01/22/08
Community pharmacy learned a lot about the future of AWP at a Federal Court Hearing today. Judge Saris of the Federal District Court of Massachusetts informed those in attendance that she would not approve several aspects of the proposed First Databank/Medi-Span Settlement, but did believe pharmacies were to some degree unjustly enriched at the expense of consumers. With that said, it is clear that the one hurdle that Judge Saris has in approving the Settlement is her concern for putting independent pharmacies out of business. Several times she referenced this fact and ultimately decided that she would consider a 5% roll-back on just those drugs that were involved in the initial "inflation scheme". This would decrease the number of brand name drugs that would be impacted by the AWP roll-back from 8,000 to 1,400 NDCs. Judge Saris went further, however, and will appoint an independent economic advisor to the Court for the limited purpose of determining the impact of this potential new Settlement option on independent pharmacies. Plaintiff's counsel provided data that suggested the 1,400 NDCs would still account for approximately 40% of the brand name drugs sold in 2006. Judge Saris also appeared to be amicable to allowing pharmacies more time than 60 days to renegotiate contracts in the event of any settlement agreement. In addition, Judge Saris ruled out the Settlement provision that would require First DataBank and Medi-Span to stop publishing AWP within two years, indicating that she did not want to be the ongoing arbiter of drug pricing in the United States. Judge Saris also ruled out the provision that would establish a "data room" for third party payers to access in any future AWP lawsuits.
It is important to note that Judge Saris commented, "I have never in my career as a federal judge had such an outpouring of concern from objectors as I did in this case". Objectors heard at the Hearing included attorney's for IPC, NCPA, NACDS, ASCP and PCMA. We still have work to do, but things look much better than just a week ago.
Mark E. Kinney, R.Ph.
Vice President of Government Affairs
Independent Pharmacy Cooperative
*Thanks Mark for all your input...we look forward to future Government News updates.
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