District Court Grants Final Approval of Plaintiffs’ Settlements with First DataBank and Medi-Span – Rollback of Over 1,400 NDCs To Go Into Effect 180 Days After Final Judgment
Today Judge Patti B. Saris of the United States District Court for the District of Massachusetts granted final approval to Plaintiffs’ settlement with defendant pharmaceutical pricing databases First DataBank (“FDB”) and Medi-Span. The settlements collectively provide for Defendants to (1) rollback the WAC-to-AWP spreads for 1,442 NDCs from 25% to 20% and (2) pay $2.7 million into a settlement fund for the benefit of the Classes.
The rollbacks will mean that insurance companies and other third-party payors will pay less for the drugs that are rolled back. The $2.7 million will be added to the $350 million settlement fund created by virtue of Plaintiffs’ settlement with co-defendant McKesson Corporation (“McKesson”). For information about the McKesson settlement, click here. WW is co-lead counsel in the cases against FDB, Medi-Span and McKesson.
In approving the settlements, the Court found that “[t]he quality of counsel on both sides and their conduct during the initial phases of litigation have been top-notch.” It noted that the documentary evidence in the case “strongly supports a finding of liability with respect to both defendants.” However, noting the Defendants’ weak financial conditions and lack of availability of insurance coverage, the Court explained that “you can’t get blood from a stone.” The Court therefore approved of the largely injunctive relief settlements, which the Court held would “have the added advantage of righting a wrong and providing greater transparency in drug pricing, a notoriously opaque business.”
Finally, the Court rejected the two objections filed by class members as well as the objections filed by “[a] veritable alphabet soup of non-class members,” namely pharmacies and PBMs. The Court held that, even if Defendants planned to roll back more than the 1,442 NDCs provided for in the Settlements of their own accord, “[n]ot only do FDB and Medi-Span have the right to make these changes, but in my view, after eight years of this MDL, rolling back AWPs or phasing them out as a pricing benchmark is in the public interest and to the benefit of the class.” It further held that, though many pharmacy groups claimed that their members would be injured by the settlements these pharmacies “were unjustly enriched when drug prices were fraudulently inflated during the scheme, yet they have not been asked to disgorge their profits.” Further, the Court said it would mitigate the effects of any claimed harm by delaying the implementation of the settlements until 180 days after the entry of final judgment. The Court has asked the parties to file a proposed judgment within one week.
For a copy of the Court’s order, please click here.