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Proposed drug price settlement not enough

BY Jim Frederick

ALEXANDRIA, Va. —Pharmacy and retail groups have rejected a proposal from two drug data publishers to settle a class-action suit over prescription drug payment rates, asserting the settlement plan is inadequate.

In mid-November, the National Association of Chain Drug Stores and the Food Marketing Institute filed a brief and an economic report opposing the proposed amended First DataBank and Medi-Span class settlements in the U.S. District Court for the District of Massachusetts. Both groups asserted that the settlement plans would “substantially cut health plans’ drug payments, harming community pharmacies.”

At issue in the case was the rate at which union pension funds, teachers’ unions and other health-plan sponsors reimburse pharmacies for drugs dispensed to their members. Historically, that rate has been based on the average wholesale price of a drug, but the health-plan payers acting as plaintiffs in the suit charge that the AWP has risen to unrealistic levels that no longer reflect the real differences between what wholesalers pay manufacturers for a drug and the prices those wholesalers charge their retail pharmacy clients.

In their class-action filing, the plaintiffs asserted that health plans are paying too much for drugs, based on AWPs now averaging a 25 percent markup over the wholesale price of the drug. Originally named in the suit was First DataBank, which was accused of conspiring with McKesson Corp. to set AWP rates artificially high. But in May 2007, Medi-Span, a division of Wolters Kluwer Health, was named as a defendant in a similar class action involving the publication of AWPs.

On Jan. 22, federal Judge Patti Saris rejected the original settlements proposed by First DataBank and Medi-Span, in part because of a brief and economic analysis filed jointly by NACDS and FMI in objection to those proposed settlements, as well as opposition briefs filed by other plaintiffs. But both groups asserted that the amended settlements would still reduce the AWP benchmark by 4 percent for about 1,400 drug products. NACDS and FMI also pointed out in their brief that First DataBank and Medi-Span would reduce AWPs for thousands of other drug products, and will stop publishing AWPs altogether within two years, “seemingly ignoring the court’s rejection of that plan in their original proposed settlement.”

In short, “the proposed settlements fail to fairly compensate the class members and would unfairly penalize retail pharmacies,” both groups argued.

“These settlements disproportionately impact retail pharmacies,” said NACDS president and chief executive officer Steve Anderson. “Retail pharmacies would likely bear the brunt of these settlements. We urge the district court to carefully consider the amended proposal and its impact on the patients who rely on their community pharmacist.”

FMI president and chief executive officer Leslie Sarasin added that the proposal advanced by the two drug-price publishers “would provide inadequate benefits to the plaintiffs and, worse, undermine the ability of pharmacists to serve many families, especially in rural and innercity America.”

Opposition to the original settlement early this year was strong enough to draw together two other groups usually found on opposite sides of any issue: the National Community Pharmacists and the Pharmaceutical Care Management Association, representing the pharmacy benefit management industry. Both groups came out against the proposal.

NCPA said the AWP settlement would be “devastating” to independent pharmacies. “If the AWP is substantially reduced, independent pharmacies will be forced to dispense hundreds of branded drugs at a significant loss, driving hundreds of pharmacies out of business,” NCPA asserted in a court filing.

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Camera scopes out perimeters of injuries

BY Jenna Duncan

ATLANTA IP2Biz announced Friday that it is developing a prototype, non-touch camera that examines wounds to compute their size at a testing facility at the Shepherd Center in Georgia.

The camera fits in the administrator’s hand and includes programming that both charts and records the area of a wound. It does not require contact with the affected area. In addition to aiding treatment, this device is being developed as a method to help provide proof of injury for insurance and damages claims.

Associate professor of applied physiology and industrial design at the Georgia Institute of Technology, Stephen Sprigle, led the development of the camera. “We designed the device to address a key and growing need in wound management,” Sprigle said in a statement. “Our goal was to provide a low-cost, easy-to-use device that used the latest technology to provide measurements of the area of the wound.”

The Shepherd Center in Atlanta is a not-for-profit hospital that provides specialized care and rehabilitation.

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BJ’s Wholesale reports results for November

BY Jenna Duncan

NATICK, Mass. BJ’s Wholesale Club reported Friday an increase in sales for November with at $783.2 million, up 5.2 percent from $744.4 million reported from November 2007. Same-store sales at BJ’s Club stores were up about 4 percent for November, including a drop in sales of gasoline of about 2 percent.

BJ’s said that its same-store merchandise club sales were up by 6.2 percent, versus guidance of 2 percent to 3 percent. The wholesale club chain said the rise was due to increases in sales of consumables and food, particularly in the fourth week, reflecting a calendar shift that included Thanksgiving.

In addition BJ’s said sales for November were up in the metropolitan New York market, but saw the lowest increase in the Southeast.

For same-store club sales, food sales reportedly were up by about 14 percent and general merchandise sales were down by about 4 percent, according to the company.

BJ’s said that its departments with the strongest sales for November included bakery, computer products, dairy, deli, frozen foods, health and beauty, meat, pet foods, prepared foods, and snacks, as well as others. The company said that areas with weaker sales included apparel, cigarettes, electronic items, TVs, toys and other areas.

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