First DataBank Reaches Settlement

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.

Click here to read more about the settlement and for more information about Hagens Berman's AWP litigation.

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