New settlement proposed in First DataBank AWP suit

June 2, 2008

A new settlement has been proposed in the average wholesale price suit against First DataBank, McKesson, and Medi-Span.

A new settlement has been proposed in the First DataBank average wholesale price suit, just three months after a previous settlement was scuttled by the judge. Under the terms of the new agreement, First DataBank agrees to pay $1 million in compensation and to reduce the wholesale average cost (WAC) to AWP markup for 1,356 pharmaceutical products. Unlike the original settlement, the new agreement does not promise to end reporting of AWP prices. The fate of the new settlement, however, is unclear. According to John Rector, senior VP and general counsel at the National Community Pharmacists Association, the group expects to oppose the new settlement. "The judge has said she’s concerned about the settlement’s impact on independents, and this does not say anything about the potential impact.” In the suit, a group representing unions alleged that First DataBank and McKesson conspired to inflate the average wholesale price for prescription medications. McKesson denies any wrongdoing and is not part of the settlement. Pharmacy groups have charged that the original settlement would unfairly impact pharmacists and that contracts already compensated for the inflated AWPs. Separately, Medi-Span is accused solely of negligence.

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