Alexandria, Va. — April 2, 2009 — The National Association of Chain Drug Stores (NACDS) and the Food Marketing Institute (FMI) today filed a motion seeking a stay in federal district court in Massachusetts following the release of the final judgment in the First DataBank and Medi-Span lawsuit. The motion asks the district court to halt implementation of the approved average wholesale price (AWP) reductions that would dramatically cut pharmacy reimbursement.   

“Implementation of these AWP cuts could jeopardize patient access to pharmacy services, as pharmacies will face reduced Medicaid reimbursement rates,” said NACDS President & CEO Steven C. Anderson, IOM, CAE. “We are hopeful that the Court will prevent this implementation and rule in favor of pharmacy access for patients.”

“This decision violates the fundamental constitutional principle of being given the opportunity to fully participate in the legal process,” said Deborah White, senior vice president and chief legal officer, FMI. “We look forward to a fair hearing on the issues raised by this decision.”

Last month, Judge Patti B. Saris of the United States District Court for the District of Massachusetts ruled to reduce the AWPs used to set pharmacy reimbursement rates to 120 percent of wholesale acquisition cost (WAC) for 1,442 designated drug products. As a result of the court’s approval of the settlement, First DataBank and Medi-Span issued statements announcing that AWPs will be reduced to 120 percent of WAC for all remaining drug products effective September 26, 2009. First DataBank and Medi-Span also plan to stop publishing AWPs, which are used as a prescription drug pricing benchmark.

NACDS and FMI previously filed a legal brief, including an economic analysis, to counter the proposed settlements. The brief and analysis detailed the numerous ways in which the proposed settlement’s cost savings and estimated impact were based on inaccurate economic analysis and would unfairly hurt retail pharmacies. The AWP reductions will cut Medicaid reimbursement by about $68 million each year. In addition, pharmacies that are unable to renegotiate their private sector reimbursement contracts will face a net four percent reduction in AWP-based reimbursement.


The National Association of Chain Drug Stores (NACDS) represents traditional drug stores, supermarkets, and mass merchants with pharmacies. Its more than 160 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 85 international members representing 28 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.