Impact of First DataBank AWP Settlement
June 17, 2009
View the Program Flyer here.
On June 17, 2009, McDermott Will & Emery
(“MWE”) and the National Association of Chain Drug Stores
co-hosted a first-ever luncheon program, entitled Impact of
First DataBank AWP Settlement at MWE’s Manhattan
Don Bell, Esq., General Counsel of the National
Association of Chain Drug Stores, and T. Reed Stephens, Esq., partner in
the Health Law and Trial Departments of MWE’s Washington, D.C.
office, discussed the background of the Prescription Access
Litigation, including the New England Carpenters v. First
DataBank, Inc., McKesson Corp., et al. matter (D. Mass.); the
recent court-approved settlement of the litigation; and the likely
after-effects of the settlement's terms on prescription drug
reimbursement by both government and private third party payers.
[First DataBank is one of a small number of companies that publish
prices for FDA-approved drugs that are, in turn, used by many of these
third party payers to determine what pharmacies will be paid for
dispensing these drugs.]
Mr. Stephens focused his presentation on familiarizing luncheon
attendees with the specifics of the Average Wholesale Price ("AWP")
litigation which has been raging for many years between plaintiffs and
pharmaceutical manufacturers in various state and federal venues.
Mr. Bell followed up with an overview of the important policy issues
raised by the settlement and the resulting appellate challenges mounted
by the retail pharmacy sector in response to the non-monetary terms of
the settlement. Both of the speakers also discussed the recent
filing of a new class action lawsuit by self-insured employers against
several major retail pharmacy chains alleging that the pharmacies had
used inflated drug AWPs to overcharge these employers for their
employees' prescription drug coverage.
Section members asked a number of probing questions regarding the
possibility of pharmacies having to cope with reduced drug reimbursement
from insurers as a result of First DataBank's settlement pledge to
reduce by 5% the published AWP of thousands of prescription drugs
beginning in September of this year.