ALEXANDRIA, Va. — The Food Marketing Institute and the National Association of Chain Drug Stores yesterday filed a motion seeking a stay in federal district court in Massachusetts following the release of the final judgment in the First DataBank and Medi-Span lawsuit. The motion asks the district court to halt implementation of the approved average wholesale price (AWP) reductions, which would dramatically cut pharmacy reimbursement.
“This decision violates the fundamental constitutional principle of being given the opportunity to fully participate in the legal process,” said Deborah White, senior vice president and chief legal officer, FMI, in a press statement. “We look forward to a fair hearing on the issues raised by this decision.”
“Implementation of these AWP cuts could jeopardize patient access to pharmacy services, as pharmacies will face reduced Medicaid reimbursement rates,” said Steven Anderson, president and chief executive officer of NACDS. “We are hopeful that the Court will prevent this implementation and rule in favor of pharmacy access for patients.”
Last month, Judge Patti Saris of the U.S. District Court for the District of Massachusetts ruled to reduce the AWPs used to set pharmacy reimbursement rates to 120% of wholesale acquisition cost (WAC) for 1,442 designated drug products. As a result of the court’s approval of the settlement, First DataBank and Medi-Span issued statements announcing that AWPs will be reduced to 120% of WAC for all remaining drug products, effective Sept. 26, 2009.
First DataBank and Medi-Span also plan to stop publishing AWPs, which are used as a prescription drug pricing benchmark.
NACDS and FMI previously filed a legal brief, including an economic analysis, to counter the proposed settlements. The brief and analysis detailed the numerous ways in which the proposed settlement’s cost savings and estimated impact were based on inaccurate economic analysis and would unfairly hurt retail pharmacies.
The AWP reductions will cut Medicaid reimbursement by about $68 million each year. In addition, pharmacies that are unable to renegotiate their private-sector reimbursement contracts will face a net 4% reduction in AWP-based reimbursement.
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