NACDS, FMI file motion to prevent AWP reductions in Massachusetts

ALEXANDRIA, Va. The National Association of Chain Drug Stores and the Food Marketing Institute filed a motion late Thursday 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 asked the district court to halt implementation of the approved average wholesale price reductions that dramatically would cut pharmacy reimbursement.

“Implementation of these AWP cuts could jeopardize patient access to pharmacy services, as pharmacies will face reduced Medicaid reimbursement rates,” said NACDS president and CEO Steve Anderson.  “We are hopeful that the Court will prevent this implementation and rule in favor of pharmacy access for patients.”

“This decision violates the fundamental constitutional principle of being given the opportunity to fully participate in the legal process,” said Deborah White, SVP and chief legal officer, FMI. “We look forward to a fair hearing on the issues raised by this decision.”

Last month, Judge Patti B. 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 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 four percent reduction in AWP-based reimbursement.