On September 26, 2009, First DataBank and MediSpan, the firms that publishe Average Wholesale Pricing tables is changing its methodology. This change will reduce the AWP amount by almost four percent.

So what you say?

Here's what.

Pharmacies will now be reimbursed at a lower amount for each script filled. With margins on most drugs thin already, this change will push many near to breakeven. Recall that AWP affects retail pricing, not the price paid by pharmacies to manufacturers and their intermediaries.

Understandably, the pharmacies, both independents and chains, are asking the big PBMs to change their contracts to account for the change by reimbursing the pharmacies a few points higher then their current rate.

Word is the big PBMs - Medco, Express - have politely declined. CORRECTION - this statement is incorrect. The big PBMs are in fact negotiating with the retail pharmacies to reach an agreement.

No word on how Caremark is addressing this; as they are owned by the second largest pharmacy chain (CVS) they may well be thinking a little differently about the issue.

In the much smaller work comp world (about $4 billion in annual Rx spend), things aren't quite as clear. Many payers apparently still think the change isn't going to happen for another two years (which is when the legal settlement required it), but the publishers were required to make the change within 180 days of the settlement - which means the changes are effective in precisely one month. Regardless, expect there to be quite a bit of discussion amongst PBMs, their customers, and pharmacies over the next thirty days as all try to figure out how to deal with the change while maintaining decent relationships with each other.

I would note that regulators in several of the larger states don't appear to be interested in making any changes to their fee schedules or reimbursement rules to address the change.

More to follow...