Hagens Berman Sobol Shapiro Cases

First DataBank Litigation

Date Filed: October 6, 2006

Court: U.S. District Court

Location: Boston

Hagens Berman Sobol Shapiro announced today that a settlement was reached with First Data Bank (FDB), publisher of the Average Wholesale Price list for pharmaceutical products. FDB was alleged to have improperly set the AWP for 95% of all retail drugs. The AWP list is used by health plans and state Medicaid programs in determining how much to pay pharmacies for certain drugs.

As part of the settlement, FDB will adjust the Wholesale Acquisition Cost to AWP mark-up on 95% of pharmaceuticals sold in the United States. FDB's adjusted mark-up on pharmaceutical products shall not exceed 1.20, resulting in a 4% price reduction in all retail drugs.

U.S. drug savings are estimated to reach $4 billion in 2007 alone. Of that, $3.3 billion will go to third party payers, while approximately $400 million will go to the uninsured.

FDB has also agreed to stop publishing the AWP list for pharmaceutical products after a two year notice period.

Recent Developments:

June 7, 2007 - Today the court gave its preliminary approval in a settlement between First Databank Inc., Medispan and the class of third party payers and consumers who purchased brand name drugs from the period 2001-2005.

The proposed settlement agreement was presented to the court in August 2006 and amended in May 2007 which states that FDB and Medispan would adjust the Wholesale Acquisition Cost to AWP mark-up on most major brand name pharmaceuticals sold in the United States. The agreement also limits the amount FDB can mark up pharmaceuticals resulting in a 4 percent price reduction in all retail drugs.

The settlement is expected to result in drug savings by purchasers of several billion dollars for both third party payers and uninsured.

Click here to read the order.