FMI previously filed a legal brief, including an economic analysis, to counter the proposed settlements. The associations detailed ways in which the settlement’s estimated savings impact was based on inaccurate analysis and would unfairly hurt retail pharmacies.
The AWP reductions will cut Medicaid reimbursement by about $68 million each year. Also, pharmacies unable to renegotiate their private-sector reimbursement contracts will face a net 4% reduction in AWP-based reimbursement.
“This decision violates the fundamental constitutional principle of being given the opportunity to fully participate in the legal process,” says Deborah White, senior vice president and chief legal officer at FMI. “We look forward to a fair hearing on the issues raised by this decision.”