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Executive Summary

The Arkansas whslr., Archer Drug, anticipates a loss of 25% of its business in Wyeth, MS&D, Squibb and Upjohn products as a result of the change to direct-price Rx Medicaid reimbursement. Archer Chairman Stephen Brown told the D.C. federal court in an affidavit that the Medicaid changes "will reduce the number of sales from those four mfrs . . . up to 25%." Indicating that Archer does about $400,000 per month in business with Wyeth, MS&D, Squibb and Upjohn, Brown estimated that the reduction would be about $100,000 per month. "These are lost sales that 1 will never recover, even if the changes are later invalidated," he told the court. Brown distinguished between the effect of the direct-price changes for the Wyeth, MS&D, Squibb and Upjohn business and the business with four other firms covered by the direct-price decree. The changes "will mean that the independent retail drug store will receive less from the government that what it pays to buy the drugs from us," Brown said. "This is certain to happen with the drugs from the four mfrs. that sell to retailers at the same cost they sell to us (Wyeth, Sharp and Dohme, Squibb and Upjohn)." He implied that there may still be a margin on the products from the other four companies for which HCFA wants to use the direct price: Abbott-Ross, Lederle, Parke-Davis, and Pfizer-Roerig.

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