NACDS, FMI Urge Court to Oppose Proposed AWP Settlements that Would Penalize Retail Pharmacy and the Patients They Serve

November 19, 2008
Alexandria, Va. – The National Association of Chain Drug Stores (NACDS) and Food Marketing Institute (FMI) filed a brief and economic report opposing the proposed amended First DataBank and Medi-Span class settlements in the U.S. District Court for the District of Massachusetts, which the plaintiffs suggested would substantially cut health plans’ drug payments, harming community pharmacies.

Earlier this year, federal Judge Patti B. 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 others.

The amended settlements by First DataBank and Medi-Span would reduce the prescription drug benchmark of average wholesale prices (AWPs) by 4 percent for about 1,400 drug products. Further, as NACDS and FMI point out in their brief, First DataBank and Medi-Span will 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.

NACDS and FMI continue to argue that the proposed settlements fail to fairly compensate the class members and would unfairly penalize retail pharmacies. The brief also includes an economic analysis detailing the numerous ways in which the alleged cost savings and impact of the settlements were based on an inaccurate economic analysis.

“These settlements disproportionately impact retail pharmacies,” said NACDS President and CEO Steven C. Anderson, IOM, CAE “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.”

“The settlements would provide inadequate benefits to the plaintiffs and, worse, undermine the ability of pharmacists to serve many families, especially in rural and inner-city America,” said FMI President and CEO Leslie G. Sarasin, Esq., CAE.


The National Association of Chain Drug Stores (NACDS) represents traditional drug stores, supermarkets, and mass merchants with pharmacies. Its more than 170 chain member companies include regional chains with a minimum of four stores to national companies. NACDS members also include more than 1,000 suppliers of pharmacy and front-end products, and nearly 90 international members representing 29 countries. Chains operate 39,000 pharmacies, and employ a total of more than 2.5 million employees, including 118,000 pharmacists. They fill more than 2.5 billion prescriptions yearly, and have annual sales of over $750 billion. For more information about NACDS, visit

Food Marketing Institute (FMI) conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1,500 member companies — food retailers and wholesalers — in the United States and around the world. FMI’s U.S. members operate approximately 26,000 retail food stores and 14,000 pharmacies. Their combined annual sales volume of $680 billion represents three-quarters of all retail food store sales in the United States. FMI’s retail membership is composed of large multi-store chains, regional firms and independent supermarkets. Its international membership includes 200 companies from more than 50 countries. FMI’s associate members include the supplier partners of its retail and wholesale members.

Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit and for information regarding the FMI foundation, visit