KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Drug Sellers, Benefit Managers Poise For Court-Ordered Price Cuts

"A forthcoming rollback of benchmark drug prices -- a court-approved move meant to benefit consumers -- should have little effect on the bottom line for pharmacy-benefit managers or their clients, as companies have taken protective steps," the Wall Street Journal reports. Pharmacies, however, worry the 4 percent reduction in benchmark prices could result in Medicaid reductions. Benefit managers initially opposed the cut, but say they have adjusted contracts to make up for it.

The cuts go into effect Sept. 26 and stem "from a 2005 class-action lawsuit alleging that First Databank [a drug price publisher] and drug wholesaler McKesson Corp. had worked together to wrongfully inflate the published "average wholesale" benchmark prices used to establish reimbursements to pharmacies from health insurers and pharmacy-benefit managers. A federal judge found the scheme resulted in higher profits for retail pharmacies, although drugstores were not defendants in the case" (Brin, 9/17).

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