First DataBank settles lawsuit for $1 million

6/4/2008

BOSTON First DataBank, a provider of integrated databases of information about medications, has agreed to pay $1 million to settle a lawsuit alleging it conspired with McKesson to manipulate the average wholesale price of drugs.

The case, New England Carpenters Health Benefits Fund vs. First DataBank, filed in 2005, alleges that First DataBank and McKesson “wrongfully increased the so-called wholesale acquisition cost to AWP markup factor applied to numerous prescription pharmaceuticals through a scheme begun in late 2001 and 2002,” which meant that the plaintiffs in the class action lawsuit made “substantial excess payments.”

First DataBank denies any wrongdoing or liability and “has valid and complete defenses to the claims asserted against [it] in the class action,” which it is settling to avoid the expense and inconvenience of further litigation, the settlement says.

The case, filed in the U.S. District Court for the District of Massachusetts, explicitly excludes government entities from joining the class action suit. The San Francisco Health Plan and the state of Connecticut have filed suits with similar charges that McKesson and First DataBank inflated the spread between WAC and AWP from 20 percent to 25 percent, costing state Medicaid and other health programs untold sums.

First DataBank is not named as a defendant in the two new lawsuits. McKesson continues to defend itself in all three cases.

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