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Class Settlement Could Result in Considerable Savings for Certain Consumers of Prescription Pharmaceuticals

BOSTON, Sept. 19 /PRNewswire-USNewswire/ -- The United States District Court for the District of Massachusetts has granted preliminary approval of two Proposed Settlements on behalf of a class of people and entities that purchased certain prescription drugs. Plaintiffs filed the lawsuits, New England Carpenters Health Benefits Fund v. First DataBank, Inc., No. 1:05-CV-11148-PBS and D.C. 37 Health & Security Plan v. Medi-Span, No. 07-cv-10988-PBS, concerning how the published price of drugs are determined, what consumers pay for the drugs and what third party payors reimburse for them.

First DataBank, Inc., ("FDB") and Medi-Span publish data related to the prices of prescription drugs in their printed and electronic databases. The data includes the Average Wholesale Price ("AWP") of each drug. Pharmaceutical manufacturers report certain prices to FDB and Medi-Span. FDB then marked-up these prices to get the AWP reported in their publications and databases. From December 2001 into April 2004, Medi-Span published Average Wholesale Prices that it obtained from FDB. Subsequently, Medi-Span independently published certain AWP information in its publications and databases. Third-party payors and pharmacies may use the AWP as a benchmark in determining the amount of reimbursement for drugs or the cost of drugs to certain consumers.

One of the lawsuits alleges that FDB and McKesson Corporation wrongfully inflated the mark-up used to determine the AWP. The other lawsuit claims that Medi-Span negligently published inflated prescription drug prices. As a result, the two lawsuits claim that insurers, Third-Party Payors ("TPPs") and some consumers paid more for certain drugs than they should have.

"Although the Proposed Settlements do not provide money to consumers right now, they will likely allow certain consumers to save millions of dollars in future prescription drug costs," said Jeffrey Kodroff of Spector Roseman & Kodroff P.C. and Thomas M. Sobol of Hagens Berman Sobol Shapiro LLP, Counsel for the Plaintiffs in this case. "This is a first step in making all prescription drugs more affordable for consumers."

The Proposed Settlements provide "injunctive relief." This means that instead of paying money damages, the companies agree to change what they are doing to benefit the Class. In these lawsuits, a substantial benefit is provided to the Class because FDB and Medi-Span will:

-- Reduce the mark-up factor for thousands of drugs in their respective

data publications. Class Counsel estimate that this reduction may

save well over a billion dollars in future drug costs for consumers,

insurers and TPPs in a single 12-month period.

-- Cease to publish an AWP within two (FDB) or three (Medi-Span) years

of the Proposed Settlements final approval.

-- Provide information on drug price publishing in connection with this

and other lawsuits. Class counsel believe this will likely provide

additional benefits, including monetary benefits, to Class Members

in drug pricing lawsuits against other parties.

"First DataBank denies that it has any liability as a publisher of information that relies on data provided by others. First DataBank is dedicated to reporting relevant and reliable drug information, which we believe this settlement promotes," said Eve Burton, legal counsel for FDB. "Medi-Span denies wrongdoing and will continue to serve as a reputable publisher of drug price information provided to Medi-Span by third parties," said Eric Cardinal, Director Drug File Products for Medi-Span.

The Class consists of all individual persons or entities that made purchases and/or paid, whether directly, indirectly, or by reimbursement, for all or part of the purchase price of certain prescription pharmaceuticals based on the AWP data reported by FDB or Medi-Span. Consumers who pay a fixed co-pay for prescription drugs are not affected by this settlement.

The Court will hold a Final Approval Hearing on January 22, 2008 at 2:00 p.m. to consider whether the Proposed Settlements are fair, reasonable, and adequate and the motion for attorneys' fees and expenses. For more information regarding the Class Action visit

SOURCE FDB/Medi-Span Settlement Administrator
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