PA Supreme Court Signals Doubt Over Red Book Drug-Pricing Standard in Appeal of Federated Insurance Co. v. Summit Pharmacy

The Pennsylvania Supreme Court appeared skeptical this week about continued reliance on the “Red Book” to determine Average Wholesale Price (AWP) for prescription drug reimbursement in workers’ compensation claims. During Nov. 19 oral arguments in Federated Insurance Co. v. Summit Pharmacy, several justices questioned whether Red Book values represent any true “average wholesale price” or simply reflect a private publisher’s pricing methodology.

The case stems from the Commonwealth Court’s 2024 decision finding that Red Book figures do not accurately reflect AWP under the Act and directing the Bureau of Workers’ Compensation to identify a new nationally recognized pricing schedule. The Supreme Court is now weighing whether that ruling should stand.

A decision in the coming months could reshape pharmacy reimbursement standards statewide. PCRB will continue to monitor the case and update member carriers as developments occur.

Read complete details in Information Bulletin #032 here.