Re: Medi-Span Named As Defendant in Similar AWP Class Action Litigation; Preliminary Approval to Both Medi-Span and First DataBank AWP Settlements Granted; Fairness Hearing Regarding Final Approval of the Settlement Scheduled
September 5, 2007
Dear First DataBank Customer:
In October 2006, I announced certain changes in our drug pricing reporting practices that may impact your use of First DataBank’s National Drug Data File Plus™ database and other related products. These changes relate to the publishing of the Blue Book Average Wholesale Price (Blue Book AWP) and the proposed settlement of a class action litigation concerning the publication of Blue Book AWP.
I would like to share with you the latest developments regarding this proposed settlement.
In May 2007, Medi-Span (a division of Wolters Kluwer Health) was named as a defendant in a substantially similar class action litigation involving the publication of AWP. Subsequently, the United States District Court, District of Massachusetts granted preliminary approval to settlements for both First DataBank and Medi-Span. The court also issued an order directing notice to the class members, and scheduled a fairness hearing for January 22, 2008 regarding final approval of the settlement.
Final approval of the court is contingent upon the judge's finding that the proposed settlement is fair, reasonable and adequate.
If the terms of settlement are approved and ordered by the court, First DataBank will (1) adjust its reporting of Blue Book AWP for certain prescription drugs by reducing the mark-up factor utilized in connection with the calculation of the Blue Book AWP data field to 1.20 for all those NDCs that have a mark-up factor to WAC or Direct Price in excess of 1.20 (such adjustment is estimated to occur during the second quarter of 2008), (2) discontinue publishing the Blue Book AWP data field for all drugs no later than 2 years after the effective date of the final court order, (3) establish a centralized data repository to facilitate reasonable access to discoverable material from First DataBank concerning its drug price reporting practices, and (4) work with major participants in the healthcare industry in court approved discussions intended to facilitate the establishment of a sustainable benchmark for drug reimbursement. First DataBank will continue to publish all other available drug pricing information, including WAC, Direct Price, and suggested wholesale price, as well as our clinical drug information.
First DataBank will continue to publish other available drug pricing information including WAC, Direct Price, suggested wholesale price, Federal Financing Participation Upper Limits (FFPUL), as well as our clinical drug information.
Medi-Span has determined that it will settle the terms of the litigation including a reduction of the mark-up factor utilized in connection with the calculation of its AWP data field and, ultimately, the discontinuation of publishing its AWP data field for all drugs, subject to certain conditions.
We at First DataBank understand that these changes may have a significant impact upon you. It is our plan to institute these changes in a responsible manner and to continue to provide you with sufficient notice of any new developments.
Please be assured that First DataBank is committed to providing our customers with the best available drug information. We will continue to work with the public and private sector to gather and publish additional drug pricing data elements, as available, and to facilitate the establishment of sustainable drug reimbursement benchmarks.
If you have any questions, please feel free to call our Customer Service Department at 1-800-428-4495 ext. 220.
It is our pleasure to serve you and I greatly appreciate your patience and cooperation during this time of transition.
Very truly yours,
Donald M. Nielsen, M.D.
President
