First DataBank AWP Lawsuit - Final Judgment
Posted by Roy Wilkinson on Thu, Apr 02, 2009 @ 10:59 AM
We didn't think Judge Saris would delay much longer, and she didn't! On March 30, 2009 Judge Patti Saris
of the U.S. District Court in Massachusetts entered her Final Order and Judgment approving the class action settlement over the manipulation of Average Wholesale Price ("AWP") with First DataBank and Medi-Span. This was the culmination of litigation that began with the PAL Coalition lawsuits in June, 2005.
The settlement includes the following:
- First DataBank ("FDB") and Medi-Span ("M-S") will adjust the Blue Book AWPs for any drugs identified in the action that were marked up beyond 120% of Wholesale Acquisition Cost ("WAC"). Additionally, they will apply the same reduction to all National Drug Codes ("NDCs") that are in excess of the 120% markup.
- FDB and M-S must make their adjustments within 180 days from the date of this final judgment.
- FDB and M-S will discontinue publishing the Blue Book AWP within 2 years from the date of this judgment.
- FDB and M-S will pay a fine of $2.7 million to settle claims that their market conduct was improper.
The application of this ruling will be fascinating to watch. Many PBMs include language in their contracts to protect their profit margins in the event of a pricing adjustment to AWP. They sometimes use the language "to preserve the original economic intent of the parties." Plan sponsors should be asking the question "Whose original economic intent?" They believe that market conditions that reduce the costs of drugs should accrue to their plan and their members.