First Databank to Participate in Effort to Identify New York State Pharmacy Drug Acquisition Costs

Survey will be employed to develop transparent drug pricing standard

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- First Databank (FDB), a leading provider of clinical drug knowledge that helps improve medication-related decisions and a leading publisher of drug pricing information, today announced it is participating with the State of New York in a project that will result in a comprehensive survey of New York State pharmacy drug average acquisition costs. The use of an average acquisition cost, or AAC, was authorized as a reimbursement benchmark for New York State Medicaid by legislation enacted in April, 2011. AAC reimbursement was one of the initiatives generated by the New York Medicaid Redesign Team, which was tasked by Governor Cuomo to find ways to reduce costs and increase quality and efficiency in the Medicaid program.

The survey process will be administered by the State of New York and will be assisted by FDB and Ernst & Young, an accountancy corporation. It is scheduled for implementation in early to mid-2012 in accordance with regulations issued by the New York State Department of Health in October, 2011. The regulations authorize the collection of information necessary to identify drug acquisition costs from Medicaid provider pharmacies. Acquisition cost is defined as “the invoice price to the pharmacy of a prescription drug dispensed to a Medicaid recipient, minus the amount of all discounts and other cost reductions attributable to such dispensed drug.”

A corresponding survey will also be conducted to determine pharmacies’ average cost of dispensing (COD), so that both components of pharmacy reimbursement –- ingredient cost and dispensing cost -– can be based on true and current market data, rather than an Average Wholesale Price (AWP) or Wholesale Acquisition Cost (WAC) reported by manufacturers and a COD not derived from current costs.

The project’s general outline involves three participants: Ernst & Young, who will develop the survey instrument, the statistical sampling methodology and the calculation algorithms required to identify AAC and COD; New York State, who will electronically collect the required information from providers and transmit de-identified raw data to FDB; and FDB, who will apply the defined algorithms to the raw data to arrive at AACs. FDB will subsequently publish the AACs to the State.

“We appreciate the opportunity to assist the State of New York in its movement to a rational and evidence-based benchmark for drug reimbursement,” said Gregory Dorn, MD, FDB president and CEO. “Our decision to discontinue publication of an Average Wholesale Price type in September of 2011 was based on our belief that it was unsustainable as a point of reference. We welcome the effort by the State of New York to determine actual acquisition costs and believe it is a significant step on the path to a better market standard.”

FDB’s clinical and drug pricing information is utilized by thousands of hospitals and pharmacies across the United States, as well as by 44 states, CMS and the FDA. For nearly a decade, the company has worked with both government agencies and the private sector to help identify an alternative to the AWP pricing standard that is reliable, sustainable and transparent.

About First DataBank (FDB)

First Databank (FDB) provides drug knowledge that helps healthcare professionals make precise medication-related decisions. With thousands of customers worldwide, FDB enables our information system developer partners to deliver a wide range of valuable, useful, and differentiated solutions. As the company that virtually launched the medication decision support category, we offer more than three decades of experience in transforming drug knowledge into actionable, targeted, and effective solutions that improve patient safety and healthcare outcomes. For a complete look at our solutions and services please visit fdbhealth.com.

© 2012 First Databank, Inc. A subsidiary of Hearst Corporation. All trademarks mentioned herein are the properties of their respective owners.



CONTACT:

First Databank, Inc.
Denise Apcar, 650-872-4514
[email protected]

KEYWORDS:   United States  North America  California  New York

INDUSTRY KEYWORDS:   Health  Hospitals  Public Policy/Government  Healthcare Reform  Pharmaceutical  FDA  General Health

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