I was pleased to read in the 1/30 BNA Health Plan and Provider Newsletter, that on January 22, Judge Patti Saris of the U.S. District Court for the District of Massachusetts rejected the First Databank class action settlement that if approved would have caused First Databank to prospectively reduce its markup factor used to calculate the Average Wholesale Price for prescription drugs and set the wheels in motion to replace the AWP with another standard. In my opinion, the settlement would have disrupted the PBM market.

The judge allowed the parties two weeks to present an alternate settlement proposal. According to the report, the Judge refocused the parties on a settlement that provided monetary relief to consumers who had been overcharged by the erroneous markup. According to the National Community Pharmacists Association’s general counsel who attended the 1/22 hearing, the judge took the phase out of AWP off the negotiating table.

Here’s the link to the National Association of Chain Drug Store’s press release —

Here’s the blurb from the National Community Pharmacists Association’s web site

AWP Rollback BlockedA federal judge has rejected key elements of a proposed settlement of
the First DataBank/Medi-Span antitrust case that would have required a 4%
rollback of published Average Wholesale Price (AWP) figures, a move that would
have cost the average independent community pharmacy about $105,000. NCPA
vigorously opposed the proposed settlement. U.S. District Court Judge Patti B.
Saris told lawyers in the case to “go back to the drawing table.”The lawsuit was
brought by union health plans that alleged the two publishers conspired with
McKesson to increase AWPs, resulting in higher copayments for patients under the
plans’ AWP-based system. McKesson was not involved in the proposed
settlement.The parties involved are supposed to come back with a new proposed
settlement in early February. NCPA was not a party, but intervened when it
became apparent that independent community pharmacies would suffer greatly under the proposed settlement. NCPA filed a vigorous, detailed response lead by a
report from Ed Heckman, RPh, president PAAS National, and affidavits from nearly
two dozen independent community pharmacies.The judge mentioned the Heckman
report and NCPA favorably several times during the two-hour fairness hearing
Jan. 22 in Boston. “I heard very little that wasn’t positive to our interests,”
reported John Rector, Esq., NCPA general counsel. NCPA also was represented by
David Balto, Esq., an expert antitrust counsel.“We will continue to be active
and to keep you posted with further developments in this case,” Bruce Roberts,
RPh, NCPA executive vice president and CEO, told community pharmacists.