U.S. District Judge Patti Saris this week awarded preliminary approval to a recently amended settlement that could reduce the price of thousands of prescription drugs and scheduled a fairness hearing on a final settlement for Nov. 14, the Wall Street Journal reports (Wisenberg Brin, Wall Street Journal, 6/9).
In October 2006, publisher First Databank agreed to a tentative settlement with plaintiffs in a lawsuit that alleged the company colluded with prescription drug wholesaler McKesson to raise the average wholesale prices of medications to increase pharmacy profits and obtain business for McKesson. First Databank, a division of Hearst, is the primary U.S. publisher of AWPs, which health insurers and state Medicaid programs use to determine reimbursements to pharmacies for the dispensation of prescription drugs to members and beneficiaries.
Under the settlement, First Databank agreed to reduce the AWPs for many prescription drugs by five percentage points and end publication of AWPs for two years after the agreement becomes final (Kaiser Daily Health Policy Report, 10/6/06). The settlement, which likely will save consumers and health insurers billions of dollars in prescription drug costs, includes no admission of wrongdoing or monetary damages.
David Veal, an analyst for Morgan Stanley, said that progress in the lawsuit "allows a key risk to the outlook for pharmacy operators to move along" (Wall Street Journal, 6/9).
"Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.
Publication Date: 2007-06-13 07:00
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