AWP ('Ain't' What's Paid) taken to the woodshed? Let's hope!

Will First DataBank Deal Get Settled?

From Pharmalot.com, May 22, 2007

"Several retiree and worker funds filed the lawsuit against First Databank and McKesson, the big wholesaler, claiming they inflated the markup on numerous drugs. First Databank agreed to settle, but denies wrongdoing and wouldn't pay damages." (Imagine that! - John)

A conference is expected to day in federal court in Boston over a proposed settlement in the First Databank litigation, which centers on the average wholesale prices published for brand-name drugs. First Databank is a unit of Hearst.

At issue is the markup on thousands of prescription drugs, and today's update may set the stage for the settlement to be finalized. If ultimately approved, a deal could potentially save consumers and insurers billions of dollars in drug costs.

Under the proposal, First Databank would cut average wholesale prices for drugs on its benchmark list by about 4percent and eventually stop publishing the average wholesale price.

Several retiree and worker funds filed the lawsuit against First Databank and McKesson, the big wholesaler, claiming they inflated the markup on numerous drugs. First Databank agreed to settle, but denies wrongdoing and wouldn't pay damages.

McKesson hasn't agreed to settle. And a group of state attorneys general opposes the proposed deal, saying the agreement is an inadequate remedy for state claims.

In 2002, First DataBank suddenly raised prices on its AWP list. Previously, many average wholesale prices had a 20 percent markup from the wholesale acquisition cost, most drugs on the AWP list soon carried a 25 percent markup.

Further reading...
The Wall Street Journal (subscription required);
Settlement agreement.